Victoria Oil & Gas Share Discussion Threads

[fatnacker] 02/2/2017 08:52

The loss of the 40% is insignificant because even though you're ignoring the fact that it was always the case it never dropped to the bottom line anyway, all revenue has been reinvested and will continue to be, what's changed?

[highasakite] 02/2/2017 08:44

sleveen


The 60/40 split has been known for years.

Why are you so concerned about VOG ?

Do you own any shares ?

[sleveen] 02/2/2017 08:41

Perhaps (excluding blinded by unlimited upside potential).

However you still have not answered the question as to why the loss of 40% of revenue is marginal to VOG.

It would be a disaster for all other companies resulting in profit warnings.

VOG have rightly flagged this up, I suspect new VOG investors may have overlooked this.

Or perhaps the fall from 80p to 35p reflects this.

Let's have those Q4 2016 figures.

Perhaps a Friday RNS?

[fatnacker] 02/2/2017 08:31

Indeed sleveen, clawback where the relevant party takes 100% or 60% and 40% of revenue until ballance is achieved, it was always going to be so, you think repayment of the initial drilling costs is a bad thing? Honestly? I think you've blinded yourself to the unlimited upside potential, I accept there's negatives but on ballance they are far out weighed, the fact that there's been enough revenue to actually repay the initial drilling costs is an achievement in itself.

[sleveen] 02/2/2017 07:47

fatnacker
1 Feb '17 - 12:49 - 34242 of 34252 0 0
Sleveen, they never had it in the first place.


...From Q3 2016 update:
* After reaching a cost recovery milestone on the Logbaba Gas and Condensate Project during Q2 2016, whereby revenues are shared with VOG receiving 60% in accordance with its participating interest, the sales metrics are presented on a gross basis, with attributable gas sales shown in brackets. Prior to Q2 2016 gross and attributable sales were the same. Going forward the Group will report on an attributable basis.


Looks like VOG were happy to take 100% revenue; while they could that is.

[fatnacker] 02/2/2017 07:24

I'm sure someone said financial report was due before end of Jan? Did I Imagine it?

[broncowarrior] 02/2/2017 07:12

News tomorrow then?!

[dandadandan] 02/2/2017 06:56

Undervalued - yes but still waiting for that news - 'both drilled and cased'.

It must be due any day.

Watching and expecting good things here.

GLA

[highasakite] 01/2/2017 20:55

get back to Zion

[temmujin] 01/2/2017 20:45

newbie get back to your classroom

[temmujin] 01/2/2017 20:22

from Malcy's blog..

Victoria Oil & Gas is arguably one of the most undervalued assets I have looked at, the management are determined to create a utility scenario from the gas to the customer. Gas found by them at Logbaba and through their own pipes to clients in Douala is a very exciting prospect and the demand is almost limitless.

[olieslim] 01/2/2017 20:07

Post on i3 just now:

Author KNOW YOUR COMPANY View Profile Add to favourites Ignore
Date posted today 19:15
Subject Re: News overdue View parent message
Votes for this Posting
Message
Hi Mel/Tem,

Mel - And yet I am hoping VOG do manage to unlock it. Hopefully non-partnered. They are doing well so far. Successful drilling of these 2 wells is essential in this longer-term model. 2 unsuccessful wells puts us back years whereas if both wells meet/exceed expectations it will allow a lot of positive options for the expansion of VOG in different directions, old and new. Very much hoping to hear that both wells have been drilled and successfully cased to at least 1600m in the forth-coming update. A gradual, staged expansion of the proposed business model, each step building on previous, hopefully will put VOG on a very sound footing 5-10 years down the line. Let's look at where the pipeline is going, and why, since this rarely gets discussed.

First a recap. The Douala distribution network consists of:

Main Trunk Line

Phase 1 – Western Line
Phase 2 – Western Line

Logbaba Branch Line
Northern Line
Eastern Line
Southern Line
Ports Branch Line
Magzi Branch Line

Phase 1 Bonaberi Line Extension
Phase 2 Bonaberi Line Extension
Phase 3 Bonaberi Line extension

Phase 4 Bonaberi (proposed)
Phase 5 Port Branch Line (proposed)

As of 23/12/16 Phases 2 and 3 of the Bonaberi Line extension had been completed. It won't be long till we hit the company's self-proclaimed important milestone of 50km of pipeline.

