Some oil and gas companies seem to go for ages without any developments - then, a bit like London buses, three come along at once.
I know Victoria didn't exactly have a news moratorium, but it seems that recently there's been a spate of good news flow on both its main assets after a frustrating year during which nothing seemed to be happening.
That's particularly good news as VOG is a former star of AIM which fell from a great height after Russian prospects failed to materialise (take a look at the share chart - the price hit 250p in 2006 and the company is now trading as a penny stock). This has been a trader's joy and an investor's nightmare with its volatile share price.
It came to AIM in 2004, with an initial focus on Russia and Central Asia, where CEO Kevin Foo and his team all had managerial experience in oil and gas. More recently though it's been transformed, buying 75% of Severgazx-Invest (which held the West Medvezhye licence) and 100% of Bramlin.
Now, the company's principal assets are the Logbaba gas and condensate project in Cameroon(of which it owns 60%), and West Medvezhye gas field in Siberia (100% owned). In 2007, the company changed its strategy from pretty much pure exploration, to prioritise production and cash flow. That may not have been the obvious move at the time but it looks pretty good in hindsight. It's now moving to develop Logbaba rapidly, and that should give the company high cash flow generation from a captive market.
Let's get the latest results out of the way first. They showed a £42.4m loss - but £35.5m of that represents a writeoff of the Kemerkol project in Kazakhstan, which is currently the subject of a court case. On a cash basis, the company's loss was £6.8m, and that's a reduction on the previous year's £10.8m [1] . My guess is the group isn't going to make money this year, either, as Logbaba won't be onstream till the second half of the year.
Logbaba is located close to Douala, the economic capital of Cameroon. One of the good things about Cameroon is that it's one of the more stable economies of sub-Saharan Africa; largely agricultural, with industry and trade focused on Douala. One of its major problems? Chronic power shortages. So the news that Hyundai is going…
