Nigeria: Eland Oil & Gas provides update on Nigeria operations
24 Jul 2017
AIM-listed Eland Oil & Gas has provided an operational update for the six months ended 30 June 2017.
Highlights
Production of oil from OML 40 recommenced in January 2017, with the oil being exported by ship to a floating storage vessel (FPSO) located offshore. Export by ship continued until 24 May when export by pipeline to the Forcados oil terminal resumed. The option remains to resume export by ship should interruption to export via Forcados reoccur.
Since export via Forcados resumed, there have been over 56 days of production, at an average rate for producing days of over 11,400 barrels of oil per day (bopd) gross (5,130 bopd net *), the highest level of production since 1977 on OML 40. More than 600,000 barrels of oil were produced in this period into the Facardos terminal since 24 May, with only 5.3% downtime for maintenance during this time.
Total gross production from OML 40 in the first six months of 2017 was 954,728 barrels of crude oil 429,627 bbls net*). Average production in the Period was 5,275 bopd gross (2,374 bopd net*). Average production for producing days during the Period was 9,454 bopd gross (4,254 bopd net*)
Strong unaudited cash position of $22.35 million at 30 June 2017
Successful equity raise of $19.5 million in June 2017
A total of 225,000 barrels of crude lifted from Forcados terminal since export via this route resumed, with funds of approximately $9.9million expected to be received in the coming week.
Reserves Based Loan (RBL) facility with Standard Chartered Bank remains unchanged at $23.9 million at the Period end, with only $15million currently drawn.
Updated Competent Persons Report (CPR) for four wells in OML 40 in June 2017 trebled the estimate of gross 2P reserves that will be produced by these wells to 33 MMstb oil.
Fully funded near-term work programme commencing with the sidetrack of existing well Opuama-7 in August which is forecast to increase gross production by 5,900 bopd (2,655 bopd net*), increasing near term production from OML 40 to about 17,500 bopd gross (7,875 bopd net*).
George Maxwell, CEO of Eland, commented:
'I am pleased to report that the first six months of 2017 have been incredibly successful and busy period for the Company with record high production levels achieved, an oversubscribed placing raising $19.5million and the creation of diversification of our export routes.
'As we enter the second half of 2017, we are fully funded for the drilling of Opuama-7 and the additional well we have the option for under the rig contract, with Opuama-7 alone due to increase current production by 50% this quarter. We intend to use the resulting increase in cashflows to fund the further development of our asset base in the Niger Delta and I am hugely excited by the momentum currently being created within the business.'
* Net production figures relate to Elcrest Exploration and Production Nigeria, Eland's joint venture company. Production rates, when oil is exported via Forcados, are as measured at the Opuama PD meter, are subject to reconciliation and will differ from sales volumes.
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Source: Elan7d Oil & Gas
