Victoria Oil & Gas Plc                     Annual Report & Accounts 2012                               Growing            ...
About UsVictoria Oil & Gas is an oil and gas exploration andproduction company with projects in Africa and the FSU.The Gro...
HighlightsLogbaba Operational Highlights                                                                                  ...
Objectives & Strategy                                                             Logbaba: 2011-12 Progress          Logba...
Key PointsLogbaba                                                                                                         ...
Map of Logbaba Operational Area    Total Existing and Potential Identified Customer BaseCameroon: Process & Customers     ...
Map of West Medvezhye                                                                                                     ...
Chairman’s StatementTurning on the TapsThere have been a number of very positive developments on ourprojects in 2012, most...
Logbaba: Project History & Market DiscussionLogbaba is located in the city of Douala, onshore Cameroon.           highligh...
Chairman’s Statement continued                                                                                            ...
Chairman’s Statement continued                                            To date the Company has                        r...
Chairman’s Statement continued VOG turned on the taps for the first time in December 2011 when it commissioned the process...
Review of OperationsGround-breaking Gas and Power in                                                                      ...
Review of Operations continued                                                                                            ...
Review of Operations continued                                                                                            ...
West Medvezhye: History & Market Context   VOG completed its acquisition of ZAO SeverGas-Invest (“SGI”)        While the 1...
Review of Operations continued                                                                                            ...
Directors’ BiographiesKevin Foo MSc, DIC, Dip Met, MIMMM                 Grant Manheim                               Auste...
Senior Management Biographies                                                                                             ...
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
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Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
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Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
Annual Report & Accounts 2012
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Annual Report & Accounts 2012

  1. 1. Victoria Oil & Gas Plc Annual Report & Accounts 2012 Growing Production Output Clean and Reliable Energy SupplyMeasuringProgress
  2. 2. About UsVictoria Oil & Gas is an oil and gas exploration andproduction company with projects in Africa and the FSU.The Group’s assets are 95% of the Logbaba gas andcondensate field in Cameroon and 100% of the WestMedvezhye oil and gas project in Siberia. Both projects areoperated by Victoria. The Company’s flagship developmentasset is Logbaba, which commenced continuous productionoperations in July 2012, located in the eastern suburbs ofDouala, the economic capital of Cameroon.Since 2009, Victoria has invested over $100 million into theLogbaba project including two wells, production facilitiesand a pipeline reaching the main customer hub in theeconomic capital of Douala. Production is set to ramp-upsignificantly throughout the remainder of 2012 and during2013. The Company anticipates cash flow break-even goingforward for the Group by the end of 2012.ContentsHighlights 1Objectives & Strategy 2Logbaba Production Growth 2Key Points 3Map of Logbaba Operational Area 4Cameroon: Process & Customers 4Map of West Medvezhye 5Progress 5Chairman’s Statement 6Logbaba: Project History & Market Discussion 7Review of Operations 11West Medvezhye: History & Market Context 14Directors’ Biographies 16Senior Management Biographies 17Directors & Other Information 18Directors’ Report 19Statement of Directors’ Responsibilities 23Independent Auditor’s Report 24Consolidated Income Statement 25Consolidated Statement of Comprehensive Income 25Consolidated Balance Sheet 26Company Balance Sheet 27Consolidated Statement of Changes in Equity 28Company Statement of Changes in Equity 29Consolidated Cash Flow Statement 30Company Cash Flow Statement 31Notes to the Consolidated Financial Statements 32Notice of Annual General Meeting 63Notes to the Notice of Annual General Meeting 64GlossaryVictoria Oil & Gas Plc Annual Report and Accounts 2012
  3. 3. HighlightsLogbaba Operational Highlights ReviewContinuous production operations commence at Logbaba in July 2012Current peak production in excess of 1 mmscf/dProduction forecasted to reach 5 mmscf/d by the end of 2012Commissioning of the process plant and 13.2km of pipeline to and Governancearound Central DoualaCompany increases participation in Logbaba to 95%VOG becomes the first gas producer ever in Cameroon to supply theindustrial market19 Gas Sales Agreements signed to raise steam/heat at $16/mmbtu Accounts($16/mcf)13 Power Proposals delivered to customers of which 6 have advancedto LOIsThe Phase 1 pipeline area (red route on map on page 4) is now complete Other informationIndependent CPR on the Logbaba gas and condensate field confirms a50% increase in total 1P Reserves and 1C Contingent ResourcesIndependent Douala gas market study provides positive assessment ofLogbaba demand and supply considerationsFinancial & Other Highlights$16.4 million of equity finance and $5.5 million of debt raised in the year$22.8 million invested in Logbaba projectStrengthening of senior management team with appointment of aDirector of Projects and additional sales staffMacquarie Capital (Europe) Limited appointed as joint corporate brokerSenior secured debt facility expected to close in Q4 2012Recent Milestones 2008 2009 2010 2011 2012 Victoria Oil & Gas enters In September, VOG The two-well drilling The President of the Commencement of Cameroon in December spuds the first well, programme was Republic of Cameroon, continuous gas and and becomes operator of La-105, the first onshore completed successfully; S.E. President Biya, signs condensate production Logbaba. well in Cameroon since well La-105 tested at the Exploitation Licence operations in July. the 1950s. 55 mmscf/d and La-106 on 29 April. Year-end expected tested at rates up to First delivery of gas in production rate of 22 mmscf/d. December. 5 mmscf/d. Victoria Oil & Gas Plc Annual Report and Accounts 2012 1
  4. 4. Objectives & Strategy Logbaba: 2011-12 Progress Logbaba: 2013-14 AimsBecome a mid-size E&P player by 2015 Flow 1 mmscf/d in July 2012 Flow 20 mmscf/d by end of 2013 Flow 5 mmscf/d at end of 2012through organic growth and acquisition Supply 40 customers in Douala First gas to power in countryFocus on core area of West Africa and surrounding area Pipeline Phase 2 commences Complete Pipeline Phases 2 & 3Build on cash flow from Logbaba to fund Attain positive cash flow from Introduce new technologies suchfurther exploration and development operations as compressed natural gasopportunities West Med: 2011-12 Progress West Med: 2013-14 AimsBecome a leading player in new thermal and Processing of new well data and Aim to secure Farm-in partner inpower projects in Cameroon surveys completed 2013Acquisition of opportunistic, undervalued Submitted drilling candidate locations for next drilling Complete winter road and drill padassets/distressed sellers programme Announced 300 million boe increase in gross prospective Complete drilling design project resources to 1.4 billion boe Obtained approval from Russian Plan for drilling to start in Q4 Ministry for development plan of 2013 an Early Production SchemeLogbaba Production Growth with Attractive Marginsfrom Sales to IndustryIndependent Assessment of Forecast Peak Production2 Victoria Oil & Gas Plc Annual Report and Accounts 2012
