11th Mar 2015 09:44
LONDON (Alliance News) - Eland Oil and Gas PLC Wednesday said production from the Opuama field in Nigeria is of a "very high consistency", and said it will conduct a mixture of development drilling and well workovers in 2015 which could significantly increase production.
The oil and gas company said current average gross production from the Opuama field onshore Nigeria is 3,100 barrels of oil per day, of which 1,395 barrels per day are net to Eland.
Eland holds a 45% interest in the Opuama field through its joint venture company Elcrest Exploration and Production Nigeria Ltd.
In the fourth quarter of 2014, Eland said net deliveries via the export pipeline at the field totalled 225,000 barrels of oil, with 101,250 barrels being net to the company.
In January and February, Eland said 36,290 barrels gross of oil was loaded and sold at an average price of USD63.35 per barrel through three oil liftings from the Forcados Terminal. Since the beginning of March, Eland said a further 23,000 barrels was lifted with an additional 36,000 barrels scheduled to be lifted in April.
Average uptime of facilities and the pipeline at the Opuama field averaged 73.8% during the fourth quarter of 2014. So far in the first quarter of 2015, the company said uptime on the Opuama field is over 85%, impacted by planned maintenance work carried out in January.
Cumulative gross production to date in 2015 from the Opuama field is in excess of 175,000 barrels of oil, of which 78,750 barrels have been attributable to Eland.
"We are incredibly pleased that we have begun this year so strongly, with very high consistency of production from Opuama. Our operational focus has given us this success and provides a consistent revenue stream and the basis for the company to deliver its 2015 work programme," said Chief Executive George Maxwell.
Eland also said it has met all the conditions to secure the committed USD35 million of the USD75 million reserve based lending facility with Standard Chartered Bank, which will be registering its security over the coming days, said the company.
The remaining USD40 million of the facility is expected to be secured before the end of April, which will coincide with Eland's planned drilling programme in the third quarter.
Eland is planning on re-entering and completing workovers of wells, with the first re-entry being completed on the OPUA-005 well in the second quarter, which is currently shut-in. Eland is expecting the well to produce between 400 to 600 barrels of oil per day once completed, producing a total of between 1.1 million to 1.3 million barrels.
"The planned work programme, with the mixture of re-entry and new development wells, will result in 2015 being a transformational year for Eland with material increases in production and revenues," said Maxwell.
Eland will also re-enter the OPUA-007 well, which also is shut-in, but the well will need to be side-tracked and won't be completed until the third quarter when the company begins development drilling on the Opuama field.
The development drilling programme in the third quarter will consist of seven wells with follow on drilling expected throughout 2016. Of these seven, two wells will be drilled in the third and fourth quarters of 2015.
The first two wells will produce between 4,500 to 5,500 barrels of oil per day combined, and Eland said they are "commercially viable" at USD50 per barrel.
At the start of March, the company reported a cash balance of USD8.2 million, with planned receipts totalling USD2.4 million for settlement of oil cargoes, which are due before the end of March, it said.
Eland shares were up 1.1% to 47.50 pence per share on Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
Eland Oil & Gas