24 Apr 2017 07:00
24 April 2017
Eland Oil & Gas PLC
("Eland" or the "Company")
Operational and Funding Update
Eland Oil & Gas PLC (AIM: ELA), an oil & gas development and exploration company operating in West Africa with an initial focus on Nigeria, is pleased to announce the following operational and funding update.
Opuama is currently producing approximately 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, approximately 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."
-ENDS-
For further information:
Eland Oil & Gas PLC (+44 (0)1224 737300)
www.elandoilandgas.com
George Maxwell, CEO
Olivier Serra, CFO
Finlay Thomson, IR
Canaccord Genuity Limited (+44 (0)20 7 523 8000)
Henry Fitzgerald O'Connor
Panmure Gordon (UK) Limited (+44 (0)20 7 886 2500)
Adam James / Atholl Tweedie
Tom Salvesen
Camarco (+44 (0) 203 757 4980)
Billy Clegg / Georgia Edmonds
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 OML 40 which is located 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 83.2 mmbbls, gross 2C contingent resources of 41.2 mmbbls and a best estimate of 254.5 mmbbls of gross unrisked prospective resources. The Ubima field holds gross 2P reserves of 2.4 mmbbl of oil and gross 2C resource estimates of 31.1 mmbbl.
Forward-looking statements
This report has been prepared to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The Statement should not be relied on by any other party or for any other purpose.
The report contains certain forward-looking statements. These statements are made by the directors in good faith based on the information available to them up to the time of their approval of this report but such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.