This has been a most significant year for Victoria Oil & Gas with considerable value added to our assets and extensive work completed at site on our principal projects. At our flagship Logbaba gas and condensate project in Douala, Cameroon we expect to commence production this year. At West Medvezhye, prospective resources are now in excess of 1.4 billion barrels of oil equivalent (boe), exceeding the previous estimates by approx. 300 million boe, and including increased oil prospectivity to 670 million bbls. Across the Company, we have increased net reserves by 40% to 52 millionboe and net resources by 30% to 1,594 million boe. Shareholders have always supported these investments and it is now the Company's responsibility to return added value to shareholders.

Review of the Markets

The financial markets remained extremely volatile throughout the period and fears over economic stability have increased further this year. The Eurozone debt crisis, global cut backs and austerity measures have dominated the headlines with gloomy predictions of economic growth in theWest for the foreseeable future. Inaddition, civil unrest in the Arab world and the tsunami in Japan have only served to increase the volatility in the energy markets.

Access to capital markets in this economic climate has been challenging for smaller AIM-listed E&P companies. In this context, I am very pleased that Victoria has been able to continue exploration and development operations apace, securing additional finance of approximately $34 million in the financial period and reducing our Group losses by $1.4 million to $4.7 million.

Logbaba, Cameroon (VOG 95% owned and operated)

The Logbaba gas and condensate project in Cameroon is now approaching its initial production phase with first gas sales anticipated by the end of this year. Logbaba represents a rare opportunity in Africa with ownership and control of afully integrated gas supply chain. The Company owns and controls its own gas distribution network, which is currently nearing the end of construction, with marketing and sales of its share of gas to industrial end users located on our doorstep in Douala, the economic capital of Cameroon. Victoria first entered Cameroon less than three years ago and to drill and complete two successful wells, secure a market for our gas and build a gas plant and pipeline network to our customers, all in a built up area of Douala is truly outstanding progress.

Industry in Douala is severely constrained by high energy costs and unreliable delivery. Victoria has a captive market that is eager to take Logbabagas because it provides direct savings on energy costs, cleaner, more reliable energy and fixed prices for five years.

Logbaba gas is expected to attract new industrial entrants to the region and encourage capital expansion from existing customers with certainty of supply at a lower cost base. Importantly for Victoria, the terms of our gas sales agreements also mean we are not exposed to gas price fluctuations.

Since the award of the Exploitation Licence signed by President Paul Biya in April 2011 we have made good progress, notwithstanding a particularly rainy wet season. When the licence was granted, the key downstream elements that remained to be completed were:

Tags: Victoria Oil & Gas Plc