Eland remains confident in Nigerian workover plan

Eland Oil & Gas was confident in its 2016 workover plan on Tuesday, updating the market on its operations at OML40 in the Opuama field, Nigeria.

The AIM-traded production and development company said strong performance from the field continued through 2015, with production and uptime at record levels.

Following a workover of Opuama-1 in the fourth quarter, production from the field increased by more than 50% to 4,500 bopd, with Eland confirming it had remained at those levels since.

The firm said following that workover, it was now turning its attention to two further, low-capex workovers in the next two months.

"This involves intervention on both production strings [at Opuama-3], which we expect will increase gross production by a further 50% to 100%," said Eland CEO George Maxwell.

Maxwell said the company then sees the potential for re-entry, completion and production of Gbetiokun-1 well later in the year.

"The successful completion of these two workover projects are expected to increase production on OML 40 without using a drilling rig, and whilst the Opuama-5 production was disappointing, the anticipated incremental production gains from that well have been largely offset by the better than expected performance of Opuama-1," he added.

At the end of the 2015 year, Eland had more than $8m (£5.55m) available cash, having drawn only $15m of its $35m committed facility with Standard Chartered.

It was confident that its short-term focus on highly accretive workovers would ensure its capex requirements for 2016 remained modest.

"With further workovers planned, we have a number of options to continue these production increases prior to commencement of the development drilling campaign," Maxwell commented.

"Whilst we await formal ratification of operatorship of OML40, our ability to substantially boost production via workover operations is extremely encouraging," he added.