Eland Oil and Gas (ELA.L, ELA LN)
Eland is an oil and gas appraisal and development company operating in the Nigerian delta. It is involved in the development of OML 40 which has reserves, resources and existing wells, facilities and export pipeline. The licence is jointly held with the Nigerian Development Corporation and was purchased from Shell. OML 40 contains one developed field, shut in by Shell in 2006, and four undeveloped fields. Independently audited gross reserves are 71.5m barrels. Numerous exploration targets also exist on the licence with gross prospective resources identified at 442m boe. Shell, the former holder of the licence, drilled 18 wells over 20 years with an 83% success rate. Eland is managed by a strong team of ex-Addax industry professionals whose strategy is to use much the same model. This involves initial identification of reserves and resources that are not currently being developed and applying best industry practice to monetise the barrels identified. Management will use local operational ability and infrastructure. The group was admitted to AIM in September 2012. The strategy is to create an independent West African oil producer with a profile of 50,000 barrels of oil per day within five years. Eland thinks the upstream sector in Nigeria will change significantly in the coming years as large multinationals sell their interests as part of the overall process of promoting local interest. Eland's interest in OML 40 is held through a 45% share in a joint venture company which, in turn, has a 45% stake in OML 40.
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