4 Jul 2018 07:00
4 July 2018
Eland Oil & Gas PLC
("Eland" or the "Company")
Opuama Field Operations Update
Eland Oil & Gas PLC (AIM: ELA), an oil & gas production and development company operating in West Africa with an initial focus on Nigeria, announces the following update on the Opuama field in licence OML 40.
Opuama-9
The Opuama 9 well was completed and on production on 21 of June 2018. The well, a dual completion, with the short string producing from the D1000 reservoir and the long string from the D2000 reservoir, is presently being tested on variable chokes to determine the optimum production rate. As an indicative interim production result from the MER test, the short string is being produced on a 36/40" choke at 3,200 barrels of oil per day ("bopd") and the long string on a 40/64" choke at 3,800 bopd. It is encouraging that the combined total of 7,000 bopd (3,150 bopd net to Elcrest) is beyond the upper end of our previous gross guidance of 4,000 - 6,000 bopd (1,800 - 2,700 bopd net to Elcrest).
Opuama-10
Following completion of the Opuama-9 well the OES Teamwork Rig moved to and spudded the Opuama-10 well. The well is currently at a depth of 3,599 feet, where the 13 3/8" casing has been run and cemented. The rig will now drill the 12 ¼" hole to a measured depth of 10,200 feet, with primary targets in the D1000 and D5000 reservoirs and secondary targets in the D3500 and D4000 reservoirs. Initial gross production is expected to be between 4,000 and 6,000bopd (1,800 - 2,700 bopd net to Elcrest).
Opuama Field Production
The Opuama field is currently producing at approximately 25,000 bopd (11,250 net to Elcrest), an all-time record for OML 40. This includes both strings of production from Opuama-9 which has just been brought onstream at higher levels than anticipated. We have seen an increased water-cut from Opuama-7 and hence we are taking remedial action to rectify this. A re-entry of Opuama-7 is expected to take place during the coming month. Production is still expected to be in excess of 30,000 bopd (13,500 bopd net to Elcrest) from Opuama upon completion of the Opuama-10 well.
George Maxwell, CEO of Eland, commented:
"The completion of Opuama-9, delivering production significantly above our original forecast, contributes to the continued success of the current drilling campaign. OML 40 has achieved a new record production of 25,000 bopd, and upon successful completion of Opuama-10 we are well within reach of our stated target of delivering 30,000 bopd from Opuama.
We look confidently towards the second half of 2018 with, amongst other things, further infill drilling to increase production on OML 40, the refinancing and upscaling of our current debt line and the high impact appraisal of the Ubima marginal field."
For further information:
Eland Oil & Gas PLC (+44 (0)1224 737300)
www.elandoilandgas.com
George Maxwell, CEO
Ronald Bain, CFO
Finlay Thomson, IR
Canaccord Genuity Limited (+44 (0)20 7523 8000)
Henry Fitzgerald O'Connor / James Asensio
Panmure Gordon (UK) Limited (+44 (0)20 7886 2500)
Adam James / Atholl Tweedie
James Stearns
Camarco (+44 (0) 203 757 4980)
Billy Clegg / Georgia Edmonds / Tom Huddart
In accordance with the guidelines of the AIM Market of the London Stock Exchange, Pieter van der Groen, a geologist and Eland's Chief Operating Officer, who has a geology degree from Auckland University, a Masters degree in Petroleum Geology from the University of Aberdeen and has over 25 years of relevant experience in the upstream oil and gas industry and who is a member of the Society of Petroleum Engineers and meets the criteria of qualified person under the AIM guidance note for mining and oil and gas companies, has reviewed and approved the technical information contained in this announcement.
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 unrisked 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