It may have taken a year longer than anticipated, but in February Eland Oil & Gas (ELA) finally began production at its Opuama oil field, onshore Nigeria. After repairing infrastructure and re-commissioning two wells that had been drilled and abandoned by Shell, black gold started flowing once again across the OML 40 licence at a rate of over 3,500 barrels per day (bopd).
Unfortunately, a leak at Shell's Forcados export terminal forced Eland to shut in production for most of March and early April. The terminal eventually recommenced operations only for "a number of teething issues", including a minor pipeline leak at Opuama, to necessitate further shutdowns of between one and three weeks to carry out repairs.
No doubt, Eland's management hopes that things will run more smoothly from here on. Indeed, the company plans to drill seven wells on Opuama by end-2015 and aims to produce 7,000 bopd by the end of this year. To pay for drilling, Eland raised £20m last month from two major shareholders through the exercise of options. It also has $22m (£13m) of undrawn credit facilities.
ELAND OIL & GAS (ELA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 117p | MARKET VALUE: | £165m | |
| TOUCH: | 116-117p | 12-MONTH HIGH: | 133p | LOW: 87p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 139¢ | NET CASH: | $3.8m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2011 | nil | -17.7 | -307 | nil |
| 2012* | nil | -14.2 | -12 | nil |
| 2013 | nil | -25.8 | -1 | nil |
| % change | - | - | - | - |
*Restated £1=$1.68 | ||||
