Eland upbeat despite ongoing issues at Opuama

Nigeria-focussed oil and gas production and development company Eland Oil & Gas updated the market on its operations at the Opuama field in licence OML 40 on Wednesday.

The AIM-traded firm said that, further to its announcement on 13 February, mechanical issues with the OES teamwork rig had continued intermittently.

It said the principal issue was a lack of consistent power from the rig's engines, and as a result the company - through its joint-venture subsidiary Elcrest Exploration and Production Nigeria - had paused drilling any further until backup engines arrived at the well site.

“We are finalising discussions for the supply of back-up engines with a number of suppliers and the back-up equipment is expected on site in April 2018,” the board said in its statement.

“Drilling has been suspended and completion and production from Opuama-9 is now expected also in April 2018 with Opuama 10 following immediately thereafter.”

Production performance from the Opuama field remained strong, the board said, with gross production from all four wells hitting record levels of 23,164 bbls of oil per day in March.

Opuama-9 and 10 wells were each expected to initially add a further 4,000-6,000 bopd of gross oil production each once brought online, underpinning Eland’s production target of reaching 30,000 bopd from Opuama during the first half of 2018.

Current total production from Opuama in 2018 stood at 1,421,292 barrels of oil, with 639,581 net to Elcrest.

Since the beginning of the year, Elcrest had lifted a total of 498,622 barrels of crude from Forcados terminal for a value of $33.42m, reflecting an average realised price of $67.00 per barrel.

Elcrest had a further parcel of 100,000 barrels programmed to be lifted and sold in the next 10 days.

“Although any delay is frustrating it is not unexpected during a multi-well drilling campaign,” said Eland CEO George Maxwell.

“I am very pleased with how our team and our partners have responded to the challenge and it should not mask the success of our ongoing drilling campaign which has increased gross production from 12,000 bopd to a record 23,164 boepd in under six months.

“Through our increasing lifting volumes, all our stakeholders are starting to see the positive financial effects of our successful drilling campaign and resulting significant ramp-up in production.”