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UPDATE - Victoria Oil & Gas swings to a profit

Last updated: 21:42 28 Feb 2014 AEDT, First published: 22:42 28 Feb 2014 AEDT

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--ADDS BROKER COMMENT--

AIM-quoted Victoria Oil & Gas (LON:VOG) swung to a half-year profit, having registered a US$5mln loss last year.

The Cameroon-focused gas group saw revenues of US$6mln in the six months to November 30, 2013, compared with US$1.7mln in the same period the year before.

Gas sales totalled US$5.4mln at US$16 per million British thermal units, against US$1.5mln last year.

Profit before tax came in at US$2.5mln, but stripping out the fee received as part of the court case with RSM Production, Victoria recorded a loss of US$2.6mln, which is still less than the deficit the year before.

Shares in Victoria surged in January after it agreed a settlement with RSM that injected US$16.3mln into the business and put all attention back on the continued commercialisation of the Logbaba gas project in Cameroon.

RSM won an arbitration case for a 40% stake in the project, though it had defaulted on a US$26mln cash call for its share of costs from work carried out in 2013.

The company said: “Our financial strategy continues to be to develop the Logbaba asset, financed by a mixture of debt and equity, into a significant cash-generating asset in order to support future growth of the group.

VOG appears to have stabilised and has started moving forwards again, according to broker SP Angel.

“The positive news is that VOG's Cameroonian subsidiary, Gaz du Cameroun (GdC) has started to break even, and all signs are that thermal volumes (the first sales segment in GdC's roll-out), are again growing,” the broker said in a note.

“While there are still a number of elements that need to be brought in to place before the company's interest in Logbaba can start to be fully and effectively valorised, we believe that this news is the first solid step forwards in achieving that.”

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