We are pleased to have successfully completed the remedial work on Gbetiokun-3 and are very happy with the achieved flow-rates of almost 7,000 bopd.
George Maxwell, chief executive
How it is going
Eland owns 45% of Elcrest, with 55% held by Starcrest Energy Nigeria
Elcrest has a 45% stake in OML 40, located in the north-west Niger Delta.
A development programme is set to get underway at Gbetiokun comprising two wells that can add a further 15,000 barrels per day gross.
Eland also has a 40% interest in the Ubima field, located onshore Niger Delta just north of Port Harcourt.
Ubima has tested at 3,500 bopd gross or 1,400 net to Eland.
What the brokers say
Peel Hunt: “Expectations for a combined gross initial production rate on start-up during 1Q 2019 from Gbetiokun-1 and 3 stand at 15,000bbl/d, which would take overall gross production to c45,000bbl/d.
The broker has a ‘buy’ rating and 160p target price on Eland O&G shares.
SP Angel: “2019 will be a year of consolidation as the company sets the foundations for what we believe will be further growth in 2020.”
Four new development wells are slated for 2019 across the Opuama and Gbetiokun fields.
Gbetiokun-1 performance already established at over 5,000 bopd.
Gbetiokun-3 achieved flow rates of 7,000 bopd in recent flow test.
Eland anticipates a dividend yield of 2 to 2.5% when it pays its first dividend..
2019 capex guidance of US$80 - 90mln net to Elcrest
Eland ended 2018 with cash of US$42.6mln and a net debt position of US$4.7 mln.
The OML 40 licence holds gross 2P reserves of 82.2 mmbbls (million barrels) and gross 2C contingent resources of 50.7 mmbbls.
Ubima holds gross 2P reserves of 9.3 mmbbls of oil and gross 2C resource estimates of 4.2 mmbbl.
Both prospects offer substantial upside from further exploration and development.
At 121p, Eland is valued at £261mln.