  5. 5. Key PointsLogbaba Review Customer Specific Benefits (Thermal)First natural gas supplier in Cameroon Energy demand is met by high- cost liquid fuels (diesel and fuel95% interest and operatorship in the Logbaba gas and condensate field oil) priced off international benchmarksLocated in the heart of a substantial industrial and energy-hungry region Natural gas supply contractsOwn and operate whole gas supply chain from wellhead to customer create approximately 30% total Governance cost savingsExcellent relationships with strong government support Improved boiler efficiencies and longer life through reduction ofDiverse industrial customer base within 10km of wellhead scaling and soot Reduced pumping, storage and19 thermal gas sales agreements (“GSAs”) signed including multi-nationals heating costs of liquid fuelsGSAs have 20-year exclusive gas supply arrangement with price fixed at Reduced maintenance costs and Accounts less downtimeUS$16/mmbtu ($16/mscf or $96/boe) for first 5 years6 Letters of Intent signed for power Customer Specific Benefits (Power)Field production anticipated to reach 5 mmscf/d by year-end 2012 Cameroon industry challenged with constant blackouts andForecast gross production to increase to 20 mmscf/d by year-end 2013 brownouts hampering expansion Natural gas-fired power solutions Other informationCurrent condensate yield of 18 bbls/mmscf will increase control and reliability of energy deliveryGross 2P reserves of 212 bcf of gas + 4 mmbbls condensate Customers can expect significant cost savings with a reliabilityOutstanding potential in other areas of the Logbaba licence area premiumAdditional 1 tcf gross best estimate prospective resources Benefits for Cameroon Advance of gas will pave the way for increased industrial expansion and foreign direct investment Environment benefits: gas energy of choice with fewer emissionsWest MedvezhyeMajor potential with best estimate prospective resources of 1.4 billion boeClassical prolific West Siberian geology; targeting structural andstratigraphic traps2013 drilling programme catalyst for re-rating of VOG4 wells drilled, one discovery well (Well-103)Well-103 has C1+C2 Reserves estimated at 14.4 million boeRecoverable Resources (C3) estimated at 170.6 million boeApproval of Early Production Scheme by Russian Ministry of NationalResourcesEarly production facility to truck oil to Nadym, located 40km away, with$60/bbl achievable Victoria Oil & Gas Plc Annual Report and Accounts 2012 3
  6. 6. Map of Logbaba Operational Area Total Existing and Potential Identified Customer BaseCameroon: Process & Customers Signed Thermal Customers and Power LOIs Gas for customers heat and power requirements represents a market anticipated to be in excess of 50 mmscf/d over the medium term Thermal GSAs Food Processors Metallurgical Imperial Foods 7 Coulée Continue 1 BSF 8 Laminoir n/a* Camlait I 10 Prometal 3 Camlait II 23 Metafrique 6 Parlite Foods 27 Other Chemical Industry SOLICAM 2 The gas processing facility drops the pressure of the gas from the Plasticam 15 CICAM 12 well conditions to the sales gas HACC 18 Pack Industry 28 specification by separating and Unalor 19 stabilising the condensate and water produced. VOG has LGCCA 21 Power LOIs developed a local market for gas CCC* 51 Camlait 10 for heat/steam generation and CICAM 12 gas-fired power. Breweries Plasticam 15 SABC I 9 Biopharma I 30 Guinness 13 Biopharma II 30 CCC 51 * New customer – spur line to be constructed4 Victoria Oil & Gas Plc Annual Report and Accounts 2012
  7. 7. Map of West Medvezhye Review Governance Accounts Other informationProgress Reserves Reserves Survey Drilling 1 estimate 1 Drilling 2 estimate 2 Construction Production SupplyLogbabaWest MedvezhyeNet Proved and Probable Reserves Net Prospective Resources Oil & Condensate Gas Total Oil & Condensate Gas Total (mmbbls) (bcf) (mmboe) (mmbbls) (bcf) (mmboe)Reserves Prospective ResourcesLogbaba Field 4.0 201.4 37.6 Logbaba Area(2) 19.0 950.0 177.3 (1) (3)West Med 103 Discovery 11.8 15.6 14.4 West Med Block 721.5 3,902.3 1,416.6Total Reserves 15.8 217.0 52.0 Total Prospective Resources 740.5 4,852.3 1,593.9(1) (2) Victoria’s West Med Reserves, as approved by the Russian Ministry of Blackwatch estimate (2012). (3) Natural Resources, are classified as C1 and C2 reserves according to Mineral estimate (2011). Russian convention and are broadly comparable to the Society of Petroleum Engineers proved, probable and possible reserves Western classification.Note:In addition, in September 2012, the Company announced an independentCPR on the Company’s proved reserves only where ERC Equipoise Limitedassessed 1P reserves of 39.1 bcf plus 32.7 bcf of 1C contingent provedresources. Victoria Oil & Gas Plc Annual Report and Accounts 2012 5
  8. 8. Chairman’s StatementTurning on the TapsThere have been a number of very positive developments on ourprojects in 2012, most notably the commencement of continuousproduction at the Logbaba Field, Cameroon (“Logbaba”) in July2012. We are very proud of what we have achieved over the courseof three years. We landed the first onshore rig for over fifty years incountry and successfully completed two wells. Today we have a A boiler house at SABC. VOG is substitutingcornerstone project with robust and increasing domestic demand for heavy fuel oil and waste oil used in raising heat with natural gas.our gas and the supply capability to meet it. These key elements havebeen independently verified as part of due diligence requirements fora debt financing package that is close to being finalised. Our keypriority remains to ramp up gas off-take volumes throughconversions of existing contracted customers, in order to strengthenthe financial position of the Company and attain positive cash flowfor the Group.Review of the Markets to move from an exploration and and around central Douala. We haveThroughout 2012, the global economy development company into one with installed nine pressure reduction andhas continued to slow with a mixture of continuous production and cash flow. metering stations (“PRMS”) at ouran austerity constrained Euro-zone and We have now achieved this and, in customers’ premises. The PRMS unitslower growth in emerging economies doing so, have distinguished ourselves reduce the gas pressure in accordanceand China in particular. The US has from the majority of our peers which with the customer’s acceptanceshown some green shoots of recovery are solely reliant on the equity capital requirements and measure the volumehaving performed better than other markets for funding. of gas transmitted. This data is then fedmajor developed economies, but further back to our control room at the Production and cash flow from ourrounds of quantitative easing, high production plant. We have since ordered flagship Logbaba project are set tolevels of unemployment and an additional 20 PRMS units which are ramp-up significantly over the comingforthcoming cuts to the federal budget expected to arrive in country before the months as contracted customersindicate that confidence will be fragile end of November 2012. These units continue to come on line. This willin the global economy in 2013. have been produced to individual provide a solid platform for growth and customer requirements and reflect ourDespite this, Africa has become a “hot the foundations