Victoria Oil & Gas subsidiary working through 'legacy' issues

Victoria Oil & Gas updated the market on its wholly-owned subsidiary Gaz du Cameroun (GDC) - the onshore gas producer and distributor with operations located in the port city of Douala, Cameroon - on Wednesday.

The AIM-traded firm said GDC has entered into a non-binding letter of intent with New Age Cameroon Offshore Petroleum for the supply of a minimum of 25 million standard cubic feet of gas per day from the Etinde natural gas and condensate field.

To enable access to Etinde natural gas, additional downstream pipeline infrastructure was proposed to be developed by GDC, to connect that gas supply, which would be fully debt funded.

Victoria said a non-binding term sheet for long term gas supply had been drawn up, to satisfy the Aksa Energy Uretim off-take agreement and other future potential grid power contracts.

Altaaqa had suspended operations at ENEO's Logbaba site due to non-payment, Victoria said, with GDC continuing to invoice ENEO based on take-or-pay provisions.

It said remediation work to complete La-108 would restart early this year.

“We have spent the past eight months addressing legacy issues, cutting costs and exploring long-term strategies for the company to move away from its historical dilutive, capital intensive programmes to a strategy that we believe should deliver sustained profitability and generate shareholder value in the long term,” said chairman Roger Kennedy.

“Demand for gas powered energy remains strong in Douala, with the planned development by Aksa of a new 150 MW gas-fired power plant being highly positive for the people and business community of Douala and for our company.”

Kennedy said the opportunity to secure the long-term supply of gas from the Etinde license would be a “major step” for the firm.

“Based on our review and work to date, we continue to refine our long-term business plan and vision.

“We look forward to making further announcements reflecting these changes throughout 2020.”

At 1518 GMT, shares in Victoria Oil & Gas were down 21.3% at 5.8p.