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Eland Oil & Gas announces operational update and 2019 guidance

Gasoil News - Published on Thu, 17 Jan 2019

Image Source: Oriental News Nigeria
Eland Oil & Gas PLC, an oil & gas production and development company operating in West Africa with an initial focus on Nigeria, has provided an update on operations and guidance for 2019. George Maxwell, CEO of Eland, said "2018 was an exceptional operational year for Eland, with net production increasing some 60% from the start of the year to over 13,000 bopd by the year end, a record for the Company and for the OML 40 licence. Moreover, the Ubima field tested at combined rates of up to 1,400 bopd net to Eland and this is expected to enter commercial production in H1 2019. 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. This performance is a testament to the commitment of our exceptional staff and in-country partners, and I look forward to further operational success throughout 2019, which is shaping up to be a very busy period for the Company. The sharply higher production rates throughout 2018 have led to a strengthening of our financial position and we commence this year with a largely unused new debt facility and a strongly cash generative business, ensuring we are fully-funded for the next phase of growth."

Highlights

Average production in 2018 was 8,000 barrels of oil per day net to Elcrest, more than doubling the 2017 average production of 3,934 bopd

2018 exit production rate of 13,240 bopd net to Elcrest (29,425 bopd gross), a record production rate for OML 40 and Eland. Peak record production of 13,986 bopd net to Elcrest (31,081 bopd gross)

Ubima field tested at combined rates of up to 1,400 bopd net to Eland (3,500 bopd gross), with commercial production commencing soon

The most active development period in the Company's history with seven wells drilled, re-entered and completed on the Opuama, Gbetiokun and Ubima fields

Successfully refinanced existing reserve-based lending facility ("RBL") with the potential to increase to US$200 million (subject to production growth and reserves). Borrowing Base at $103m and currently $75m fully syndicated

Year-end unaudited cash position of $42.6 million and net debt position of $4.7 million

Post year-end 2018 the Company, via its operating entity Elcrest, has received $20 million from NPDC for its share of drilling costs for OP8 and OP9

Outlook

2019 production is expected to average in the range of 14,000 to 17,000 bopd net to Elcrest (post 15% budgeted downtime)

2019 capex guidance of $80 - 90 million net to Elcrest

2019 active development work programme targeting four new wells across Opuama and Gbetiokun

Amobe exploration prospect, the Company's first pure exploration well, expected to spud at the end of Q2 2019, targeting best case gross resources of 78 million stock tank barrels1 ("MMstb"), with a 42% probability of success ("PoS")

Commercial production from the Ubima field expected in H1 2019

Post-period end two liftings are scheduled from the Forcados Oil Terminal for January and February totalling 678,000 barrels of oil

Source :

Posted By : Joykumar Irom on Thu, 17 Jan 2019
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