Victoria Oil & Gas PLC – Preliminary Results

The Company is pleased to announce the financial information for the year ended 31 December 2018. 

Year in Review

• Grid Power customer, ENEO, ceased consumption in January 2018
• 62% decrease in annual gas sold – Gross 1,410 mmscf /Net 804 mmscf (2017: Gross 3,684 mmscf /Net 2,163 mmscf)
• 66% decrease in average daily gas production 3.75mmscfd (2017: 10.98mmscfd)
• Attributable revenue of $10.8 million (2017: 23.5 million), EBITDA a loss of $0.53 million, (2017: $4.59 million), Loss before tax $8.3 million, (2017: $10.7 million)
• Cost cutting programme commenced – 24% reduction year-on-year
• 8 additional customers consuming gas with 39 customers at year end
• On 21 December 2018, ENEO entered into a three-year binding term sheet with GDC for gas to power supply to 30MW Logbaba Power Station
  –   peak delivery of 6.1mmscfd on an 80% minimum Take or Pay basis – a minimum gas supply of 4.88mmscfd
  –   initial gas sale price of $6.75/MMBtu to increase over the three-year term of the agreement by $0.10/MMBtu annually

Post period-end Highlights

• Board strengthened:
  –  Roger Kennedy appointed Executive Chairman following the retirement of Kevin Foo
  –  John Knight and John Daniel appointed Independent Non-Executive Directors
• $17.7 million (gross) raised through the issuance of 104,357,488 new Ordinary Shares at 13 pence per share
• Board reviewing CHL Logbaba royalty and has suspended payments until review is completed
• Operating cost reduction programme continued to improve operating margins
• Q1 2019 average gas production rate increased by 127% during the period to 10.10mmscfd (Q4 2018: 4.45mmscfd)
• ENEO gas consumption consistently over 5.5mmscfd during the Quarter having recommenced on 22 December 2018

Roger Kennedy, Chairman, said:

“The Company is for the first time in many years on the right track with lower costs, a better defined strategy, and the leadership to deliver value to shareholders.  2018 was a difficult year accentuated by past mistakes; however, the events since the year end, with the injection of new capital by significant shareholders backing our business model, Board and Management changes, production levels increasing, and a strengthened financial position, ensures that the future looks brighter for shareholders.”