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 (¢)|