upon which I believe we platform for continued productionaddress” for investors this year with a can progress this Company into a growth over the coming months.considerable amount of corporate mid-market integrated E&P company.activity in both East and West Africa. On a broad scale, one of Africa’s most Completion of the downstream worksHowever, many junior exploration critical problems is provision of reliable culminated in our announcement ofcompanies continue to see depressed energy. We believe that we have continuous production operations in Julyshare prices as investors’ price in established a strategically important 2012, by which time our first threefunding difficulties in the absence of solution for the provision of locally customers had completed their owncash flow from production. I believe sourced energy. Furthermore, we believe conversion requirements downstream ofthat during these challenging economic that this model, and our expertise, can be their PRMS unit and were able to accepttimes, the now-producing Logbaba exported to many other countries within gas. We currently have four customersProject is an exceptional project, as it is Africa, potentially forming a significant connected, with an aggregate peak off-local conditions rather than global part of our future business strategy. take of in excess of 1 million standardfactors that will ensure its success and, in cubic feet per day (“mmscf/d”) and Operational progress at Logbaba wasturn, the performance of this Company. average daily volumes (7 day week) of maintained at a steady rate throughout 0.7 mmscf/d. the financial year, with completion of allLogbaba, Cameroon of the key downstream elements of the Since July 2012, customer conversionsRDL 95% operated interest project. This included the re-opening have not advanced at a rate I wouldI am very satisfied with the progress and commissioning of wells La-105 and have hoped for or expected, but I wouldachieved by the Group throughout the La-106, installation of the production like to reassure you that this does notfinancial period and to date. In this facilities and the completion and unduly concern me or impact on thefinancial climate, it was essential for us commissioning of 13.2km of pipeline to long-term fundamentals of this project.6 Victoria Oil & Gas Plc Annual Report and Accounts 2012
  9. 9. Logbaba: Project History & Market DiscussionLogbaba is located in the city of Douala, onshore Cameroon. highlighted that industry in Douala is beset with chronic power ReviewThe field was discovered in the 1950s by Elf SEREPCA with shortages and suggested that firms faced 128 outages in 2009four wells that encountered gas and condensate in multiple which represented a total of at least 16 days. It is thereservoir layers. No gas-water contacts were detected in any of unplanned nature of the outages when the grid overloads fromthe sands encountered. The gas bearing reservoir sands are of excessive demand that causes the greatest disruption andCampanian and Santonian age of the Logbaba Formation. cost to many industries as raw materials in process at the timeExhibit 1 is a time structure map on top upper Logbaba. get thrown to waste. Therefore, customer benefits will be both contracted monetary savings versus the local power supplyVOG owns and operates, through its subsidiary RDL, a 95% Governance charges, as well as savings resulting from less disruption costsinterest in the Logbaba gas and condensate project. Since and the lost productivity that they regularly experience.the beginning of September 2009, VOG has drilled twoappraisal wells which were completed as producers, installed The Company’s power contract prices will be individually2 x 20 mmscf/d gas processing trains and installed 13.2km of tailored to each individual customer given that they will requirepipeline to deliver gas to industrial centres in and around different technical solutions and have different operatingcentral Douala. The Logbaba field is located onshore, on the regimes i.e. days worked per week and hours worked per day.doorstep of the industrial city of Douala (approximately 4km Factors that will influence contract pricing include the quality of Accountsfrom the city centre) and has gross proved and probable the generator required, monthly load factor and daily variablereserves of 212 bcf which is sufficient to supply an average of load of the customer, operating regime and the desirable30 mmscf/d (approximately 5,000 boe per day) to the market contract term. In addition, VOG is requiring some level of ‘takefor the next 20 years. The proximity of the reserves to our or pay’ commitment in the contract in order to justify themarket, the industrial customers in Douala, represents a investment in the gas-fired generators which the Company willdistinct competitive advantage enabling infrastructure build out pay for unless the buyer wishes to own and operate their ownto deliver the gas to customers at significantly reduced cost. mini-plant/generator. Each contract where VOG is contractedThe initial target markets for Logbabas natural gas are to sell power will have three pricing elements: Other informationindustrial customers in Douala for: > A monthly fixed charge to cover the cost of the generator> Substitution of heavy fuel oil and waste oil used to generate over the contracted term; heat with natural gas (thermal); and > A monthly O&M charge to cover the cost of maintaining the> Power generation at customer sites using natural gas generator based on kwh consumed; and displacing grid power (on-site power). > A monthly volume charge to cover the cost of the gas utilised in generating electrical power.Douala, the economic capital of Cameroon, is an energyintensive city with a great variety of light and heavy industry. It The total contracted price to the customer will vary but isalso serves as the principal deep water port for all of the six estimated to be similar to thermal contract pricing. The volumemember states of Central Africa. Examples of charge to the customer will once again vary depending on theCameroon/Central African industry that reside here include efficiency of the electrical conversion process but is estimatedbreweries, metallurgical foundries, food processing plants, to be in the range of $10-$16/mmbtu ($10-$16/mcf) on a gaschemical plants, textile and packaging industries. equivalent basis. In the short term, to expedite the sale of power and meet with clients wishes to replace grid powerVOG has secured a large local market to replace liquid fuels provision as soon as possible, VOG will supply power to someconsumption to generate heat, including heavy fuel oil and customers with the employment of rental power generators.waste oil. These ‘competing’ fuels are priced according to When the permanent power units become available, VOG willinternational indices and are currently estimated to cost the swap out the rental equipment with the permanent fixturescustomer on average in excess of 30% more than VOG’s under the same contract. The standard contract terms beingcontracted gas price. The Company has entered into ‘pay-as- discussed with the customers are for ten years.you-go’ gas sales agreements with customers to sell gas at$16/mmbtu (ca. $16/mcf) with prices fixed for five years and the VOG has publicly declared production targets of 5 mmscf/dcontract term lasting 20 years. After conclusion of the first five day for year-end 2012 and 20 mmscf/d for year-end 2013.year period, prices are fully re-negotiable between the sellerand the buyer. The buyer has no minimum contractual volumesstipulated in his contract but is economically incentivised totake our gas over more expensive liquid fuel alternatives. Exhibit 1: Well location map, Logbaba Field, on Top Upper Logbaba time structure (TWT).A recent independent study on pricing in Cameroon,commissioned by VOG, estimated that the dated Brentbenchmark for crude would need to fall to a price below$63/bbl to make competing liquid fuels more attractive.In addition to gas for thermal heat requirements, VOG issigning power contracts with industrial customers. TheCompany has secured LOIs to replace power sourced from thelocal grid, the primary power source of electrical energy, withthe employment of gas-fired power generators on thecustomer premises. These generators will deliver a morereliable power supply than the existing grid network wherepower demand from the network far outstrips supply causingsignificant problems for the customer. The pricing of VOG’spower contracts will represent a significant saving for thecustomer but a reduced saving compared to thermal contracts.The principal attraction and focus of the customer is thesignificantly increased reliability of this energy solution. Forexample, a World Bank report on Cameroon in 2011 Victoria Oil & Gas Plc Annual Report and Accounts 2012 7
