4 Jul 2017 07:00
4 July 2017
Victoria Oil & Gas Plc
("VOG" or "the Company")
Update on Logbaba Participation Agreement and Bomono Project
SNH Participation in Logbaba
Victoria Oil & Gas is pleased to announce that Societe Nationale des Hydrocarbures ("SNH"), RSM Production Company ("RSM") and Gaz du Cameroun S.A. ("GDC") have agreed and signed a Participation Agreement that will govern the relationship of the parties going forward on the Logbaba Project (the "Project").
Project participation, prior to the Participation Agreement, was split GDC 60% and RSM 40%. The Participation Agreement formalises the participation of SNH, acting on behalf of the Republic of Cameroon, alongside GDC and RSM. The Participation Agreement follows SNH exercising its right to participate in 5% of the Project and, accordingly, Project participation as a result of the execution of the Participation Agreement will be split GDC 57%, RSM 38% and SNH 5%.
SNH is entitled to a 5% share of revenues from the sale of all hydrocarbons from the Project and is also liable for 5% of exploitation costs of the Project. The parties have agreed, in accordance with the Participation Agreement, for SNH to conduct an audit of the exploitation costs for the Project to determine the Participation settlement.
Bomono
Victoria Oil & Gas Plc today announces that it has exercised its option to extend the termination date of the farm-out agreement ("Farm-out") with Bowleven Plc ("Bowleven") relating to the Bomono production sharing contract. The termination date has been extended to 28 September 2017. Bowleven and VOG wish to pursue the Farm-out and are working with the Government of Cameroon to progress the Bomono project.
Full terms of the Farm-out can be found on the RNS announcement of 6th March 2017 made by Bowleven and VOG.
Ahmet Dik, CEO, said; "I am delighted that we can now formally share our energy success story on a commercial basis with the Cameroon Government. The Cameroon Government has supported and set the conditions by which GDC has been able to operate and invest in excess of US$250m, and encouraged new investors into Douala to establish their businesses. Our team looks forward to building on the excellent working relationship we have with the SNH team and I thank and extend my gratitude to Mr Adolphe Moudiki, Executive General Manager of SNH for the contribution SNH has made to the oil and gas sector in Cameroon.
This announcement contains inside information.
For further information, please visit www.victoriaoilandgas.com or contact:
Victoria Oil & Gas Plc
Kevin Foo / Ahmet Dik / Laurence Read +44 (0) 20 7921 8820
Strand Hanson Limited
Rory Murphy / Stuart Faulkner / James Dance +44 (0) 20 7409 3494
Shore Capital Stockbrokers Limited (Joint Broker)
Mark Percy / Toby Gibbs (corporate finance) +44 (0) 20 7408 4090
Jerry Keen (corporate broking)
FirstEnergy Capital LLP (Joint Broker)
Jonathan Wright / David van Erp +44 (0) 20 7448 0200
Notes to Editors
About Victoria Oil & Gas Plc
Victoria Oil & Gas (VOG.L) is a gas utility company with operations in the industrial port city of Douala in Cameroon, which is the business hub to Central Africa.
The Company's subsidiary, Gaz du Cameroun S.A. ("GDC"), supplies cost effective, clean and reliable gas to industries in the Douala region from its onshore Logbaba Gas Project. Industrial customers are supplied with gas through a 50km pipeline network built by GDC in Douala. Gaz du Cameroon S.A is the holder of 75% interest in the Matanda PSC.
GDC's gas supply to the thermal, grid power and retail power markets in Douala, is helping to ensure that the Cameroon economy is underpinned with stable energy. By developing a fully integrated gas supply network, connected to wells located within the city itself, GDC has established an energy supply within Douala that is cost effective, reliable, safe and cleaner than liquid fuel alternatives.
The Group generates cash flow from the Logbaba Project which is 57% owned and managed by GDC, with RSM Production Corporation, an affiliate of Grynberg Petroleum Company of Denver, Colorado holding a 38% participating interest and Societe Nationale des Hydrocarbures ("SNH") holding a 5% participating interest.
VOG also holds 100% of the West Medvezhye oil and gas exploration project near Nadym, Russia. The field has C1 plus C2 reserves of 14.4mmboe (under the Russian resource classification system, analogous to proven and probable reserves under Western conventions) in addition to best estimate prospective resources of 1.4bboe. Given the challenging economic environment in Russia, The Group has fully impaired the West Medvezhye assets and is seeking a farm in partner or sale of this asset.