Eland oil & gas raises N29.5b to buy OML 40 in Nigeria
….Targets 50,000 bop per day in four years
By Joseph BAMIDELE
LAGOS-Scottish firm, Eland Oil and Gas has successfully raised N29.5 billion (118 billion Pounds) to buy a holding in Oil Mining Lease, OML 40 licence in Nigeria after been listed in the Alternative Investment Market, AIM three years after the Company was f
OML 40 covers some 500 square kilometres and is located onshore in the Niger Delta and contains light ‘sweet’ oil. Since 1964, 18 wells have been drilled there, with 15 finding hydrocarbons. One field, Opuama, was formerly in production for over 30 years, from 1975 to 2006.
Eland plans to target production from existing wells at Opuama that will be restarted at an expected initial gross rate of at least 2,500 barrels of oil per day (bopd) in the next six months.
In late 2013, the company also plans to explore two wells, targeting 113 million barrels per day. Within four years, it is hoped total gross production will rise to 50,000bopd, while Eland will also seek to acquire and develop underexploited upstream assets in Nigeria.
“OML is an asset with production and exploration potential and with independently certified gross recoverable 2P Reserves of 71.5 million barrels, 3P Reserves of 117 million barrels in the Opuama and Gbetiokun Fields and Mean Contingent Resources of a further 16.7 million barrels in the Abiala and Ugbo Fields,” an official of the company said.
Expressing his gratitude to the company’s shareholders, Les Blair, CEO of Eland Oil & Gas, said “I am extremely grateful to the shareholders of the Company who have supported us to complete this milestone transaction. The fundraising of £118 million is the largest on an AIM IPO for over three years and highlights the exciting prospects for OML 40 and Nigeria as a whole.”
The stake in OML 40 was previously held by Royal Dutch Shell, Total and Eni. Shell owned 30 per cent stake in the joint venture for OML 40 along with Nigerian National Petroleum Corporation, NNPC with 55 per cent while Total E&P Nigeria held 10 per cent and Agip Oil 5 per cent.
The Federal Government and the Nigerian National Petroleum Corporation, NNPC granted all relevant approvals for the sale including 45 per cent interest to the buyers.
Shell sold 30 per cent interest of OML 40 to Elcrest Exploration and Production Nigeria (EEPN) for $102m.
EEPN is a consortium of Starcrest Nigeria Energy and Eland Oil and Gas.
With the purchase, Eland will own an initial 20.25%, with 24.75% held by its Nigerian joint venture partner. The remaining 55% is held by the Nigerian government.
Commenting on the rationale behind the sale, SPDC Nigeria Country Chairman Mutiu Sunmonu said divestment is part of the company’s strategy to refocus its asset portfolio.
“SPDC is positioned well for investment and growth opportunities in all areas, including domestic gas, which will be delivered with the support of our government, partners and the people of Nigeria” Sunmonu added.