  10. 10. Chairman’s Statement continued We also have a highly prospective market for the direct supply of power. The lack of a reliable power supply in Douala is a major concern cited by industries in the region, as it limits expansion plans and causes major operational and production issues including wastage, equipment damage and cost overruns. The Company has an established independent distribution network (with Phase 1 of the pipeline completed) that will allow us to deliver a ‘total energy solution’ to VOG has two wells, 2 x 20 mmscf/d industrial customers to fulfil all their heat production trains to condition and and power requirements. separate the gas and condensate, its own pipeline distribution network and is While the gas to power market represents rapidly developing a market with over 60 a larger and more lucrative opportunity identified customers for gas and/or over the medium term, the Company has power. 25 have already signed only recently engaged in contractual contracts/LOIs and we expect a very discussions with customers regarding the high conversion rate for the remainder. provision of power, as the capital cost to the customer is higher, relative to thermal conversion costs. Each solution must alsoUnder the terms of our gas sales > Contracting burner commissioning be individually tailored to a customer’sagreements, the customer’s agents from one of three principal needs and generic solutions cannot beresponsibility is to complete all works manufacturers in a timely fashion has pre-ordered. This is explained more fullyrequired downstream of the PRMS proved challenging. These companies in the Logbaba History and Marketunit. This involves a cost to them on had a limited presence in Cameroon Discussion on page 7. With the Companyaverage of $50,000-$100,000 including and we are working hard to rectify this. having had continuous productionproject management costs, engineering operations for approximately four Throughout this process, however, wedesign and installation of a dual fuel gas months, our customers are now able to have gained valuable experience withburner and a gas spur line from the witness a reliable gas distribution network respect to customer conversionboiler to the PRMS unit. The payback in place, which we anticipate will help requirements and in-country contractorfor all signed customers is estimated to facilitate their investment decision on competencies, and we are now taking abe less than six months. The challenges committing to a gas generator through greater role in assisting clients tothat we have encountered include the our proposed payment structure. connect to our gas network. There havefollowing factors: been two instances where we have We have recently sent 13 power offers to> Not all customers have the skills completed the prerequisite works for customers, of which six have been required to undertake pipe work, our customers and now that we have converted to Letters of Intent (“LOI”s), burner and boiler specification, continuous production operations and and we expect the first contract to be construction work and project satisfied customers, there is a backlog of signed in November 2012. With this management. additional customers waiting to be first power coming on line, together> Some customers employed local connected to the grid. I am confident with the thermal gas demand outlined contractors who were not sufficiently that we will have a minimum of 15 above, the Company anticipates year-end qualified to undertake the works and customers taking in excess of 3 mmscf/d production of 5 mmscf/d. as a result failed the inspection and of thermal gas by the end of 2012. integrity tests set by Bureau Veritas, I am very optimistic about the our pipe work inspectors. As a Our gas sales and marketing team have remainder of 2012 and our Company’s company, we have a commercial identified over 60 suitable thermal prospects into 2013. Logbaba is a interest, and a duty of care, to ensure and/or power customers in the region, fantastic project to be involved with. We all works are performed in a safe and as represented in the map on page 4 of are in a privileged position to have a robust manner and we have therefore this report. To date, we have signed 19 project which is neither demand nor become much more involved in gas sales agreements (“GSAs”) for the supply constrained for the foreseeable contractor qualification and selection. provision of thermal gas and the team is future. Both of these statements have> While customer awareness for the very much focussed on finalising contracts recently been independently verified project is high, there has been a in the Phase 1 pipeline area to maximise through third-party competent person’s degree of hesitation in converting to revenue opportunities until we are in a reports produced by Challenge Energy a new energy source and paying for financial position to embark on Phases 2 Limited (“Challenge”) and ERC the alteration work. and 3 of the pipeline construction. Equipoise Limited (“ERCE”).8 Victoria Oil & Gas Plc Annual Report and Accounts 2012
  11. 11. Chairman’s Statement continued To date the Company has road in preparation for construction of Review exported five tankers of condensate to the Limbe a drilling pad planned for Q1 2013. We refinery, located 60km will then look to qualify and finalise a from the city of Douala. selection of contractors for the next drilling programme over the coming months as well as contractors to perform the logging and well-test Governance operations. The Company will then commence drilling during the winter of 2013/2014 in targeted locations which have been defined by the Mineral study in the Well-103 area.VOG owns and operates the entire supply Based on our recent geotechnical work, Accounts the Company believes that Well-103chain from the wellhead to the final was drilled on the edge of a significantconsumer. We feel this is a considerable structure. Our next drilling campaign, if in line with management expectations,achievement and offers us a strategic could lead to a very significant reserveadvantage. upgrade for the Company in the Upper Other information Jurassic as well as the Lower Cretaceous Achimov layers. In light of the enhanced prospectivity ofA Gas Market Study, undertaken by extremely hard to meet our publicly the asset, we would have liked to financeChallenge, a leading advisory stated targets and are confident that this drilling programme ourselves.consultancy group to the oil and gas these targets will be achieved. However, the Company is planning