The type and number of each customer can be found on the diagram given to us in the Fact Sheet, and was up to date as of 30/04/16.

Let's look at where the line is going as per the 'Logbaba Field Development Project', starting with the Eastern Line:

EASTERN LINE

The Eastern Line has the Logbaba Power Station 30MW (peak). There is also a proposed circa 10km extension to the Eastern Line that targets 4 customers at its end. My calculations are: Azur S.A (a biotech company) and DPDC (a power station) on the eastern fork and 2 more unidentified customers between Station Tradex Yassa and Garage Chinois Yatchika on the western fork.

In February 2016 this was designated part of the future possible Phase 3 plans. But why build 10km of pipeline for 4 customers located right at the end when the other lines have so many more closer, and why call this projected Phase 3? In 2010/11 I posted a lengthy post dedicated to Dibamba, discussed it's original admission document and how even back then there was inclusion and provision for how one day it could be converted to gas and where exactly it fed into the main electricity Network. Well if you follow the projected Phase 3 line another 3km south straight along the road from where it it intended to end, you come to Yassa and Dibamba! This was not on the diagram at all, but I suspect is the ultimate target of the Eastern Line. With the completion of Phases 2 and 3 of the Bonaberi Line Extension, it would be a big positive if we hear that 13km of the Eastern Line is being prioritised. As we'd know why! Dibamba was discussed to death, but might be worth a revisit at some point.


SOUTHERN LINE & PORTS BRANCH LINE (PHASE 5)

Not much has gone here yet. As of 30/04/16 there was one thermal customer on the Sourthern Line (unnamed building between Lycée technique Koumassi and Usine des Brasseries du Cameroun on Rue de Bell. The building with the large square roof and storage yard. We were told that the Southern Line has a future possible extension of about 1km further south, ending at the southern roundabout on the N3, circa 100m southwest of Glencore Exploration Cameroon Limited. This is 1km west of Douala International Airport. At a guess, ultimately the Southern Line could be targeting the airport. Why would you build a pipeline upto 1km distance of the airport and then stop? The airport has been mentioned before.

The Ports Branch Line has a relatively dense collection of a targetted 14 potential customers. As follows: 1 across the N3 from Rue Drouot, possibly Gare Routière, then we have 3 customers close together around the Douala International Terminal including the large unnamed building on the cross roads just south of the Terminal, 2 customers near Garage Movis and Malambi Karanatka, then 5 (unidentified) customers almost side by side on the Port Road leading from DG Congelcam (a shopping centre) to Sacam. The line terminates by spliting into a projected trident shape with 3 customers, the middle one of which seems to be Force Tyre Sarl (auto parts store).

Note the Projected part of the Ports Branch Line is designated Phase 5 and is about 5km long, so seems a good near term priority imo, but not one the company has told us if they are going to prioritise. Hopefully we'll hear more on this branch soon.

BONABERI (PHASE 4)

With phases 2 and 3 complete, I'll be interested to hear the designated Phase 4 Bonaberi pipeline extension is the next target. The fact sheet tells us the following 'Bonaberi Line Extension 8km two-phased extension into the less densely populated side of the Wouri River and the fastest growing industrial area of the city'. There are 11 customers on the fact sheet, 3 of which are identified as connected thermal customers. The recent update told us of 7 new connections and the respective company names (Totally Wired/Banjomick kindly posted their names over on LSE if anyone wants further info on them) Note BOCOM is about 5km from the river, further along the Bonaberi extension into the Phase 4 possible projected extension. Interestingly, this was not part of Phase 3 Bonaberi.

The Projected phase 4 of the Bonaberi line is approximately 20km long in total. The last projected end point we were informed of was the white roofed building at 4.151560, 9.561953 (copy and paste those coordinates into google maps for the location). The N3 is a long road heading towards Moulanga. It is a major expansion for our company as it has another projected 27 customers along its length with 3 spur lines. The first spur line follows the right turning just north of Grand Hangar Market and goes up to OK Food Cameroon, the biscuit and sweets manufacturer we were told about as one of our seven connections. This located at 4.088632, 9.665293 and is clearly well into the projected Phase 4 part of the Bonaberi extension as well.

Other customers from where they were located on the map look to include: ZoomAfrique (internet), Belgocam (agriculture), Station Total Ndobo (?CNG), 5 customers around 4.099011, 9.634310 including a spur line, Semelec Sarl (electronics), Nestle at 4.105305, 9.609334, and a lot of others.

