Eland Oil & Gas PLC, said it has completed a bank review that has confirmed it’s borrowing base at US$24 million.
The bank’s redetermination was based upon the production performance of the Opuama-1 and Opuama-3 wells, in addition to the group’s new shipping export route and the outlook for the field going forward.
Eland highlighted that the Opuama field is currently yielding 8,000 barrels of oil per day of production, from the Opuama-3 well only and the shipping operation is ongoing.
Some 120,000 barrels of crude have so far been shipped to the export terminal and a further 40,000 barrels are due to be injected imminently to deliver a further US$8.5 million in the coming weeks.
The company anticipates that the proposed side-track in the Opuama-7 well can add another 6,000 bopd of production, which will further support the group’s borrowing base.
Eland said the capital requirement for the growth project amounts to US$7million, just as the company confirmed it had a US$7.5 million cash balance.
George Maxwell, Eland chief executive, said: “The successful borrowing base review with our bank, Standard Chartered, ensures we are funded for our upcoming work programme at Opuama-7 which we expect to commence in the near term.
“We are targeting bringing Opuama field’s gross production from Opuama-1, 3 and 7 up to 17,500 barrels of oil a day by early mid 2017.
“There is real momentum in the business as we focus on growing our production sharply and I look forward to updating all stakeholders on our drilling activities at Opuama-7 in the future.”
“On a financial level, the company’s balance sheet remains robust with cash currently standing at US$7.5mln,” said Sam Wahab, Cantor Fitzgerald analyst.
“We continue to be encouraged by Eland’s continued operational progress against the backdrop of challenging civil conditions in Nigeria.”
Wahab highlighted that Eland is funded for the upcoming Opuama-7 programme which is expected to start in the near-term.