Victoria Oil & Gas Plc Results for the year ended 31 December 2016
The audited financial amounts for the year ended 31 December 2016 (the “current period”, “period” or “reporting period”) are compared to the audited seven-month period ended 31 May 2015 (“prior period”) unless otherwise stated.
- 24% increase in gas sales: 3,566mmscf gross gas sold (12 months/2015: 2, 868mmscf)
- 23mmscf/d average gas production (12 months/2015: 8.13mmscf/d)
- 15km pipeline laid as part of Bonaberi extension – 50km total network
- Matanda licence 75% interest in 1,235km2Matanda Block assigned to the Company, adding 2.8tcf net prospective resources in Northern Matanda Field
- Logbaba drilling programme commenced targeting additional gas reserves
- $32.8 million revenue (prior period: $21.4 million)
- Production milestone (“Payout”) reached whereby GDC farm-in partner received 40% of revenues as of 1st June 2016
- $30.0 million group loss before tax ($1.6m profit prior period), including a $22.7 million write down of Logbaba well La-106 at 31 December 2016
- $13.1 million Underlying EBITDA (prior period: $8.5 million)
- $1.8 million net cash position at year end (prior period: $6.0 million)
- $27 million capital investment on drilling programme and pipeline expansion (prior period: $1.2 million)
- BGFI Bank debt facility of $26.0 million equivalent signed. Headroom of $14.4 million at 31 December 2016
- Termination of 1.2% royalty and reserve bonus following mediated settlement
- Executive Director changes: Robert Palmer and Grant Manheim retired from Board, Andrew Diamond appointed as Finance Director and Roger Kennedy appointed as Independent Non-Executive Director
- Proposed capital reduction
- 80% participating interest in Bomono Block secured, subject to regulatory approval
Kevin Foo, Chairman, of Victoria Oil & Gas said:
“I believe that the assignment of majority interests in the Matanda and Bomono licenses, coupled with our expanding Logbaba operations and gas market will prove to be the transformational events for 2016 and early 2017. As sole gas supplier to the Douala region, which we estimate demand of more than 150mmscf/d of gas, I envisage that the new areas will help us become the dominant player in the Douala Basin.”
Ahmet Dik, CEO, of Victoria Oil & Gas said:
“Following a particularly successful year at the operating level, with Underlying EBITDA at $13.1 million, the Logbaba drilling programme is nearing conclusion which, following an upgrade to the gas processing plant, will allow us to advance on the growing Douala market.
We achieved a 24% increase in gross gas sales in 2016, which I think is an outstanding result. Even at record production levels, we meet less than 10% of local demand as the city’s industrial economy grows.
We have now recouped our first stage development capital expenditure, with revenues from Logbaba now reflecting our 60% participating interest. The operating loss of $30.0 million includes the non-cash impairment of Logbaba well La-106 and other provisions which will enable future accounts to more truly reflect the outstanding performance of your Company.
Looking forward, reprocessing and interpretation of existing seismic and well data from across the combined area of 3,500km2 throughout Logbaba, Matanda and Bomono blocks focuses on increasing gas reserves and production to supply an energy hungry and growing industrial market further gas to power projects.”