27th May 2014 11:43
LONDON (Alliance News) - Eland Oil & Gas PLC Tuesday said its pretax loss widened in 2013 as lower administrative expenses were offset by a significant jump in operating expenses related to the development of its OML 40 licence, onshore Nigeria.
The oil and gas development and exploration company operating in West Africa is yet to produce any revenues and said its pretax loss widened to USD25.8 million in 2013 from USD14.2 million in 2012.
Eland said its administrative expenses fell 4.6% to USD8.4 million from USD8.7 million, due to lower consulting costs during the period. However, its other operating expenses increased significantly to USD16.5 million from USD4.3 million, as costs in Nigeria, including technical studies and in-country resource reviews, hit the company.
The company is focused on the development of the OML 40 licence, where it restarted production from the larger Opuama field in February 2014.
Eland said it had hoped to restarted production from the field in the first half of 2013 but had to reforecast the project on a number of occasions and change its production plan to comply with its available funding during the period.
Despite this, the company did manage to return to production in February, and its latest production period saw oil production rise and stabilise to an average rate of 3,500 barrels of oil per day. However, the project then was hit by a subsea leak at Royal Dutch Shell PLC's Forcados Terminal in early March, meaning that production from the Opuama field was suspended for most of March and April.
Eland Oil & Gas said the field is currently suspended while a leak is repaired but that it expects to restart production in the next week.
The company said that it is planning a seven well development drilling programme in the field and expects its year-end gross production exit rate from the OML 40 site to be roughly 7,000 barrels of oil per day.
It added that it had cash and cash equivalents of USD22.8 million in April this year, and that during 2014, it will seek to enter a reserve-based lending facility and increase the debt level above its current USD22 million level.
Eland Oil & Gas shares were down 0.1% to 119.83 pence on Tuesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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