VOG.L Regulatory News (VOG)

21 December 2017

Victoria Oil & Gas Plc

("VOG" or "the Company")

Year End Customer Supply Update 2017

Victoria Oil & Gas Plc, a Cameroon based gas producer and distributor, is pleased to provide an update on the Group's gas supply operations near to the close of 2017 and to 

announce Q3 production results, which are in-line with expectations.

The last few months have also been extremely active for Gaz Du Cameroun S.A ("GDC") with five customers commencing consumption of gas:

· Maya & Co Oil (Palm Oil refinery, new customer)

· SAE (Food processing, new customer)

· PROMETAL 3 (Smelter, new plant for existing customer)

· UCB (Brewery, returning customer)

· Laminoir (Foundry, returning customer)

Maya Oil and SAE are new customer connections for GDC with both operations taking gas for thermal usage. These customers are both situated on the Magzi industrial estates located on the Western Bonaberi shore, where GDC laid an extensive pipeline network during 2016.

The PROMETAL 3 connection is the latest installation at the industrial smelting complex where GDC already supplies gas to the existing operations (PROMETAL 1 & 2).  UCB and Laminoir are returning customers who have opted to restart consumption of GDC gas following the rise in the heavy fuel oil price.

The impact of the new customer connections and an early uplift in ENEO consumption this year is already being reflected in current production figures with an average of 10.04 mmscf/d gas sales achieved to date in December (1-19th December), peaking at 14.94mmscf/d.

ENEO continued to consume high levels of gas at the Logbaba and Bassa power stations during the Q4 period to date and GDC will continue to provide gas to ENEO under existing contract extensions whilst negotiations on a longer-term contract continue.

The Company has provided separate updates on completion of wells La-107 and La-108 and further flow tests on the Lower and Upper Sands of La-108 are planned for Q1 2018. Once these tests are completed reserve calculations for both wells will be carried out by internal and external reservoir engineers. However, internal preliminary reserve estimates have given the Company sufficient confidence to enter into long term contract negotiations with current and prospective grid power suppliers.

The full quarterly gross and net gas and condensate consumptions, for Logbaba and GDC, are as follows; amounts in bold are gas and condensate sales attributable to GDC*:

* After reaching a cost recovery milestone on Logbaba during Q2 2016, GDC received 60% of revenue from Logbaba in accordance with its participating interest. Prior to this date GDC received 100% of revenues as a recovery of exploration costs. In June 2017, Société Nationale des Hydrocarbures ("SNH") executed its right to a 5% participation in Logbaba resulting in GDC's participating interest decreasing to 57% and the figures from the effective date onwards have been adjusted accordingly.

Q3 2017 Gross Gas sales from Logbaba of 612.50 mmscf are in line with the Company's expectations for the period given the early wet season from June. GDC's attributable gas sales volumes, are lower than Q3 2016 primarily due to the change in attributable revenues following the SNH participation.

Ahmet Dik, CEO, said; "I am pleased to see the increased December gas sales levels coming through from our new thermal customers. Supply to ENEO continues at strong levels and we shall update the market early 2018 on further gas to power supply. We shall also provide updates on the Matanda and Bomono projects."

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 Tel: +44 (0) 20 7921 8820

Strand Hanson Limited (Nominated and Financial Adviser)

Rory Murphy / Angela Hallett / Stuart Faulkner Tel: +44 (0) 20 7409 3494

Shore Capital Stockbrokers Limited (Joint Broker)

Mark Percy / Toby Gibbs (corporate finance) Tel: +44 (0) 207 408 4090

Jerry Keen (corporate broking)

FirstEnergy Capital LLP (Joint Broker)

Jonathan Wright / David van Erp Tel: +44 (0) 207 448 0200

Camarco (Financial PR)

Billy Clegg Tel: +44 (0) 203 757 4983

Nick Hennis Tel: +44 (0) 203 781 8330

NOTES TO EDITORS:

Victoria Oil & Gas Plc ("VOG" or "the Company") is a fully-integrated onshore gas producer and distributor with operations located in the port city of Douala, Cameroon. Through the Company's wholly-owned subsidiary, Gaz du Cameroun S.A. ("GDC"), VOG delivers gas via a 50km gas distribution pipeline network to a range of major industrial customers. 

Since spudding its first wells in 2010, the Company has grown to become the dominant player in the Cameroon onshore gas market, primarily through the 57% owned Logbaba gas project. GDC is partnered on this project with RSM Production Company ("RSM"), and Société Nationale des Hydrocarbures ("SNH"), who have holdings of 38% and 5% respectively.

Subject to government approval VOG will extend it acreage over 3,500km2 of the highly prospective Douala Basin with the addition of the Matanda and Bomono license areas. A drilling programme on the Logbaba asset is underway to add further gas reserves to meet the growing demand for gas in Cameroon.

Victoria Oil & Gas is listed on the AIM market of the London Stock Exchange under the ticker VOG.