AIM-listed Eland Oil & Gas, an oil & gas development and exploration company operating in West Africa with a principal focus on Nigeria, has announced the results of a reserves and resources evaluation provided by Netherland, Sewell & Associates Inc. (‘NSAI’) as at 30 June 2013.

The results of the NSAI Report, details of which are set out below, demonstrate a material increase in the quantum and value to Eland of the reserves and resources of OML 40 as at 30 June 2013 as compared with the previous independent report with an effective date of 30 June 2012. As opposed to the previous independent report, the NSAI Report provides reserves and values on a net entitlement basis by taking account of financing arrangements.


Gross 2P STOIIP of 307.4MMB, an increase of 35%

Gross OML 40 Reserves

  • Proved (“1P”) of 38. 2 million barrels (“MMB”), an increase of 99%
  • Proved plus Probable (“2P”) of 81.8 MMB, an increase of 14%
  • Proved plus Probable plus Possible (“3P”) of 105.4 MMB, a decrease of 10%

Eland Net Entitlement Reserves (after royalties)

  • 1P of 13.8 MMB, an increase of 307%
  • 2P of 23.5 MMB, an increase of 86%
  • 3P of 27.1 MMB, an increase of 32%

Eland’s Net (Entitlement) Present Value at 10%

  • 1P of US$ 303 million. US$ 400 million with financing arrangement, an increase of 656%
  • 2P of US$ 407 million. US$ 445 million with financing arrangement, an increase of 195%
  • 3P of US$ 436 million. US$ 473 million with financing arrangement, an increase of 87%

Gross OML 40 Contingent Resources

  • 1C of 18.4 MMB, an increase of 60%
  • 2C of 45.3 MMB, an increase of 192%
  • 3C of 138.6 MMB, an increase of 493%

Les Blair, Chief Executive Officer of Eland, said:

‘The complete data set for OML 40, in particular the 3D seismic data, was only made available to Eland after closing of the purchase transaction with Shell on 31 August 2012. This new and updated CPR, provided by Netherlands Sewell & Associates Inc., now includes this and other data provided by Shell following deal closure. NSAI have included the value to Eland of the unique financing carry arrangement in place with our partner on OML 40 and the CPR results also demonstrate the base value of the asset and its very substantial exploration upside. The CPR details a significant STOOIP increase and with the planned long term work programme there will be further increases in reserves and value for shareholders through the conversion of contingent and prospective resources into reserves. Eland believes that higher recovery rates closer to 50%, in line with regional data, may be applicable to the discovered fields in OML 40.

There is also scope for significant further increases in the contingent and prospective resources on OML 40 from further technical evaluation where historical drilling success rates achieved by Shell, using 2D seismic, exceeded 80%. OML 40 is truly a world class asset with multiple development, appraisal and low risk exploration targets.’


Information from Eland Oil & Gas press statement was used in this report.