By Abisola THOMPSON
Eland Oil & Gas Plc in a new report on its OML 40 and Ubima licences announced an increase in the proved reserves and in Eland’s net
present value.
The oil and gas production and development firm, also said the borrowing base of its loan has been increased to $134 million from
$103 million.
Eland Chief Executive George Maxwell said: “We have always believed that OML 40 had significantly more to offer than simply the Opuama and
Gbetiokun fields. We will be drilling our first near field exploration well on the licence later this year with the Amobe prospect, followed
next year by appraisal drilling on Abiala. These two wells have the potential to more than double the licence’s current [proved plus
probable] reserves base. At Ubima, I look forward to the initial phase of development for this field in 2019 following the fourfold increase
in reserves estimates.
“I am delighted that the CPRs ascribes a value for Eland’s share of [proved plus probable] reserves in OML 40 and Ubima of approximately $600 million, suggesting there is still material potential upside within the company”.
Gross reserves at OML 40, following the gross production of 6.5 million barrels of oil in 2018, was 42.9 million barrels, up 8 per
cent from the end of 2017.
The proved plus probable gross reserves fell 1 per cent to 8.2 million barrels and proved plus probable plus possible gross reserves fell 1
per cent to 116.8 million barrels.
Eland’s net entitlement present value, at a 10 per cent discount rate and with a flat price deck of 71.16 per barrel is $473.9 million
proved, up 68 per cent.
The net entitlement is based on treating Eland’s funding of its joint venture partner’s share in the licence as a carried working interest,
which gives Eland a participating interest of 45 per cent before its payout of loans and 20 per cent after payout.
Its net entitlement proved plus probable is $568.9 million, up 36 per cent year-on-year, and its proved plus probable plus possible net
entitlement is $620.7 million million, up 28 per cent.These figures also assume a 10 per cent discount rate and $71.16 per barrel flat
price deck.
