CAMEROON: Victoria Oil & Gas Provides Q1 2022 Operational & Corporate Update

OPERATIONS SUMMARY 

·    Sales: Average daily gross gas sales rate for the quarter was 5.5 MMscf/d (up 4% on Q4 2021: 5.3 MMscf/d), and a gross volume of 4,691 bbls (Q4 2021: 5,584 bbls) condensate was shipped to customers. 

·    Logbaba Performance: The field has been meeting the demand using two of the three wells at any one time, with Well La-108 alternating with Well La-107. 

·    Matanda: Following the rig tendering exercise, a suitable rig has been identified in nearby Chad, and this rig would be capable of drilling deeper Cretaceous targets as well as the shallower Tertiary targets. As the rig is currently idle, the rig owner will mobilise the rig to Cameroon whilst contract negotiations continue. 

CORPORATE SUMMARY 

Post-Period: RSM Litigation & Suspension of Trading. As announced on 4 April 2022, the Arbitral Tribunal made its Partial Final Award under ICC Rules on 1 April 2022. The net award to RSM was US$12.1 million, with interest and costs to be agreed by the parties separately. 

Neither GDC, nor the VOG Group, has the ability to pay the Award and accordingly the trading of VOG shares on the London Stock Exchange was temporarily suspended as of 7.30am on 4 April 2022 pending resolution of this fundamental uncertainty to continue as a going concern. 

As stated in the 4 April 2022 RNS, the parties continue to work towards a post-award settlement, albeit such settlement cannot be assured. However, the settlements reached in September 2021 and January 2022 show that these sorts of agreements are possible. 

Hadron Loan Notes: Referring to the £1.25 million unsecured Loan Note entered into in 2021, which was due to be repaid by 21 April 2022, Hadron has agreed to not declare an event of default and stay any enforcement action on the non-repayment of this Note. Hadron has reserved its position to take any action in the event that at any time it reasonably believes that the financial position of the Company is unlikely to be stabilised. This stay also applies to the £1.15 million unsecured Loan Notes entered into with Hadron on 1 March 2022.  

Roy Kelly, Chief Executive of Victoria Oil & Gas, commented:

“GDC turned in another robust quarter of gas sales, partially buoyed by the AFCON football competition hosted by Cameroon, and that performance has continued into the start of the second quarter. 

Despite the post-period Arbitral award, and the suspension of trading in VOG shares whilst the Company is in a position of financial uncertainty, it remains very much business as usual at the operational level whilst we continue to earnestly seek a post-award settlement. “

LOGBABA UPDATE

Quarterly Production 

GDC continues to safely produce and sell natural gas to a variety of customers in the Douala area. Quarterly gross and net gas sales and condensate shipments at Logbaba are as follows (amounts shown in bold represent net gas and condensate sales attributable to GDC (57%)):