21 Mar 2018 07:00
21 March 2018
Eland Oil & Gas PLC
("Eland" or the "Company")
Opuama 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 operations update on the Opuama field in licence OML 40.
Further to the Company's announcement on 13 February 2018, mechanical issues with the OES Teamwork Rig have continued intermittently. The principal issue has been a lack of consistent power from the rig's engines and consequently the Company, through its joint-venture subsidiary Elcrest Exploration and Production Nigeria Ltd ("Elcrest"), has paused drilling any further until back-up engines arrive at the well site. We are finalising discussions for the supply of back-up engines with a number of suppliers and the back-up equipment is expected on site in April 2018. Drilling has been suspended and completion and production from Opuama-9 is now expected also in April 2018 with Opuama 10 following immediately thereafter.
Production performance from Opuama field remains strong, with gross production from all four wells hitting record levels of 23,164 bbls of oil per day (bopd) in March 2018. Opuama-9 and -10 wells are each expected to initially add a further 4,000 - 6,000 bopd of gross oil production each once brought online, underpinning our production target of reaching 30,000 bopd from Opuama during H1 2018.
Current total production from Opuama in 2018 stands at 1,421,292 barrels of oil (Net to Elcrest: 639,581). Since the beginning of the year Elcrest has lifted a total of 498,622 barrels of crude from Forcados terminal for a value of $33,409,195. Reflecting an average realised price of $67.00 per barrel. Elcrest has a further parcel of 100,000 barrels programmed to be lifted and sold in the next 10 days.
George Maxwell, CEO of Eland, commented:
"Although any delay is frustrating it is not unexpected during a multi-well drilling campaign. I am very pleased with how our team and our partners have responded to the challenge and it should not mask the success of our ongoing drilling campaign which has increased gross production from 12,000 bopd to a record 23,164 boepd in under six months.
Through our increasing lifting volumes, all our stakeholders are starting to see the positive financial effects of our successful drilling campaign and resulting significant ramp-up in production."
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
Tom Salvesen
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 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 83.2 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 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 June 2015
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.