Yemisi Izuora
Eland Oil & Gas (LON:ELA) has anticipated a 50 percent increase in production and minimal downtime from its operation in Nigeria.
This is coming as the Opuama field begins to churn out a gross of 4,400 barrels of crude a day.
It follows a workover on the Opuama-1 well that means there is now production from four strings and two wells.
Opuama has been operating for 93 percent of the time between July and October.
“Having stabilised production and uptime on Opuama field earlier in the year, we placed renewed focused on low cost workover potential in the field,” said chief executive George Maxwell.
“It is most welcome that we are starting to see the production increase from this initiative.
“With further work planned, we have a number of options to continue these production increases prior to commencement of the drilling campaign.”
The CEO said the Nigeria National Petroleum Corporation (NNPC) has confirmed the position of Elcrest as lead operator of the licence area containing the Opuama wells, “pending the review and execution of a new joint operating agreement.
“We are actively working with NNPC to accelerate this process to complete as soon as possible and continue with the development drilling campaign,” he added.
Broker Cantor Fitzgerald, reiterating its ‘buy’ advice and 178p target price, said focusing on Opuama and Gbetiokun on the OML 40 licence area in Nigeria was a ‘sensible’ short-term strategy.
It reckons access to the petroleum profits tax holiday and “preferential cash flows” make the developments “worth considerably more than its working interests would suggest”.