13 Jun 2017 07:00
13 June 2017
Eland Oil & Gas PLC
("Eland" or the "Company")
Rig contract signed for the drilling of Opuama-7 sidetrack
Eland Oil & Gas PLC (AIM: ELA), an oil and gas production and development company operating in West Africa with an initial focus on Nigeria, is pleased to announce that its joint venture company, Elcrest Exploration and Production Nigeria Ltd ("Elcrest") has signed a rig contract with OES Energy Services Limited ("OES"), for the OES Teamwork Rig for the upcoming sidetrack of Opuama-7.
The side-tracking of the existing Opuama-7 well is expected to contribute an initial production rates of 5,900* barrels of oil per day ("bopd") gross, increasing near term overall production from OML 40 to around an expected 17,500 bopd gross. The OES Teamwork swamp rig is currently undergoing meticulous preparation, which includes mobilising rig personnel, system tests and equipment shake down, to target the commencement of the rig move to Opuama-7 location in July 2017. The rig will drill a sidetrack to around 7,500 ft, expected to take in the region of a month to complete. As part of the contract's terms, Elcrest has the option to extend the contract for the re-entry of Gbetiokun-1, which it intends to start immediately after Opuama-7 sidetrack.
George Maxwell, CEO of Eland, commented:
"Following the successful completion of our oversubscribed placing last week, I am delighted to announce the signing of a rig contract with OES to accelerate the commencement of our workover programme, starting with the side-track drilling of Opuama-7.
We are committed to developing OML 40 to its full potential and have immediately started to deploy the additional funds recently raised. We continue to target production from OP-7 and Gb-1 in H2 2017, targeting total gross production from OML40 of 25,400bopd (net: 11,430 bopd). This is double our current levels of production and should bring significant value to all our stakeholders."
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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 / James Asensio
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.
* Figure taken from the Netherland, Sewell & Associates Inc CPR report 31 March 2017
Oil production rates are as measured at the Opuama PD meter. Rates stated are subject to reconciliation and will differ from sales volumes.