Douala, Cameroon, Africa. November 2010 (news.cameroon-today.com) - Victoria Oil & Gas secured an investment of £10.8 mln which would be deployed towards the development of the Logbaba Liquefied Natural Gas plant.
Victoria Oil & Gas (LON:VOG) has announced its plans to go ahead with the expansion and development stage of the Logbaba gas project in Cameroon. The move has been confirmed after the company could boost the funding to £10.8 million.
In the current effort to raise its finances the company has concluded a placing in tandem with also bringing down on its Standby Equity Distribution Agreement (SEDA).
“We are pleased with the level of support shown by investors in this equity financing,” chairman Kevin Foo said.
“The company is now well capitalized as we move to commence production from the Logbaba project early in the new year.”
Oil and gas Plant
The major chunk of the 10.8 million pounds came from the placing, complete with the discharge of 183 million new shares at 4.9 pence which got them around £9 million. It has withdrawn £1.8 million deploying the SEDA facility, following which 40.3 million shares at 4.8 pence each were also issued.
The SEDA was scheduled on an arrangement with Yorkville’s YA Global Master fund in June 2009.
With the current level of funding in place, VOG now has secured the financial power to go ahead with the expansion plans that it has for the Logbaba LNG plant.
VOG has also told the media that is wants to deploy a part of the money to also extend the present gas pipeline, to move over to the South Eastern and South Western areas of Douala as well.
Logbaba is situated in the eastern parts of Douala – Cameroon’s business capital and one of its biggest and busiest ports .The gas from the Logbaba plant would be used by VOG to cater to the industries requirements in the city.
Foo confirmed to the press that Victoria Oil & Gas is still in the process of taking in customers for their gas service across various parts of the city, and said that the licenses for exploration which has been in the pipe line for quite some time now is fast approaching the finishing line.
He added: “We remain optimistic that the appropriate licenses will be awarded in the near future to enable the company to satisfy the ever-increasing demand for liquids and natural gas in Cameroon.”
The funding will also be used towards meeting the existing working capital needs till the time Logbaba’s selles its first gas, which is expected to happen in the first quarter of 2011.
Fox-Davies Capital had brought its focus on VOG in the current issue of ‘Daily Monitor’, indicating that the placing will offer the much sought after leeway to the company as lawmakers in Cameroon have been making them wait for mush longer than what was stipulated and agreed upon previously for the necessary licenses..
“We are not concerned by the delay and reiterate our ‘Buy’ recommendation and (12 pence) price target,” the broker added.
About Victoria Oil & Gas.
Victoria is a single ownership oil and gas exploration and manufacturing company with markets in Africa and the FSU.
The Company’s major assets include a 60% stake in the Logbaba gas and condensate project in Cameroon and full ownership of the West Medvezhye gas field in Siberia, Russia.
Logbaba is located in the eastern suburbs of Douala, which the major industrial hub and commercial capital of Cameroon and is also home to the country’s biggest port and busiest airports.
West Medvezhye is located near the very important Yamal-Nenetsk hydrocarbon region in Siberia.
