Victoria Oil gets extension to Matanda Block licence

Cameroon-focussed Victoria Oil & Gas announced on Thursday that its wholly-owned subsidiary Gaz du Cameroun (GDC) has received, as operator, approval from the Minister of Mines, Industry and Technological Development for the extension of the Matanda Block licence.

The AIM-traded firm said the exploration phase of the licence was extended by one year from 17 December 2021, with ministerial approval and the associated ‘arrêté’, or decree, received.

GDC was assigned 75% ownership and became the operator of the Matanda PSC in December 2018, with Afex Global holding the remaining 25%.

Société Nationale Des Hydrocarbures (SNH) held a 25% back-in right after the granting of an exploitation licence.

The company said the 1,235 square kilometre Matanda block lay adjacent to GDC's Logbaba concession, with several monetisation options for gas discoveries.

Its estimate of prospective resources remained unchanged from its previous reports, being 1,196 billion cubic feet of gas in the Matanda Licence onshore - the area of initial focus.

The results of a “rigorous” prospect evaluation, including significant weighting on environmental, social and governance (ESG) elements of the site and operation, led to the selection of the Marula prospect for the first well, being the largest of the onshore, tertiary-aged prospects with an internally-estimated unrisked Pmean prospective resource of 69 billion cubic feet, and better than a 40% geological chance of success.

Using the environmental and social impact assessment, coupled with the addition of ESG issues to the prospect evaluation table, resulted in a well location that was on government-owned, late-life plantation land, and more than three kilometres from any dwellings.

The site was also away from areas of vulnerable mangrove forestation, which conservationists were working to protect in the coastal areas on the Matanda Block.

As of Friday, Victoria said many of the long-lead items had been ordered, and a short list of eight suitable rigs drawn up with an invitation to tender issued, and bids due early next year.

The company said the total drilled depth of the first well would be less than 1,300 metres, adding that it would be vertical, so a trailer-mounted rig of “modest power” would suffice.

As there were no other onshore drilling operations in Cameroon, the rig would need to be sourced from overseas.

Victoria said the current schedule showed a second quarter of 2022 spud date, subject to finalisation of the costings and the necessary funding being available.

“We are extremely pleased to have received this extension for another year and, once again, we thank the minister and SNH for expediting this extension,” said chief executive officer Roy Kelly.

“The first well will be in the highly prospective onshore area where nearby wells in a similar play in the contiguous Bomono licence underwent extended well tests and have significantly de-risked these shallower plays.”

Kelly said he was “particularly pleased” with the role played by the firm’s ESG team in influencing the selection of well location, mindful of human and natural habitats around the wellsite.

“We face our usual challenge of mobilising land drilling equipment into the country, but most of the rigs on our shortlist are in the region.”

At 1055 GMT, shares in Victoria Oil & Gas were up 9.68% at 3.46p.