Victoria O&G Warns of 2018 Output Cut

UK-listed Victoria Oil & Gas (VOG) warned of a material loss of gas sales in its outlook for this year, unless Eneo, a cash-strapped utility in Cameroon, turns its power plants back on. VOG sees this as likely as the hydropower projects are low on water and there have been power cuts. Eneo has also repaid some of its debt since January 5, bringing the total from $8.7mn to $5mn.

VOG's Q4 2017 results statement published February 16 said its year-end supply projections will be 13mn ft³/d if the plants are back on line by Q2, by which time it expects all debt to be repaid, but only 9mn ft³/d if they remain offline. 

In the meantime, subsidiary Gaz du Cameroun is looking for alternative gas customers and is "progressing bespoke gas to power initiative with industrial customers with third-party gas to power generation," it said. And talks continue with other grid power suppliers Dibamba and Grenor who confirm commitment to building power supply in Douala.

It sold a record amount of gas in Q4 as more wells came on line, the 726mn ft³ total being an 18.56% increase on Q3 2017 and an 11.04% increase on Q4 2016. Average daily gas production was 7.94mn ft³/d, up from 7.64mn ft³/d in Q4 2016.

As of the end of the year it had cash and cash equivalents of $10.4mn, net receivables $6.1mn and net debt $14.0mn. It is also involved in an insurance claim arising from a problem during a drilling campaign. Budgeted to cost $40mn, the final bill was $87mn. It said the overrun was "the result of a combination of many factors and a detailed analysis will be completed. However, the well control event during the drilling of La-108 was the main cause of the delay and cost overruns....  As is normal in these situations, the outcome of our claim is not certain."