Eland Oil & Gas PLC (AIM: ELA), an oil and gas production and development company operating in West Africa with an initial focus on Nigeria, is pleased to announce the following update:

Recommencement of Production from Opuama and Shipping

Further to the Company’s announcement on 25 May 2017, production from the Opuama-1 well has now been restarted. The Opuama Field is now producing from both the Opuama-1 and Opuama-3 wells with current gross production of over 11,500 bopd recorded*.

The export of crude through shipping has now been concluded and the final vessel of three goes off-hire tomorrow. During the operation, nearly 520,000 barrels of crude were transported through shipping and injected into the FPSO terminal offshore Nigeria.

Currently Elcrest Exploration and Production Nigeria Ltd (“Elcrest”), Eland’s joint venture company, has a further receivable of approximately $9.2million from Elcrest’s shipping offtake partner. Approximately $2.0million of this is expected to be paid in the next 7 days to Elcrest with the balance of $7.2million expected upon completion of the final lifting from the FPSO. This is anticipated to be no later than the beginning of July.

The Company expects liftings using the current export route to commence in June.

The Company’s current cash position is $5.2 million. With transportation of production now re-started down the pre-existing export facility working capital management continues as crude oil receipts continue to build to allow further development of the OML 40 license.

Elcrest Shareholder Agreement Update

Subsequent to the year-end, Starcrest, Eland’s partner in Elcrest, issued a fee invoice under the Shareholders agreement. This fee relates to charges agreed at the onset of the joint venture in 2011 of $3 million per annum for each shareholder. Accordingly, to end 2016 $17.25 million is due to each shareholder. Eland has also invoiced the corresponding amount due under the same clause of the agreement and Elcrest will discharge these liabilities to each shareholder as free cash is generated through increasing production of OML 40. Accordingly, Eland’s consolidated 2016 accounts (the “2016 Accounts”), will be reporting a one-off charge of $17.25 million for amounts owed by Elcrest to Starcrest, however 55% of this charge ($9.5 million) is attributable to the non-controlling interest holder, as to be disclosed in our forthcoming annual report.

Although 2016 had the positives of a very successful workover of Ouama-3, due to Elcrest only producing for one and a half months in the year, Elcrest still made a significant operating loss. Therefore, Eland, through its subsidiary Westport, now has an amount to recover from Elcrest of $380.2 million in principal and interest as at 31 December 2016 and remains the sole secured creditor.

Further details will be available in the 2016 Accounts which are expected to be released shortly.

OML 40 Contingent and Prospective Resources

Following work conducted in conjunction with Eland’s successful Capital Market’s Day in April, the Company provides a current summary of its assessment of gross Contingent Resources and Prospective Resources in OML 40, unrisked and risked, in six undeveloped discoveries*, 19 prospects and 11 leads is as tabulated below:

























* Abiala South, Abiala North, Polobo, Tongarafa, Adagbassa and Ugbo.

Source: Press Release