Cameroon Producer Borrows to Boost Output

UK-based Victoria Oil & Gas (VOG) said April 13 it has secured a $26mn debt facility with BGFIBank Cameroon to support production expansion at its Logbaba gas field onshore Cameroon through 2016 and 2017. VOG said it preferred to borrow to invest, rather than farm down its 60% stake.

VOG said its subsidiary Gaz du Cameroun has a well-established banking relationship with BGFIBank, and that the new facility extends an existing loan of $4.4mn. The new debt facility is available for draw down over a 12-month period that can be extended without penalty for a further 12 months. Interest on the debt is 7.15%/yr and the debt is repayable over 5 years.

During 2016 VOG says it intends to increase gas production from the Logbaba Project by 30%, following the 107% increase in average daily production achieved in calendar year 2015. To achieve this, it will drill one twin-well and one step-out well at Logbaba, and extend the Bonaberi pipeline to customers with gas service agreements in place, and increase gas process capacity in three phases.

Colorado-based RSM Production Corporation, led by Jack Grynberg, owns the other 40% interest in the Logbaba project.

VOG last week outlined exploration plans for its larger, 75%-owned, “highly prospective” Matanda licence, adjacent to Logbaba.

Mark Smedley