Victoria Halves Cameroon Output in Q1
Victoria Oil & Gas more than halved its gas production yr/yr in Cameroon in the first quarter, following the shutdown of a gas-fired power plant that it supplies, the London-listed company said in a stock filing on April 17.
Production at Victoria's Logbaba gas project averaged 5.1mn ft3/day in the three-month period, down from 10.1mn ft3/day in the first quarter of 2019. It generated $5.3mn in revenues from the sale of this gas and 1,656 barrels of condensate it lifted.
Victoria halted gas sales to national power utility Eneo's 30-MW Logbaba power station on September 14, after UAE-based generator supplier Altaaqa suspended operations at the site due to Eneo's failure to settle invoices. However, Victoria continues to invoice Eneo because of take-or-pay conditions in their three-year gas supply contract.
The suspension at Eneo's Logbaba site continues but talks are ongoing between Altaaqa and Eneo and Victoria is "optimistic" that a resolution can be achieved.
Eneo owes Victoria's Cameroonian subsidiary Gaz du Cameroun (GDC) $5.2mn as of March 31. It has issued promissory notes to cover invoices for May through August of last year, worth $5.1mn. These notes have been used as collateral for a bridging facility with BGFIBank Cameroon, the banker of both companies.
"While this invoice settlement structure is not ideal, Eneo is paying its invoices, albeit in arrears, and continues to acknowledge their contractual commitments under the gas supply agreement," Victoria said. " GDC expects to receive full payment of all outstanding amounts in due course, to conclude the fully termed agreement with Eneo and to secure the agreed payment guarantees."
Through GDC, Victoria has a 57% stake in the Logbaba project, located near Cameroon's largest city Douala. Its partners are RSM Production and Societe Nationale des Hydrocarbures.