14 June 2018
Eland Oil & Gas PLC
("Eland" or the "Company")
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 that its joint-venture subsidiary Elcrest Exploration and Production Nigeria Ltd ("Elcrest") has successfully drilled and completed the Opuama-9 well. The production tree is currently being installed and Opuama-9 well is expected to be handed over to the Opuama field production team in the coming week. The well will then flow test into the production facilities and on to export.
Under the regulatory guidelines, the Opuama production team will conduct a Maximum Efficient Rate Test ("MER Test") incrementally testing the well at increasing choke sizes. It is expected that, following completion of the MER Test, initial gross production from Opuama-9 will be at the upper end of our guidance of between 4,000 and 6,000 barrels of oil per day ("bopd") (1,800 - 2,700 bopd net to Elcrest). On completion of the MER test the Company will announce the initial production rates.
Furthermore, following the successful completion of Opuama-9 infill well, the OES Teamwork Rig will mobilise to the Opuama-10 drill site with spudding expected in June. Initial gross production is expected to be between 4,000 and 6,000bopd (1,800 - 2,700 bopd net to Elcrest).
George Maxwell, CEO of Eland, commented:
"OP9 has been a challenging well but we are extremely pleased that production is likely to be at the high side of our estimate and simple well payback at current oil prices still predicted to be sub 90 days. We will soon move to and spud OP10 and look forward to a successful drilling program"
For further information:
Eland Oil & Gas PLC (+44 (0)1224 737300)
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
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, Pieter van der Groen, a geologist and Eland's Chief Operating Officer, who has a geology degree from Auckland University, a Masters degree in Petroleum Geology from the University of Aberdeen and has over 25 years of relevant experience in the upstream oil and gas industry and who is a member of the Society of Petroleum Engineers and meets the criteria of qualified person 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 unrisked 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
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
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