Africa Oil & Gas: Eland Oil & Gas announces Nigeria operational and funding update

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AIM-listed Eland Oil & Gas, an oil & gas development and exploration company operating in West Africa with an initial focus on Nigeria, has announced an operational and funding update.

Opuama is currently producing approx. 8,000 barrels of oil per day (‘BOPD’), from the Opuama-3 well only, with export through shipping ongoing. Since the Company’s last announcement, approx. 120,000 barrels of oil have been delivered to the export terminal, with a further circa 40,000 to be injected imminently. Monetisation of this crude is expected to be in the region of $8.5million in the coming weeks.

The previously announced borrowing base review of the Company’s Reserves Based Lending facility is complete and has resulted in a borrowing base amount confirmed at $24million. The redetermination was based on the production performance of Opuama-1 and Opuama-3, shipping export route and outlook.

The Company expects to commence the side-track of Opuama-7 well by the end of H1 2017.  Approximately a further $7million of capex is required for the completion of the Opuama-7 side-track, which is expected to add a further 6,000 gross barrels of production from OML 40. Following the successful side-track of Opuama-7, the Company will look to include this significant increase in production in its borrowing base and expects the headroom to increase accordingly to allow for further development funding for OML 40.

The Company has a current cash balance of $7.5million of which, pursuant to the borrowing base redetermination, $0.8million is restricted to cover debt service.

George Maxwell, CEO of Eland, commented:

‘The successful borrowing base review with our bank, Standard Chartered, ensures we are funded for our upcoming work programme at Opuama-7 which we expect to commence in the near term. Weare targeting bringing Opuama field’s gross production from Opuama-1, 3 and 7 up to 17,500 barrels of oil a day by early H2 2017.

‘There is real momentum in the business as we focus on growing our production sharply and I look forward to updating all stakeholders on our drilling activities at Opuama-7 in the future.’

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Source: Eland Oil & Gas

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