Operations Update

26 October 2018

Eland Oil & Gas PLC

("Eland" or the "Company")

 Operations Update

Eland Oil & Gas PLC (AIM: ELA), an oil & gas production and development company operating in West Africa with an initial focus on Nigeria, is pleased to announce the following operations update.

Opuama

Drilling operations have been completed, with the Opuama-11 well being handed over to the Opuama field production team. The Company, through its joint-venture subsidiary Elcrest Exploration and Production Nigeria Ltd ("Elcrest") is now flow testing the well into the production facilities and on to export. The long string producing from the deepest of these reservoirs the D4000, flowed at 1,610 barrels of oil per day ("bopd") on a 24/64" choke with a flowing tubing head pressure ("FTHP") of 100bar (1450 psi) and the short string, producing from the D3500, flowed at 2,453 bopd on a 28/64" choke with a FTHP of 42 bar (609 psi). It is expected following completion of testing that stabilised initial production from Opuama-11 will be between 4,000 - 6,000 bopd (1,800 - 2,700 bopd net to Elcrest), in-line with previous guidance.

As previously announced, the Opuama-7 sidetrack well has experienced increased water-cut from the current D2000 completion. A production log was run in order to confirm water containment options ahead of a future planned re-completion on the D1000 reservoir, the well's primary target.

Aggregate production from the Opuama field is currently 26,325bopd (11,846 bopd net to Elcrest). Following completion of Opuama-11 testing, aggregate production from the Opuama field is expected to be approximately 30,000 bopd (13,500 bopd net to Elcrest).

Gbetiokun

Upon completion of Opuama-11 drilling operations, the OES Teamwork Rig mobilised to the Gbetiokun field where it will re-enter the Gbetiokun-1 well and drill the Gbetiokun-3 well as part of the initial phase of the field development.

The Gbetiokun field will be brought on stream through an early production system ("EPS"). The Gbetiokun EPS will receive production from the existing Gbetiokun-1 well, which will be completed to produce from the E2000 and E6000 reservoirs, as well as the planned Gbetiokun-3 infill well, which will produce from the D9000 and E7000 reservoirs. Initial production through the Gbetiokun EPS is estimated to be approximately 15,000 bopd.

The Gbetiokun field is located in the south-east of OML 40. It was discovered in 1987 and was appraised by three wells in 1990 and 1991. It is a simple, un-faulted, three-way dip closed structure and contains twenty oil-bearing reservoirs at depths between 5,000 and 10,000 feet.

The reserves certifier (NSAI) assesses gross reserves at 21.5 MMstb (1P) - 38 MMstb (2P) - 53.8 MMstb (3P).

Ubima

Workover operations on the Ubima-1 well have now been completed and the rig has been demobilised. Further to the RNS of 18 September 2018, in which the Company announced that the F7000 reservoir was tested at flow rates of up to 2,500 barrels of oil per day ("bopd") on a 24/60" choke, testing operations on the D1000 reservoir at 4,908 feet subsea have now been completed. During the test, sand production prohibited flow to surface, but an oil sample with about 15 API gravity was recovered. The Company will now evaluate options for the further appraisal and potential development of the D1000 sands.

A dual completion has been installed and a production test will be carried out on the E1000 / E2000 reservoirs to further assess volumes and productivity. Initial results from the production test are expected in the coming weeks and the Company will update the market once these results are evaluated.

George Maxwell, CEO of Eland, commented:

"We are pleased with what is expected to be another highly successful infill well on the Opuama field and we look forward to further record field production levels once testing has been completed. At current oil prices, these record levels of production from Opuama field are leading to significant cashflows for all of OML 40's stakeholders.

The prolific nature of OML 40 combined with the Company's experienced and resourceful team and supportive stakeholders means that we move development operations swiftly to the Gbetiokun field and the opportunity to increase production by a further 50% in the near-term.

Furthermore, the conversion of Ubima-1 into a producing well following the initial workover is a milestone for the Company and following the test of the E1000 and E2000 reservoirs we shall begin to evaluate monetisation opportunities for production from this well. Further evaluation of the D1000 sands are required to consider options for any full field development and we will update the market as we progress these studies.

We look forward to updating the market on the progress of both the Gbetiokun Early Production System and the evaluation of Ubima."

For further information:

Eland Oil & Gas PLC (+44 (0)1224 737300)

www.elandoilandgas.com

George Maxwell, CEO

Ronald Bain, CFO

Finlay Thomson, IR

Canaccord Genuity Limited (+44 (0)20 7523 8000)

Henry Fitzgerald O'Connor / James Asensio

Panmure Gordon (UK) Limited (+44 (0)20 7886 2500)

Adam James / Atholl Tweedie

James Stearns

Camarco (+44 (0) 203 757 4980)

Billy Clegg / Georgia Edmonds / Tom Huddart

 In accordance with the guidelines of the AIM Market of the London Stock Exchange, Yannis Korakakis, MSc of Leoben University, with 32 years of experience in the oil and gas sector, is a Petroleum Engineer and member of the Society of Petroleum Engineers who meets the criteria of qualified persons under the AIM guidance note for mining and oil and gas companies, has reviewed and approved the technical information contained in this announcement.

Notes to editors:

Eland Oil & Gas is an AIM-listed independent oil and gas company focused on production and development in West Africa, particularly the highly prolific Niger Delta region of Nigeria.

Through its joint venture company Elcrest, Eland's core asset is a 45% interest in OML 40 which is in the Northwest Niger Delta approximately 75km northwest of Warri and has an area of 498km². 

In addition, the Company has a 40% interest in the Ubima Field, onshore Niger Delta, in the northern part of Rivers State.

The OML 40 licence holds gross 2P reserves of 83.4 mmbbls, gross 2C contingent resources of 40.4 mmbbls and a best estimate of 254.5 mmbbls of gross un-risked prospective resources*

The Ubima field holds gross 2P reserves of 2.4 mmbbls of oil and gross 2C resource estimates of 31.1 mmbbl**

Net production figures relate to Elcrest Exploration and Production Nigeria Ltd ("Elcrest"), Eland's joint venture company. Production rates, when oil is exported via Forcados, are as measured at the Opuama PD meter, are subject to reconciliation and will differ from sales volumes.

*Netherland, Sewell & Associates Inc CPR report 31 December 2017

**AGR TRACS April 2016