Petroleum Africa
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Monday, July 27, 2020
Victoria Oil & Gas, a Cameroon based gas producer and distributor, has provided an operations update for the second quarter of 2020. Victoria reports that its grid power customer ENEO Cameroon S.A. (“ENEO”) was served notice of termination, having been given further opportunities to clear its debts.
In the short-term, the company says it has lined up sales to replace over 30% of the grid power customer’s Take-or-Pay volumes at a higher price margin via increased demand from existing customers, and at least 2 new customers expected to be tied in within the next 3 months. These increased sales already represent replacement of over 50% of the revenue lost through the termination of the ENEO contract.
Following an analysis of the current well stock and recognizing there are no short-term plans for further drilling at this time, management has reduced its estimated Proved Reserves (“1P”) for the Logbaba Field.
The large, in-place resource estimate remains unchanged, and the revised 1P Reserves, without additional drilling, still provide for several years of supply with or without the grid power demand.
Following an extensive prospect evaluation and derisking of the Matanda License, management has materially increased its estimate of Prospective Resources for the Onshore part of the License, which is contiguous with Logbaba.
The Matanda partners, GDC and Afex Global Ltd, continue discussions with the Government in Cameroon and remain optimistic of obtaining an extension as previously guided.
Roy Kelly, Chief Executive of the Company, commented: “We are pleased with the resilience the Cameroon business has shown through recent times and the early strides made to replace the gas sales volumes previously allotted to ENEO. The Logbaba reserves reduction reflects adjustments based on the current well stock but leaves the Company with years of supply with or without the grid power demand even without further development drilling. The work program on Matanda has yielded encouraging and significant prospectivity on the license, in what is a rich hydrocarbon province. We are also encouraged by the unsolicited interest in the SGI asset.”
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