Victoria Oil & Gas provides an update on its operations at Logbaba, Cameroon.

Highlights • Second well, La-106 flowed gas at rates up to 22MMscf/d (ca. 3,600 boepd) • Facilities and pipeline projects and first gas delivery on schedule for December 2010 • 20 year exclusive Gas Sales Agreements with the gas price fixed at $16 per million btu for the first 5 years • Appointment of Don Nelsen as Country Manager, Cameroon

Logbaba represents the first commercial onshore gas discovery in Cameroon. The field is located in the Eastern part of Douala, the industrial capital of Cameroon and the seaboard hub of Central Africa and its member countries.

The Company has successfully drilled and completed two production wells and is on schedule to deliver gas to first customers during December 2010. VOG aims to benefit from its significant first mover advantage and capitalise on Cameroon's strategic location and growing energy demands.

The Company offers a considerably cheaper source of fuel and reliability of supply to industrial users, power suppliers and liquid fuel users. Approximately 80% of the initial customer base lies within a 10km radius of the deposit and the Company forecasts that the market will grow to over 100MMscf/d per annum within the next five years.

Logbaba La-106 Well Testing The second well drilled by the Company, La-106, has continued to flow from the initial perforated interval in the Lower Logbaba formation during most of July. As previously reported, the delivery of special equipment to assist with the high temperatures and pressures experienced in the well bore was duly procured and the perforation of the remaining intervals was successfully completed.

Following completion of the last perforations the well was re-opened to flow on Saturday 14 August and flowed at rates up to 22MMscf/day, (ca. 3,600 boepd,) at different choke sizes up to 36/64 inch and well head flowing pressures up to 3,078 psi. The Company's drilling and operations team are continuing to prepare this well for production.

The first well drilled by the Company, La-105, which flowed at rates of 55MMscf/d (ca. 9,100 boepd,) and 1,000 bbl/d of condensate is more than capable of servicing the anticipated market demand in the medium term.

Production Facilities and Pipeline Following the award of the gas processing plant contract to Expro in July, contracts have now been awarded for the polyethylene pipeline and fittings, directional drilling and jointing equipment. The first pipe supplies have been shipped this week. All other activities including licences and permits are progressing on schedule.

The expected date for the first gas deliveries to customers remains December 2010. Our sales and gas marketing team in Douala have signed 20 year exclusive Gas Sales Agreements with the gas price fixed at $16 per million btu for the first 5 years. Additional customers continue to be signed up.

Tags: Victoria Oil & Gas Plc