Victoria Oil arranges US$26mln loan to fund Logbaba expansion

Gaz Du Cameroun, Victoria’s local subsidiary, has arranged the loan facility with BGFIBank Cameroon.

Victoria Oil & Gas Plc (LON:VOG) has arranged a US$26mln debt facility to fund a 30% expansion of production at the Logbaba gas field in Cameroon.

Gaz Du Cameroun, Victoria’s local subsidiary, has arranged the loan with BGFIBank Cameroon.

The plan now is to fund the Logbaba’s development through operating revenues and capital contributions from GDC and RSM Production Corporation, its 40% partner.

Victoria said it wanted to avoid issuing new equity and the new loan facility will be more than enough for GDC to fund its share of the production expansion programme, it added.

GDC already has a US$4.4mln loan with the bank and the new terms include repayment over five years, a 12 month draw down period and interest of 7.15% per year.

Ahmet Dik, GDC’s chief executive said the company had a highly effective working relationship with BGFIBank.

“The 2016-17 production expansion programme for GDC has been carefully planned and we are committed to delivering increased levels of gas to customers within budget and without the company having recourse to equity markets.”

Logbaba supplies gas to the Cameroon city of Douala. Production is currently running at 15mmscf/d but a ‘primary objective’ in 2016 is to exceed 3.7 Bcf of annual production, a 30% increase.

Two wells are scheduled to be drilled thi syear alongside an extension of the Bonaberi pipeline and upgrade to gas processing plant capacity in three stages.