Yemisi Izuora
Eland Oil and Gas which owns substantial production and exploration assets in Nigeria, is growing it production profile rising strongly through OML 40 ramp-up at Opuama and further developments in the country
They include Gbetiokun, also on OML licence, and Ubima, which was part of OML 17 in Rivers State.
The company’s Gross production might hit 45,000 barrels per day by end 2019, just as the firm posted first profit in 2018 and expects to pay a first dividend in 2019.
Eland las year, recorded the most active development period in history with seven wells drilled, re-entered and completed on the Opuama, Gbetiokun and Ubima fields.
Production for 2019 is anticipated at between 14,000 and 17,000 barrels per day (bopd) net to Eland’s joint venture Elcrest. Eland owns 45 per cent of Elcrest, with 55 per cent held by Starcrest Energy Nigeria
Elcrest has a 45 per cent stake in OML 40, located in the north-west Niger Delta.
A development well 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 per cent 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.
According to George Maxwell, chief executive officer of the company, “Our cash generative business ensures we are fully funded for future growth and will underpin our dividend going forward. Gbetiokun will also provide a step-change in production as we forecast over 6,700 bopd net to the company following commencement of the extended well test in Q1 2019.”
Four new development wells are slated for 2019 across the Opuama and Gbetiokun fields.
The second quarter will also see the group’s first ‘pure’ exploration well with a test of the Amobe prospect.
A best case estimate puts the potential resources here at 78mln barrels, with a 42 per cent chance of success.
After the end of 2018, two liftings were scheduled from Forcados Oil Terminal for January and February totalling 678,000 barrels of oil, which will provide a material boost to the company’s short-term cash position.
Eland ended 2018 with cash of US$42.6mln and a net debt position of US$4.7 mln.
In November, the company refinanced its existing reserve-based lending facility with a new 5-year RBL facility currently syndicated to US$75 million, with the ability to grow this to US$200m.
Eland anticipates a dividend yield of 2 to 2.5 per cent when it pays its first dividend.
A £3mln share buyback was announced in November, last year.
The OML 40 licence holds gross 2P reserves of 83.4 mmbbls (million barrels) and gross 2C contingent resources of 40.4 mmbbls.
The Ubima field holds gross 2P reserves of 2.4 mmbbls of oil and gross 2C resource estimates of 31.1 mmbbl.