20 Feb 2019 07:00
20 February 2019
Eland Oil & Gas Plc ("Eland" or the "Company")
Capital Returns Policy and Notice of Results
Eland Oil & Gas PLC (AIM:ELA), an oil & gas production and development company operating in West Africa with an initial focus on Nigeria, is pleased to provide an update on its capital returns policy.
Capital Returns Policy
Further to the £3.0m share buyback announced in November 2018 and reflecting the significant progress the business has made, the Board is pleased to announce that in addition to the share buyback programme it intends to commence paying a dividend. In periods of particularly strong free cash flow generation, the Board will also look to supplement the ordinary dividend with additional returns to shareholders.
Dividend Policy
The Company plans to pay an ordinary dividend based on the Group's free cash flow generation, whilst ensuring an appropriate balance between investment in its business and operating within its debt and banking facility. It is expected that the maiden dividend will be declared for the year ended 31 December 2019 and it is expected to deliver a dividend yield of between 2.0% - 2.5% and will be payable semi-annually, split between the interim and final dividend (1/3:2/3).
Share Buyback Programme
Further to the RNS dated 19 November 2018, the Company announces that it intends to continue to undertake its previously announced share buyback programme for a maximum aggregate consideration of up to £3.0 million (the "Programme") during its close period. The Company's close period commences from the start of business on 20th February 2019 until the release of its Full Year results which is expected on or around 20th March 2019.
The Company has entered into an agreement with its broker Stifel Nicolaus Europe Limited ("Stifel") to manage an irrevocable, non-discretionary share buyback programme to repurchase on the Company's behalf, and within certain parameters, Ordinary Shares during the close period. Stifel will seek to purchase Ordinary Shares up to the value of £3 million (the "Maximum Amount"), having already purchased Ordinary Shares up to the value of £2.2 million under the Programme.
The Company and its directors have no power to invoke any changes to the Programme during the close period and they will be conducted at the sole discretion of Stifel.
The Programme will be executed in accordance with the Company's general authorities to make on market purchases which was approved by shareholders at the Company's AGM on 15 May 2018.
The maximum price paid per Ordinary Share shall be no more than 5 per cent above the average of the middle market quotation of the Company's shares for the five business days prior to the day the purchase is made.
The Company continues to intend to operate within the safe harbour provisions set out in the Market Abuse Regulation 596/2014 and Chapter 12 of the Listing Rules. Share repurchases will be undertaken until the earlier of the Maximum Amount being repurchased and the 2019 AGM of the Company. Any ordinary shares repurchased will be held as treasury shares in accordance with the provisions of the Companies Act 2006. The Company will continue to make further announcements in due course following the completion of any share repurchases.
Notice of results
The Company will announce its results for the financial year ended 31 December 2018 on or around 20 March 2019.
George Maxwell, CEO of Eland, commented:
"In light of our strong financial performance and record production growth in 2018, we are delighted to announce the introduction of an ordinary dividend within our capital returns policy. Our cash generative business ensures we are fully funded for future growth and will underpin our dividend going forward."
This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.
For further information:
Eland Oil & Gas PLC (+44 (0)1224 737300)
www.elandoilandgas.com
George Maxwell, CEO
Ronald Bain, CFO
Finlay Thomson, IR
Peel Hunt LLP, Nominated Adviser & Joint Broker (+44 (0)20 7418 8900)
Richard Crichton / David McKeown
Stifel Nicolaus Europe Limited, Joint Broker (+44 (0)20 7710 7600)
Callum Stewart / Nicholas Rhodes / Ashton Clanfield
Camarco (+44 (0) 203 757 4980)
Billy Clegg / Georgia Edmonds / Tom Huddart
Notes to editors:
Eland Oil & Gas is an AIM-listed independent oil and gas company focused on production and development in West Africa, particularly the highly prolific Niger Delta region of Nigeria.
Through its joint venture company Elcrest, Eland's core asset is a 45% interest in OML 40 which is in the Northwest Niger Delta approximately 75km northwest of Warri and has an area of 498km².
In addition, the Company has a 40% interest in the Ubima Field, onshore Niger Delta, in the northern part of Rivers State.
The OML 40 licence holds gross 2P reserves of 83.4 mmbbls, gross 2C contingent resources of 40.4 mmbbls and a best estimate of 254.5 mmbbls of gross un-risked prospective resources*
The Ubima field holds gross 2P reserves of 2.4 mmbbls of oil and gross 2C resource estimates of 31.1 mmbbl**
Net production figures relate to Elcrest Exploration and Production Nigeria Ltd ("Elcrest"), 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.
*Netherland, Sewell & Associates Inc CPR report 31 December 2017* *AGR TRACS April 2016