AIM listed oil and gas exploration outfit Victoria Oil&Gas on Friday morning raised its production guidance for thermal energy provision by the end of the year and flagged the potential to double its contracted numbers over the next twelve months.
The firm, which has assets in Cameroon and in the former Soviet Union, can count the local units of Nestle, SAB Miller and Diageo amongst its clients in the west Central African country.
In its latest operational update the firm announced that a sixth customer has begun to take gas from its flagship Logbaba field, so that average daily production now stands at 1.4m standard cubic feet of gas ("mmscf/d") with peak daily production of 2.1mmscf/d.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Get 6 issues free
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
More importantly even, five further thermal Gas Sales Agreements ("GSA") were signed, bringing the total to 25. Thus, the firm now had nineteen customers awaiting the conversion of their facilities to take gas. All of them were expected to begin gas consumption before year end.
Thus, year-end production for thermal customers was now expected to rise to 5.2mmscf/d peak and 3.5mmscf/d on average.
One further power Letter of Intent ("LOI") was also finalized, bringing the total to seven.
Despite all of the above, and given the additional capital required to support its power strategy, the company was expecting gas consumption from its first power customer following completion of a financing package with a leading European bank. That was under negotiation at the time of the update, but at an advanced stage.
Kevin Foo, Chairman of Victoria Oil&Gas commented, "(...) we are receiving increasing levels of enquiries from other potential clients in Douala. We have now got momentum and have the potential to double the number of contracted customers within 6 to 12 months."
"In the New Year, we will see the Company continue to increase its thermal customer base and begin our first power sales. The power market potential in the region is very exciting and will be the driver of production growth," he added.
As of 10:58 the company's shares were rising by 1.1% to the 2.25p mark.
AB
How does the Lifetime ISA work? Key LISA rules
AJ Bell: a fine British fintech going cheap
