16 Aug 2018 07:00
16 August 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, is pleased to announce that its joint-venture subsidiary Elcrest Exploration and Production Nigeria Ltd ("Elcrest"), has successfully completed the Opuama-10 well and will be handing over to the Opuama field production team imminently.
Under the regulatory guidelines the Opuama production team will conduct a Maximum Efficient Rate Test ("MER Test"), testing the well at increasing choke sizes, following which the Company will update the market further when full testing is complete, and production is stabilised. Initial production from Opuama-10 is expected to be in line with previous guidance, at between 4,000 and 6,000 barrels of oil per day ("bopd") (1,800 to 2,700 bopd net to Elcrest), with total production from Opuama field expected to be in the range of 28,000 to 30,000 bopd (12,600 to 13,500 bopd net to Elcrest).
As previously announced by the Company on 25 July 2018, Opuama-10 encountered six oil-bearing reservoirs with 307 feet apparent vertical thickness, with the Opuama-10 well completed on two of these reservoirs, namely D1000 and D5000. Following a review by the OML 40 Joint Venture between Elcrest and the Nigerian Petroleum Development Company Ltd ("NPDC"), a decision has been made to accelerate the drilling of the Opuama-11 well with the target of developing incremental reserves from the intermediate zones not targeted by Opuama-10.
Following handover of Opuama-10 to the production team, the JV will move the OES Teamwork rig to Opuama-11, where it is intended to develop the D3500, D4000 and D2000 reservoirs. The Opuama-10 well recorded net pay in these three reservoirs of 168 feet apparent vertical thickness. It is expected that initial gross production from Opuama-11 will be between 4,000 and 6,000 bopd (1,800 to 2,700 bopd net to Elcrest).
Following Opuama-11 and completion of regulatory approvals, the rig will be moved to the Gbetiokun field, where it will re-enter well Gbetiokun-1 and drill well Gbetiokun-3 as part of the initial phase of the field development plan. Dredging operations have already commenced and are currently 50% complete. Dredging will be completed in time for rig mobilisation to Gbetiokun.
George Maxwell, CEO of Eland, commented:
"We are delighted that the recent successful infill drilling on Opuama field has led to the confirmation of a further near-term production well. The successful delivery of Opuama-11 will not only advance us past our previous production target of 30,000 barrels of oil per day but will also maximise near-term cashflows.
The upside on OML 40 remains significant and together with Elcrest's partner NPDC we look forward to continuing the previously-announced work programme on the licence, including the Early Production System and Full Field Development of Gbetiokun field and exploration drilling of Amobe Prospect.
I look forward to positively updating the market on operations in due course."
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, Yannis Korakakis, MSc of Leoben University, with 32 years of experience in the oil and gas sector, is a Petroleum Engineer and member of the Society of Petroleum Engineers who meets the criteria of qualified persons 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 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