Petroleum Africa
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Thursday, January 28, 2021
Release
Victoria Oil & Gas Plc, whose wholly owned subsidiary, Gaz du Cameroun S.A. (“GDC”), the onshore gas producer and distributor with operations located in the port city of Douala, Cameroon, is pleased to provide shareholders with an operations update for the fourth quarter of 2020.
The flowrate of the La-108 well obtained on short-term test was excellent, but such short-term deliverability is no measure of either long-term deliverability, or the ultimate reserves that may be recovered by the well, as the variations in the performance of the other wells has illustrated. We therefore require a period of sustained production from La-108 to determine how we can best use the well to serve the growing demand in the area.
Finally, we are also pleased to have received an extension to the Matanda license for which we thank the relevant Government of Cameroon departments and we have started the well planning process for a shallow well to target one of the many Tertiary prospects, most of which are within a few kilometres of existing GDC infrastructure.
GDC continues to safely produce and sell natural gas to a variety of customers in the Douala area, most of whom would have previously burned diesel or fuel oil, with liquid fuels. At the time of writing, diesel is currently selling for more than twice the average cost of gas, and the difference in emissions is well documented. Quarterly gross and net gas and condensate sales at Logbaba are as follows (amounts in bold are net gas and condensate sales attributable to GDC (57%)):
The increase in gas sales over Q3 is a combination of seasonal swing and a recovery from COVID-19 affected operations.
Post-period: at the time of writing, one of our larger customers is commissioning additional power and thermal equipment which will increase consumption by approximately 0.56 MMscf/d once at full capacity. Looking further ahead, towards the middle of the year, two other existing customers will be increasing consumption, adding another 0.95 MMscf/d of additional demand. The beauty of such organic growth is that little or no capital is required to capture it, and the direct operating cost of the Logbaba field is largely fixed so increased sales go straight to the bottom line.
The company is also in discussions with new customers in the Douala area for further thermal and power projects representing significant energy demand requirements.
La-108 Remediation
During the period fishing operations commenced on well La-108, the fish was recovered, the well was cleaned out, and six sets of perforations were shot across a total estimated gross pay interval of 86m. The well was opened up on 11 November 2020 to flare and achieved a flowrate of just under 20 MMscf/d with a FWHP of 3,580 psig on a 32/64″ choke. Post-period: the well has been tied back to the processing plant and, at the time of writing, final electrical and control work is underway to complete prior to La-108 being put into production (expected in early February).
Matanda Update
Gaz du Cameroun S.A. (“GDC”) received, as operator, approval from the Minister of Mines, Industry and Technological Development for the extension of the Matanda Block licence. The exploration phase of the licence has been extended by one year from 17 December 2020. This has been approved by the Minister and a Presidential Decree will follow in accordance with the regulations in due course.
Work on the Environmental and Social Impact Assessment (“ESIA”) was finalised during the quarter. Post-period: the report is being finalised prior to issue to the relevant authorities and well planning has begun.
Roy Kelly, CEO of the Company, commented: “We are very pleased with the resilience our Cameroon business has shown yet again under the challenges and restrictions posed by the pandemic. Looking ahead, we are delighted to have a number of growth opportunities to increase gas sales in Cameroon which remains resource rich but energy poor, especially around Douala, the country’s largest city and the economic engine of the country.”
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