toindustry, highlights a very positive farm-out a portion of its interest in Westassessment of the Logbaba project, West Medvezhye Med to preserve capital and forge aheadconcluding: “VOG’s strategy to 100% operated interest on the infrastructure roll-out anddisplace refined products consumed by Progress at West Medvezhye (“West customer expansion at Logbaba. Weindustrial customers for thermal heat Med”) during the financial period and have begun this process with somegeneration and substituting grid power to date has been very pleasing and we selected screening of potential candidatesin the major industrial centre of Douala have made two very notable and anticipate concluding a farm-outis robust and reasonable with few advancements on the project. process by Q4 2013. We do not intendmaterial risks.” Challenge’s assessment I have always maintained that West Med to use cash flow from Logbaba to fundof gas and gas-to-power market has the potential to become a company- exploration in West Med.performance and growth split by phase maker. Whilst we have a fairly modestis highlighted on page 2. I often feel that West Med is overlooked discovery to date of 14.4 mmbbls of oil, to some degree by investors in our overallIn October 2012, we announced an there is very exciting geological potential asset portfolio but its significance shouldindependent reserves estimate completed on the block and this was confirmed by not be forgotten. Our first productionby ERCE on the Company’s proved an independent geological modelling from West Med is currently estimated toreserves. This was commissioned by the study and resource audit carried out by begin in 2016 and should provide aCompany in relation to a debt funding Mineral LLC (“Mineral”). Following strong platform for production growthproposal that we are advancing. ERCE completion of their report in August and cash flow over the medium term.concluded a 50% increase in total 1P 2011, the Company announced anReserves and 1C Contingent Resource increase in best estimate unrisked Management Changesgas volumes with 1P (“Proven”) Reserves prospective resources in excess of VOG has strengthened its seniorof 39.1 billion cubic feet (“bcf”), plus 300 million barrels of oil equivalent management this year with the addition32.7 bcf of 1C Contingent Resources (“boe”) to over 1.4 billion boe. of a new Director of Projects, Neilleading to a total potential 71.8 bcf of The second notable achievement was the Kendrick, a professionally qualifiedproducible gas (gross), plus 1.14 million approval of the development plan for an Mechanical Engineer and Projectbarrels (“mmbbls”) of condensate. This early production scheme by the Ministry Manager who has held a number ofendorses our supply capability for the of Natural Resources in August 2012 for senior management and executive levelforeseeable future. Well-103 and the surrounding area. We positions over the past 25 years withI look forward to the coming months are making good progress at West Med both publicly and privately heldand years with genuine optimism. We with a well defined project and scope of companies in the oil and gas sector. Ashave made great progress on the works for the next three years. Director of Projects, Neil is responsibleLogbaba project during the financial for all aspects of project delivery and is We have commenced building a winterperiod and beyond. We are working currently concentrating on leading the Victoria Oil & Gas Plc Annual Report and Accounts 2012 9
  12. 12. Chairman’s Statement continued VOG turned on the taps for the first time in December 2011 when it commissioned the process plant and the first 4.5km section of pipeline. This was the first ever commercial application of natural gas in Cameroon.customer conversion effort in Logbaba which may require additional funding in As anticipated in last year’s accounts,and growing the business in Cameroon. the future. During the financial period RSM Production Corporation (“RSM”) the Company successfully raised has initiated arbitration proceedings inUnder the leadership of Jonathan Scott £10.1 million in equity to continue to relation to the forfeiture of theirBarrett, Managing Director of RDL, the fund the development of its projects in interest in Logbaba. Since the initialCompany has expanded its sales and Cameroon and Russia and for the Request for Arbitration was made bymarketing team in Douala with the Group’s working capital requirements. RSM there have been significant delaysaddition of dedicated professionals to In addition, the Company drew down in the selection of the arbitrators andhelp lead the effort in country. The team $5.2 million under a short-term finalisation of the terms of reference,has done an excellent job having signed unsecured $8 million loan note facility. which were only agreed in final formup 25 customers to date, including power By the end of the period VOG has between the parties on 19 OctoberLOIs, and has identified a total of over invested a total of $103.7 million in 2012 and are expected to be signed60 existing customers and prospects. Logbaba and $41.6 million in West Med. shortly. We will vigorously defend thePhilip Rand stepped down as Non- claims and our UK and US lawyers view Subsequent to the financial year-end,Executive Director this year to pursue is that the forfeiture should be upheld. the Company raised a furtheranother opportunity that requires a The arbitration is currently expected to £3.15 million in equity. Thesegreater degree of international travel take place in June of next year. additional funds were drawn as a bridgeand a full-time commitment. We are to positive cash flow from operations at I would like to thank all VOG employees,grateful for Philip’s service to the Logbaba. The Company expects to my fellow Directors and contractors whoCompany over a number of years and reach positive cash flow for the Group have participated in our progress this year.wish him well in his future endeavour. going forward before the end of the year. We have had some really notableGoing forward, we are also looking to achievements and I look forward to In addition, the Company is currentlystrengthen the Board with the expected carrying on our work together to negotiating a large senior securedaddition of one or two directors in the continue to optimise our asset base going revolving credit facility with a top-tiernear future, including an active search forward. I would also like to thank all our financial institution to fund its ongoingfor a CEO to lead the Company into its shareholders for your continued support capital requirements at Logbaba and tonext growth phase. of the Company. I believe the next 12 support the Group’s working capital. months will bring some very exciting VOG’s strategy for the next 12-18Corporate news flow and developments and I months is to complete Phases 2 and 3 ofThe Board seeks to maximise sincerely hope you will continue to the pipeline for Logbaba and achieveshareholder returns when considering support us as we make this happen. sales volumes of 20 mmscf/d. Thefinancial solutions for its ongoing capital Company also hopes to announce withinrequirements. The Company constantly this time frame a farm-out of West Medreviews asset and corporate investment Kevin Foo to cover the next drilling programmeopportunities that will increase our Chairman anticipated in the winter of 2013/2014.exploration and production portfolio10 Victoria Oil & Gas Plc Annual Report and Accounts 2012
