Victoria Oil & Gas Plc has reached an agreement with Glencore Exploration Cameroon Limited and Afex Global Limited on the Matanda Block a large hydrocarbon licence in Cameroon. The terms of this agreement include the assignment by Glencore Cameroon of its 75% participating interest in the Matanda Production Sharing Contract ("PSC") to VOG, and VOG becoming Matanda's operator through its 100% owned subsidiary, Gaz Du Cameroun Matanda S.A. ("GDC Matanda").
As consideration for the assignment, VOG or its subsidiaries will assume responsibility for carrying out a Work Programme to be agreed by the Government of Cameroon. The assignment is conditional on this being agreed and other customary approvals from the Government of Cameroon.
Matanda covers an area of approximately 1,235 square kilometres and is highly prospective for significant natural gas and gas condensate resources.
Glencore Cameroon is currently the operator of the PSC, with a 75% participating interest and AFEX, a Bermuda based exploration and production company specialising in West Africa, holds a 25% participating interest. Under the assignment GDC Matanda will hold a 75% participating interest in the PSC and AFEX will have a 25% participating interest in the PSC. GDC Matanda and AFEX will initially focus on prospects in the onshore licence area located within a few kilometres of the adjacent Logbaba area and its existing pipeline network that is currently operated by GDC.
GDC Matanda and AFEX will submit a new work programme to the Government of Cameroon for approval and expects to commence its first phase of seismic data acquisition in Q4 2016. The assignment of the PSC complements the Group's current development activity at Logbaba, including the previously announced new drilling programme of one twin and one-step out well scheduled for 2016, by securing a significant additional resource base. The existing Logbaba gas network infrastructure will also allow for fast-track development of any new discoveries made on Matanda to deliver additional natural gas to local industrial users in Cameroon.
Kevin Foo, Chairman, said: "This is a very exciting and fulfilling acquisition for VOG and its expansion plans. The North Matanda Field has considerable potential and we believe is an extension of the Logbaba structure and at 1,235 square kilometres, the block is over 60 times larger than our existing concession. VOG has worked closely with AFEX, Glencore Cameroon and SNH, the Cameroon national oil company, to bring this opportunity to a successful conclusion. We believe the assignment and operatorship of the Matanda block is a major step towards allowing the Group to meet the growing energy needs of the Cameroonian economy.
Development of Matanda will be built on the excellent foundation established by Glencore Cameroon and AFEX. We believe that the three wells drilled in the North Matanda Field and the extensive 2D and 3D seismic data shows a strong geological continuation between the Logbaba and North Matanda Fields. Tests from the NM-1x, 2x and 3x wells proved a rich condensate yield varying from 30 bbl/mmscf to more than 70bbl/mmscf. The assignment and development of Matanda is consistent with our strategy to provide clean and reliable energy to industrial users in Cameroon."
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