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Eland Oil in 'excellent shape' as production trebles

Last updated: 15:38 31 May 2016 BST, First published: 08:38 31 May 2016 BST

Picture of workers at an oil pipe valve
Eland is in a rapid expansion phase

Eland Oil & Gas PLC (LON:ELA) posted sharply higher revenues as production from its acreage in Nigeria climbed almost three-fold in 2015.

The oiler pumped 341,000 bbls of crude oil in 2015, up 195% on 2014, aided by a workover of the Opuama-1 well in November.

That workover led to a 50% increase in gross production from the OML 40 field and a year-end production rate of 4,400 bopd.

Eland hopes to double production in 2016 to 7,800-10,000 bopd net, driven by new wells Gbetiokun-1 and Ubima-1.

Gross reserves at the OML 40 field are 83.2mln barrels at 50% probability (2P).

Eland recently raised US$18.5mln from investors and has a cash position currently of US$25mln.

Revenues in 2015 were US$18.1mln (US$11.7mln) with a loss after tax of US$6.8mln (US$16.3mln). 

George Maxwell, chief executive, said Eland was in excellent shape.

“With the recently announced success of the Opuama-3 work-over in OML 40, which delivered exceptional flow-rates of over 10,500 bopd, we believe that Eland is well positioned to benefit from its strong asset base and fully funded work programme throughout 2016, which should lead to further material gains in production once the Forcados terminal reopens."

Cantor Fitgerald has a price target of 149p and says the oil group should hit its previously set targets.

Some US$15m of a Reserve Based Lending facility with Standard Chartered had been drawn down by 31 December 2015, it added

The available facility is currently capped at US$25.4m and will be re-determined on 30 June 2016.

Shares eased 1% to 30.7p.

-adds broker line, share price --

 

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