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Victoria Oil & Gas jumps as explorer updates on production and funding options

VOG supplies Douala with gas from the Logbaba operation on the outskirts of Cameroon's second city and industrial heartland
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The company said it was encouraged by the strong cash flows projected from its operations

Victoria Oil & Gas plc (LON:VOG) shares jumped on Tuesday as the explorer provided a production update and clarified its funding position.

The former first: grid power customer ENEO resumed consumption, taking average gas output to 10mln standard cubic feet a day including gas condensate sales. At 12mln cubic feet, which was achieved last week (19-25 Jan), monthly revenues would be US$2mln, the Cameroon-focused producer said.

READ: Victoria Oil & Gas updates on production and funding options

In a short statement, it also told investors that in common with companies of its scale and stage of development it “continually assesses its cash requirements and funding, both debt and equity and currently is assessing various potential funding options”. 

“In adherence with market regulations any announcement in relation to any fundraising decisions would be made in consideration of due process via the formal channels and VOG has nothing further to announce at this time,” it added.

“However, the company is encouraged by the strong cash flows projected from its Cameroon operations, which reflect the January figures above.”

Via its local subsidiary Gaz du Cameroun, VOG supplies Douala with gas from the Logbaba operation on the outskirts of the country’s second city and industrial heartland.

In late morning trading, VOG shares 8.5% higher at 14.92p.   

ShoreCap remains impressed

In a note to clients, analysts at ‘house’ broker Shore Capital commented: “Following recent updates, we remain impressed by the production growth that is being achieved by VOG in very short order following the reinstatement of ENEO supply.”

They added; “We are confident that a significant reserves upgrade last year provides a robust platform for future growth across the grid power and non-grid segments, and have been particularly impressed by VOG’s successful expansion in the industrial power sector.”

The analysts said their risked net asset value estimate stands at 70p per share, reflecting “the value of VOG’s strategically important reserves base and the significant market opportunity that we see in the Douala region.”

 -- Adds share price, analyst comment --

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