  13. 13. Review of OperationsGround-breaking Gas and Power in ReviewCameroonVOG has pioneered the first ever onshore gas delivery network toindustry in Cameroon. Having completed production drilling, Governanceconceptual design and FEED, VOG set about implementing thedownstream elements of the Logbaba project in financial year 2012.The Logbaba project involves taking high pressure gas from the The pipeline route of way has been selected towells, processing it to clean it, removing condensate and then minimise disruption to the population with the majority of the pipeline running parallel to thedistributing it through a low pressure pipeline network to our state railway line or along public highways. Accountscustomers. Meanwhile, appraisal of VOG’s West Med discovery tooka big step forward with the completion of its Early ProductionScheme project plan and its approval by the relevant authorities.This scheme will pave the way to realising the full potential of the1.4 billion barrels of oil equivalent prospective resources in VOG’s Other informationWest Med licence area.Logbaba, Cameroon July and 900mm of rain in August. By VOG required a minimum daily average95% interest September 2011, the production tree throughput of 0.5 mmscf/d. While total assembly work for the wells had been gas thermal and power demand at theDownstream Operational completed and we had installed the first Magzi estate is anticipated to be inAchievements 1.2km section of pipeline. At the site, excess of 5 mmscf/d over the next twoThe financial year ended 31 May 2012 36 of the foundation piles were years, sufficient customers were neithermarked a period of tremendous completed to a depth of 10 metres. converted nor ready at this time to takeoperational progress on the ground. Meanwhile, our gas plant contractor, gas so the Company put the processYou will recall that the Company was Expro, had completed testing of the plant into standby mode afterawarded its Exploitation Authorisation majority of the equipment at their base commissioning.for Logbaba via Presidential Decree in including process plant vessels, flowApril 2011, just before the last financial VOG continued the pipeline expansion lines and ancillary equipment.year end. This enabled the Company to northward to the city of Douala and Specifications and sizing of PRMS unitsembark on the downstream elements of completed the Phase 1 pipeline area of for the first 20 customers had also beenthe project which consisted of: 13.2km in May 2012 which is shown as completed and the first nine units were> Re-opening wells La-105 and the red line on the map on page 4. being shipped into country. La-106; In July 2012, the Company announced> Trenching, jointing, installation and After the end of the rainy reason, work that the first three customers had commissioning of the gas pipeline continued at a more rapid pace and by completed their gas conversion network; December 2011, VOG had fully requirements and were taking gas> Installation and commissioning of installed and commissioned the process with an average daily demand of the process plant; and plant, commissioned the wells and 0.7 mmscf/d.> Installation of pressure reduction, completed the first 4.5km of pipeline. Recently, the Company received the metering stations and boiler This enabled the Company to deliver results of an independent gas market conversions on customer premises. first gas to a customer on the Magzi study carried out by Challenge. This was estate by the end of December 2011In June 2011, pipeline and civil commissioned at the request of a during the commissioning process. Thiscontractors were mobilised, excavation financial institution as part of a financing was a very creditable achievement for aworks commenced on our site for the package that is currently under Company of our size and the result ofprocessing facilities and work began on negotiation. This report was a hundreds of thousands of VOGthe production trees and baseline tremendous endorsement of employee and contractor man hours.caliper logs to prepare the wells for management’s projections and strategycommissioning. To satisfy the minimum throughput and outlined a very robust demand curve conditions of the processing plant, sized for gas and gas-fired power. ChallengeThe works progressed satisfactorily over at 20 mmscf/d for each of two also referred to successful analogues inthe next few months despite very tough production trains, and to operate safely Tanzania and Ivory Coast and concludedand almost unprecedented weather and commercially on a continuous basis, that the Company is competitively wellconditions with 1,600mm of rain in Victoria Oil & Gas Plc Annual Report and Accounts 2012 11
  14. 14. Review of Operations continued Logbaba Gas Reserves, 100% Basis (bcf) Category Oct 10 Health and safety is a key driver of the Logbaba Field Group’s operational performance. In Logbaba Proved Reserves (1P) 49 2012, the Company has recorded over Proved + Probable Reserves (2P) 212 500,000 man hours from VOG employees Proved + Probable + Possible Reserves (3P) 350 and contractors with just two lost-time Entire Logbaba Block incidents. Prospective Resources >1,000placed vis-a-vis other gas exploration and did not test the fourth well when it had calculated 1P reserve volumes ofappraisal activity in Cameroon. encountered further gas as it was 39.2 bcf of gas and 0.62 mmbbls of targeting oil). condensate and 1C resources ofAs of today’s date, we have four 32.7 bcf of gas and 0.52 mmbbls ofcustomers taking gas with a combined There is considerable resource potential condensate. ERCE employed standarddemand in excess of 1 mmscf/d and by in the remaining areas of the Logbaba petroleum evaluation techniques,December 2012, we are forecasting a Block which are thought to share the following the guidelines outlined in theyear-end production rate of 5 mmscf/d. same geology. This potential has been 2007 Petroleum Resources ManagementThis will include the first gas to power in part confirmed by results of our System. The Logbaba Formation isunits in country. passive seismic survey which provided divided into Upper and Lower sections, the first new geophysical information toWe have also completed installation of and ERCE has assigned most of the be acquired over Logbaba since thethe tanker loading facility which was proved reserves to the Upper Logbaba discovery was made in the 1950s. Theseinstalled at the Logbaba production formation. ERCE has assigned the survey findings are in line with ourplant for export of condensate. Tankers additional recoverable volumes it has geological understanding of thewith a 36,000 litre capacity export calculated for the Lower Logbaba as 1C Logbaba reservoir sands and correlatecondensate to the Limbe refinery Contingent Resources pending the well with data from the four old wellslocated 60km away. To date, we have outcome of a satisfactory remediation and and the newly drilled wells, La-105 andexported five tanker loads to the refinery. testing programme which demonstrates La-106. Of particular interest, the that improved flow rates can be results highlight a major potentialSubsurface and Geology achieved from the Lower Logbaba. hydrocarbon accumulation around 2kmThe Company holds a 95% working from the new wells surface location. Despite a reduction in the currentlyinterest and is operator in the Logbaba This exploration prospect, which lies bookable 1P Reserves, ERCE’sBlock. The Company’s internal reserves entirely within the Company’s licence independent assessment represents aand resources estimates at Logbaba block, could be substantially larger than 50% increase in aggregated 1P Reserveswere reconfirmed in 2012 by the existing discovery and has not been and 1C Contingent Resource gasBlackwatch Petroleum Services Limited, seen in any previous subsurface studies, volumes compared to the Company’s(“Blackwatch”), the Company’s due to the lack of geophysical data. internal estimate, which comprisesretained consultants. The Proved and Technical 1P Reserves of 46.7 bcf in theProbable (2P) gas reserves in the Separately, as part of ongoing Upper and Lower Logbaba, but carriesLogbaba field are contained in discussions with a financial institution no 1C Contingent Resources.Campanian and Santonian age sands of regarding a senior secured debt facility,the Logbaba Formation. All six of the VOG was requested to carry out an A summary of the estimated reserveswells drilled to date in the Logbaba independent CPR of the Company’s and resources under differentblock have encountered significant gas proved reserves. The Company classifications that the Company isintervals and all of the five wells that contracted ERCE and in October 2012, carrying for Logbaba is highlighted inwere tested flowed gas to surface (Elf the Company announced that ERCE the table above.12 Victoria Oil & Gas Plc Annual Report and Accounts 2012
