No one said it would be easy. But investors who gave Eland Oil & Gas (ELA) over £130m to put Shell's old Opuama oil field in Nigeria back into production must have hoped for a smoother ride than this.
In February, Eland finally restarted production after re-commissioning an ageing pipeline and re-opening two existing wells - nearly a year behind schedule. But no sooner had it done so, Shell was forced to shut down the oil-shipping terminal used by Eland, halting production. Then there were pipeline ruptures due to corrosion. Now, Eland's management say they've found an "illegal bunkering" point, which is currently being removed; they expect production to resume "in the very near term".
And in a surprise announcement alongside its financial results, Eland said it had agreed to acquire a 40 per cent interest in another onshore field in the Niger Delta. It must pay a signing bonus of $7m (£4m), as well as spend up to $125m to fully develop the field, in exchange for receiving 88 per cent of production cash flows until the capex is recovered. But Eland had just $21.6m in the bank as of early August.
Analysts at broker Davy forecast full-year pre-tax profits of $8m, giving EPS of 8.6¢, rising to $79m and 34.3¢ in 2015.
ELAND OIL & GAS (ELA) | ||||
---|---|---|---|---|
ORD PRICE: | 90p | MARKET VALUE: | £127m | |
TOUCH: | 90-91p | 12-MONTH HIGH: | 131p | LOW: 86p |
DIVIDEND YIELD: | nil | PE RATIO: | 75 | |
NET ASSET VALUE: | 165¢ | NET CASH: | $19.7m |
Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
---|---|---|---|---|
2013 (restated) | nil | -11.0 | 0.0 | nil |
2014 | 0.1 | -11.9 | 1.0 | nil |
% change | - | - | - | - |
£1=$1.67 |