Cameroon project pays out for Victoria Oil & Gas

Victoria Oil & Gas plc (LON:VOG) has been repaid 40% of its exploration expenditure on the Logbaba gas field in Cameroon from revenues generated from gas sales.

Reimbursement of its spending was part a deal agreed with partner RSM two years ago and going forward revenues will now be split on a pro-rata 60/40 basis in Victoria's favour.

In the three months to June, revenues were US$12.5mln (US$12.8mln), with gas sales up 3% to 1.15bn cubic feet. Average production in the quarter rose to 13mln scf daily from 9.9scf/d.

Logbaba supplies the industrial city of Douala in Cameroon and Victoria Oil added it had now completed 75% of the Phase II Bonaberi pipeline to the Maya Oil factory, while the 5.5km Phase III pipeline to Bekoko junction has also commenced.

These pipeline extensions will connect twelve new customers in the fourth quarter.

Ahmet Dik, chief executive, said: "The period saw GDC [Victoria’s subsidiary] complete a series of major workstreams that underpin our ability to expand our gas production and supply to the Cameroon energy market.”

“We now look forward to expanding our supply capability to the next level to meet the ongoing strong demand for gas we are experiencing in Douala."