  15. 15. Review of Operations continued Review GovernanceAt West Med, further to approval of the Consultants at Mineral leading the VOG technical team through their seismic reprocessing andEarly Production Scheme by the Russian geological modelling study findings.Ministry of Natural Resources in August Accounts2012, we have a well-defined project andscope of works for the next three years andthe Company is gearing up for an excitingperiod ahead. Other informationWest Medvezhye, Russia 2012 and a work programme including well design as well as studies of the100% interest a two-well drilling campaign was terrain, soil mechanics, access andThe West Med block is located near the approved by the authorities. The wells ecological issues.Yamal Peninsula, North West Siberia, in are set to target the Jurassic discovery During the period, work continued onone of the most prolific gas producing horizons successfully encountered by conceptual screening and developmentareas in the world and is adjacent to the Well-103 and also new hydrocarbon studies to monetise West Med’s largegiant Medvezhye and Urengoy fields. potential horizons in the Lower prospective resources and to exploit theThe Company holds a licence for West Cretaceous Achimov layers (Exhibit 2) Well-103 discovery to generate cashMed covering 1,224km2, and has a identified by Mineral as highly flow. In January 2012, VOG contracteddiscovery well, Well-103, with ‘C1 plus prospective. LLC Nefteproject, based in Tyumen,C2’ reserves of 14.4 million boe under The drilling design contract for these Russia to develop a project plan for anthe Russian classification system. planned wells was awarded to CJSC early production scheme for theOperational progress during the “TjumenNIPIneft” in March 2012. discovery area around Well-103. Thisfinancial year was excellent. Following a The scope of work includes detailed project was completed and agreed byseismic reprocessing and geologicalmodelling study commissioned inFebruary 2011, the Company reported Exhibit 2: A Schematic of Formation of the Achimov Strata Deposits.in September 2011, that independentreserve auditors, Mineral had confirmeda 300 million boe increase in grossprospective resources to 1.4 billion boe,comprising 670 mmbbls of oil and730 million boe of gas and condensate.Mineral is a leading consultant in Russiafor this specialised geological work andhas an excellent proven track record inSiberia where our West Med block islocated. We believe its updatedassessment of over 1.4 billion boe is ofmajor significance and demonstrates thevery high exploration potential of ourWest Med block.This programme was presented to theYamal District regional petroleumauthorities in Salekhard in February Victoria Oil & Gas Plc Annual Report and Accounts 2012 13
  16. 16. West Medvezhye: History & Market Context VOG completed its acquisition of ZAO SeverGas-Invest (“SGI”) While the 103 discovery well proved hydrocarbons in the which owns a 100% interest in West Medvezhye in 2005. In Jurassic formation in a small area of the licence, there remains 2006, independent reserve auditors DeGolyer and large hydrocarbon potential in other parts of the licence area MacNaughton attributed best estimates for the total yet to be explored. In 2008, VOG’s new technical team prospective recoverable resource volumes for the 1,224km2 launched a studies and data acquisition programme integrating licence of approximately 1.1 billion boe. the Company’s existing seismic and well data with additional data from conventional and new advanced technologies. Following an unsuccessful three-well drilling programme in 2005/2006 where VOG, under previous stewardship, targeted This programme comprised direct Hydrocarbon Indication the shallow gas horizons on the north east flank of the licence technologies including passive seismic Infrasonic Passive where large discoveries had been proved in the neighbouring Differential Spectroscopy (IPDS), usually referred to as Passive Medvezhye licence area (SGI found hydrocarbon presence but Seismic, and Gas Tomography which is primarily based on in non-commercial quantities), discovery Well-103 was drilled surface geochemistry. This technology programme was in 2006/2007 in a more central location of the licence area, to a implemented in two stages over two years. This new data was total depth of around 3,900 metres and intersecting two correlated with the data from the existing wells and seismic in hydrocarbon-bearing intervals in the Jurassic (J2) and order to re-map structures and re-model the subsurface geology. Bazhenov at depths of between 3,718 and 3,794 metres. Both stages were completed successfully and the results showed strong correlation with the 2D seismic and Well-103 data. This was a major step forward for the Company as the presence of an operating petroleum system enabled VOG to Further to these positive results, in February 2011, the successfully apply for exploitation status of the licence. Company commissioned a seismic reprocessing and However, the discovery Well-103 intersecting the very edge of geological modelling study to be carried out by a Russian the reservoir was relatively modest enabling us to book C1 and geoscience consulting institute, Mineral. C2 reserves in 2008 of 14.4 million boe. This was approved by the Russian Ministry of Natural Resources under the Russian Classification system (C1 and C2 being broadly analogous to Exhibit 3: 103 discovery area and previous drill targets in north east flank Proved Probable and Possible Reserves under Western of the licence area. conventions). There exists several routes for the commercialisation of the West Med hydrocarbons. The neighbouring town of Nadym is located 44km away with access by all-weather road where there exists a domestic market for crude and condensate. The Chircha railroad station is located within the south west boundary of the licence and the river port and loading terminal of Old Nadym are located 22km away. From the river port, crude can be barged to the Obskaya Bay and shipped in the summer season via tanker to Rotterdam. For gas, one of Gazprom’s principal gas transmission pipelines in the area runs along the eastern border of the licence and the nearest Central Gas Processing Unit is located 18.5km from West Med.14 Victoria Oil & Gas Plc Annual Report and Accounts 2012
