The company acquired the royalty interest from PR Marriott Drilling (PRM) by the purchase of its one third interest in Cameroon Holdings (CHL).
In July 2009, Rodeo Development, a wholly-owned subsidiary of VOG, signed a deal with CHL part of which provided for a royalty payment on production from the Logbaba gas and gas condensate project.
The royalty is calculated on a sliding scale averaging 6.8% of project revenues over a 20-year anticipated project life.
VOG has purchased 58% of PRM’s shares in CHL for a consideration of $2.5m in cash and drilling equipment to the value of $1m.
VOG has also agreed to buy the remaining 42% of PRM’s interest in CHL in 90 days for a cash consideration of $2.5m.
The company received an exploitation licence for the development of the Logbaba field by Presidential Decree on 29 April 2011.
Logbaba has proven and probable reserves of 212 billion cubic feet of gas (35.3 million barrels of oil equivalent).
VOG expects gas sales of eight million standard cubic feet per day (mmscf/d) in the first year of operations rising to 44mmscf/d (7,300 barrels of oil a day equivalent) by the end of 2014.
The pipeline has a capacity of 60mmscf/d, which is anticipated to be of sufficient size for the Douala industrial market over the medium term, the company said.
