Nigerian reserves coming on stream for Eland Oil & Gas
ELAND Oil & Gas has narrowed losses by nearly $10 million in a year that saw it commence production in onshore Nigeria and boost its technical support team in Aberdeen.
West Af r ica-focused Eland, whose core asset is the OML 40 licence in the Niger Delta, posted a loss of $16.3m in the year ended December 31, down from $26.1m in 2013. It came as Eland sold 115,722 barrels of crude oil, generating revenue of $11.7m, after starting production with the re-opening of two wells in the Opuama field.
Elcrest Exploration and Production Nigeria, its joint venture company, completed the loading and sale of a further 95,290 barrels in the four months to April 30.
The joint venture has achieved a 90 per cent uptime of facilities and pipeline so far this year, against only 6.2 per cent in the first six months of last year.
Having secured Pioneer Tax Status for OML 40, which means the company will be exempt from paying petroleum profits tax for an initial three years, Eland said it has a strong incentive to accelerate production in the licence. The concession is expected to result in a significant increase in cash flow.
The company, meanwhile, strengthened its position in the Niger Delta by acquiring a 40 per cent stake in the Ubima Field in August.
The licence area, which spans nearly 65 square kilometres onshore in the northern part of Rivers State was carved out of the OML 17 licence operated by the Shell Petroleum Development Company.
Eland, which is acting as the technical and financial partner in the Ubima interest, said resource estimates signal the field contains 33.9 million barrels.
The company struck a reser ves-based lending facility worth up to $75m with Standard Chartered to fund the development of the OML licence, $35m of which has been committed.
George Maxwell succeeded Les Blair as chief executive of Eland, with John Downing coming in as chief technical officer.
The company hired four technical staff in Aberdeen over the period, while a further two relocated to the city. It intends to add a further one or two staff to the team this summer.
Nigeria’s Department of Petroleum Resources told Elcrest it has fulfilled its obligations to operate OML 40 for at least10 years.
Shares in Eland Oil & Gas closed down 0.5p at 78p.