Note on the Bonaberi Side of the river there are a projected total of 38 customers, a few of which are connected/being connected. It's crossed my mind previously that this line may eventually be headed towards Tiko 20km further on, then a final 20km to Limbe! It's not like digging up industrial Douala and would be a rural pathway for our pipeline to follow should VOG see any benefit in doing so. It follows the northern border of Matanda along its entire length on both the Douala side and across the Wouri so it'll be interesting to hear where we need in-fill seismic (It's surprising how much 2D Glencore did and gave us free) and where we eventually drill as this could potentially tie in nicely. Bearing in mind the chain of 8 oil seeps going up the western border of Matanda. We know generally there is a SW to NE trend to the geology of onshore Cameroon with the hydrocarbons being trapped up-dip.

So the 30/04/16 diagram showed us there were 13 'Next Phase' customers who were as of that date not connected. The 23/02/16 diagram showed a further 46 potential customers and which lines intend to reach them as per phased development plans. A very rough projection of potential future usage can be made from the average usage of one thermal customer to date multiplied by potential customers. However, we all know how difficult it has been to sign up projected customers previously, but it seems to be going better over the last year or so, and looking in hindsight at what we have eventually signed up in Douala it's, imo, actually not that bad. So let's see. There seem to be some large end goals for these lines such as the airport, Dibamba and possibly Limbe for potential later phases of the pipeline extension. Edea could also be targetted from the Eastern line potentially though as TW pointed out in his link the Sanaga River looks to be a major target for HEP where 75% of the potential for HEP could be realised, it would also require over 20km of pipeline and a small river crossing so might not be at all viable.

kyc

[highasakite] 01/2/2017 18:49

Victoria Oil & Gas is arguably one of the most undervalued assets I have looked at, the management are determined to create a utility scenario from the gas to the customer. Gas found by them at Logbaba and through their own pipes to clients in Douala is a very exciting prospect and the demand is almost limitless.

[olieslim] 01/2/2017 17:09

Reminder:

Victoria Oil & Gas plc
Feb 9th 2017, 6.00 pm - Chesterfield Mayfair Hotel, 35 Charles Street, Mayfair

[...]

The presentations will start at 6:00pm and finish at approx 8:00pm. After the presentations are complete the directors will also be available to take questions during a free canapé and wine reception.

[broncowarrior] 01/2/2017 16:56

Yes, it is revenue net costs.
Given they are break even given all this development it all gets ploughed back in.

[fatnacker] 01/2/2017 15:01

Indeed I do Clunes

[sleveen] 01/2/2017 13:40

Clunes100

Agreed the 60/40 split relates to revenue,operating and capex costs etc.

[clunes100] 01/2/2017 12:54

Fatnacker - have a look at my comments on the other thread - do you concur?

[clunes100] 01/2/2017 12:54

Sleveen, you are factually correct about the VOG group loosing 40% of revenue but you are also misleading everyone for two reasons:

1. RSM are paying 40% of the operating costs associated with getting gas out of the ground and to customers;

2. RSM are paying 40% of the development costs on the licence.

So RSM will never actually receive 40% of the revenue, even if all development stops for a while.

Now what we are looking for in the update or next set of results is that all the operating and group costs are covered from revenue and hopefully some of the development costs, the rest of the development costs will be covered by the financing facilities that VOG put in place.

The upside in the profit equation will be an increase in future demand and the margin VOG makes on sales, a decent increase in thermal and power contracts will solve VOG's problems over night - margin in this business model is the trump card.

[fatnacker] 01/2/2017 12:49

Sleveen, they never had it in the first place.

[olieslim] 01/2/2017 12:44

sleveen, so why is nobody selling? Shares are hard to come by here, currently.

[sleveen] 01/2/2017 12:18

fatnacker

Yes Gryn has been putting his share in, which may indicate a long term future. On the other hand, if he doesn't he will lose the lot as nearly happened in 2012 or thereabouts perhaps he doesn't want to let KF have the lot come what may.

I still don't understand why you think losing 40% of revenue is negligible. 2017 figures will be hit hard even allowing for the slightly increased gas consumption of the new Bonaberi customers ie 600000cft/d or @60% = 360000cft/d net to VOG/GDC.