  17. 17. Review of Operations continued Review West Med is located near the Yamal Peninsula, in North West Siberia, in one of the most prolific gas producing areas in the world Governance Accounts Other informationthe Company in April 2012. Further to > Screening, qualification and finalsubmission of the report to the Russian selection of contractors includingMinistry of Natural Resources, the drilling companies, well logging andproject plan was approved in August facilities companies; and2012. The scheme established costs and > Acquisition of all necessary consentsschedules for oil, gas and condensate and permits for drilling.production facilities and supporting Based on this preliminary assessmentinfrastructure. The gathering and work on the Well-103 discovery, thedistribution network design and Company is currently planning for firstengineering will be phased with facilities oil sales via an early production schemedesign, starting with fast track in 2016. Following the Company’sdevelopment of the Well-103 discovery. decision to farm-out a portion of itsWork has continued on the drilling interest in West Medvezhye, a datadesign project but the current estimate room has been prepared and initialfor completion of this project, which potential candidates have been screenedincludes public consultations and in anticipation of concluding a farm-outpermitting approvals, is not anticipated by Q4 2013.until February 2013. This will not givethe Company sufficient time to mobilisedrilling operations in the coming winter Radwan Hadiperiod. As a result, the Company now Chief Operating Officeranticipates postponing its two-well (Radwan Hadi is also a Director ofdrilling programme until the winter of Blackwatch)2013/2014. Neil KendrickNotwithstanding this, the Company Director of Projectswill continue to advance the West Medearly production project over thecoming 6-12 months. Worksoutstanding prior to the next drillingcampaign include:> Completion of the drilling design project estimated in Q1 2013;> Completion of a winter road and a drill pad in Q1 2013; Victoria Oil & Gas Plc Annual Report and Accounts 2012 15
  18. 18. Directors’ BiographiesKevin Foo MSc, DIC, Dip Met, MIMMM Grant Manheim Austen Titford ACAChairman Deputy Chairman Executive DirectorKevin Foo has had a 40-year career in Grant Manheim has extensive financial Austen Titford is a Charteredall aspects of mining, including experience in the City of London, Accountant with more than 20 years’technical, operational and project gained over 38 years at a top-tier financial and commercial experiencemanagement and has run several public investment bank. In addition to his working for FTSE 100 and AIM-companies. He has worked on five financial experience, he also has quoted natural resource companies,continents including 20 years in knowledge of the oil and gas sector including: Lonrho plc, LASMO plc,Kazakhstan and Russia and is a specialist having been the Chairman of the BHP Billiton plc and Celtic Resourcesin the development of mines in the executive committee of a company Holdings plc. He has worked onFSU. He was formerly the Chairman of whose business was investment in, and projects in Africa, Iran, Russia andBramlin Limited, Eureka Mining plc development of, oil and gas properties Central Asia and brings a broad mix ofand Managing Director of Celtic in the United States. financial experience, covering both theResources Holdings plc, all AIM- project development and operationalquoted resource companies. He helped Robert Palmer FCA phases.build Celtic from a sub-£1 million Finance Directormarket capital company in 1999 to the Robert Palmer is a Charteredpoint where it was taken over by a Accountant. He combines his role asRussian group in 2007 for £170 million Finance Director with his position as acash. senior partner in a consultancy-based accountancy practice where he specialises in providing financial advice to small- and medium-sized enterprises. He holds a number of directorships in private companies.16 Victoria Oil & Gas Plc Annual Report and Accounts 2012
  19. 19. Senior Management Biographies ReviewRadwan Hadi Martin Devine Eckhard MüllerChief Operating Officer Commercial Manager, London General Manager, RussiaRadwan Hadi is a petroleum/reservoir Martin Devine has over 12 years’ oil Eckhard Müller has 35 years’ experienceengineer with over 30 years’ experience and gas experience, including four in exploration and production,in the upstream oil and gas industry. He years’ investment banking as a Senior including four years as Chief Geologisthas worked on a broad range of Associate with JP Morgan Chase. He for KazGerMunay and six years as aintegrated projects including reserves has substantial Mergers and senior geologist with Gaz de France. Governanceestimation, development planning and Acquisitions transactional experience, as He has been responsible forasset valuation. Hadi has worked on well as debt advisory and oil and gas development projects in Germany,numerous projects in the Middle East, client coverage exposure. Devine has Mongolia, Kazakhstan and Russia andEurope, South East Asia, and Africa. also held senior positions with Dana has held the position of GeneralSpecifically in Africa, he has worked on Petroleum plc and El Paso Energy Inc. Manager, Russia with Victoria for overprojects in the Cameroon, Equatorial five years. AccountsGuinea, Ghana, Mauritania, Mali and Honoré Mbouombouo DaïrouEthiopia. Deputy Managing Director, Cameroon Vladimir Andreyev Honoré Mbouombouo Daïrou has over Chief Engineer, RussiaJonathan Scott-Barrett 13 years’ oil and gas industry Vladimir Andreyev has over 30 years’Managing Director, Cameroon experience as a petroleum engineer. oil and gas industry experience.Jonathan Scott-Barrett is a Chartered Daïrou has graduated with a Master of Andreyev graduated from Kuybishev Other informationSurveyor with substantial natural Science degree in Petroleum Polytechnic (Oil Faculty) as a Miningresources expertise. He is a former Geosciences from the University of Engineer. He began his career as aExecutive Director of Celtic Resources Aberdeen; a Master of Science degree in drilling operator in a large RussianHoldings plc and a former Chief Mining and Petroleum Geology from drilling organisation where he workedExecutive Officer of the London AIM- the University of Yaoundé 1, his way to the position of Chieflisted mining company Eureka Mining Cameroon; and a Master of Philosophy Engineer. Andreyev also spent over 20plc. Scott-Barrett was formerly a in Environmental Management from years as Production Manager fornon-executive director of the the University of Stellenbosch, South Rosneft (formerly YuKos), before$13 billion conglomerate Hanson plc. Africa. Daïrou has worked on numerous joining the Company as Chief EngineerHaving previously held the position of international exploration, production in 2007.Commercial Director in Victoria’s and environmental operations as aLondon office, Scott-Barrett, a fluent consultant prior to joining theFrench speaker, has taken on the Company in 2009.Country Manager position inCameroon since the beginning of 2011. Divine Mofa Operations Manager, CameroonNeil Kendrick Divine Mofa has more than 17 years ofDirector of Projects, London oil and gas industry experience. ANeil Kendrick is a professionally graduate from Prairie View A&Mqualified Mechanical Engineer and University in the USA, he has ledProject Manager. Kendrick has held various engineering projectsseveral senior management and accountable as project manager andexecutive level positions over the past engineer for the technical, financial and25 years with both public and private commercial aspects of offshore andcompanies in the oil and gas sector. His onshore field exploration andmost recent role was as project manager development operations. Mofa has heldfor Expro where he was responsible for senior positions with J Ray McDermott,the on-time supply, installation and Oceaneering and Alseas.commissioning of Victoria’s Logbabagas plant in 2011. Victoria Oil & Gas Plc Annual Report and Accounts 2012 17

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