16 December 2014, Lagos – West Africa-focused Scottish Firm, Eland, an oil and gas production, development and exploration company with a principal focus on Nigeria, has stated that it has satisfied all the conditions precedent to access its $22 million loan facility with Standard Chartered Bank.
The company said in a statement that drawdown of the loan facility is now available to the company to allow Elcrest Exploration and Production Nigeria Limited, Eland’s joint venture company, to continue to develop Oil Mining Lease (OML) 40.
The Chief Executive Officer of Eland Oil and Gas, Mr. George Maxwell, noted that entering the debt phase of financing is a key milestone for both Eland and its shareholders.
“It allows Eland and its stakeholders to push on with the further development of our assets without the requirement for equity funding,” he said.
“Furthermore, in a current economic environment of falling oil price, where financing and capital expenditure plans are being cut or deferred, the commitment from Standard Chartered to coordinate the raise of such a material debt facility by the end of the year further validates the significant value of the OML 40 license,” he added.
Eland targets to increase its total gross production to 50,000barrels of oil equivalent per day (bopd) as the company seeks to acquire and develop under-exploited upstream assets in Nigeria.
The company had successfully raised N29.5 billion to buy a stake in OML 40 in Nigeria after being listed in the Alternative Investment Market (AIM), three years after the company was founded.
To achieve its targets, the company plans to increase production from existing wells at Opuama that had since restarted at an expected initial gross rate of at least 2,500 barrels of oil per day (bopd).
OML is an asset with production and exploration potential and with independently certified gross recoverable 2P Reserves of 71.5 million barrels, 3P Reserves of 117 million barrels in the Opuama and Gbetiokun Fields and Mean Contingent Resources of a further 16.7 million barrels in the Abiala and Ugbo Fields.
Previously held by Shell, Total and Eni, OML 40 covers some 500 square kilometres and is located onshore in the Niger Delta and contains light ‘sweet’ oil.
Since 1964, 18 wells have been drilled there, with 15 finding hydrocarbons. One field, Opuama, was formerly in production for over 30 years, from 1975 to 2006.
Shell owned 30 per cent stake in the joint venture for OML 40 along with Nigerian National Petroleum Corporation (NNPC) with 55 per cent while Total E&P Nigeria held 10 per cent and Agip Oil 5 per cent.
Shell sold 30 per cent interest of OML 40 to Elcrest Exploration and Production Nigeria (EEPN) for $102 million.
EEPN is a consortium of Starcrest Nigeria Energy and Eland Oil and Gas.
– This Day