ELAND Oil & Gas chief executive George Maxwell has said the Aberdeen-based company has made good progress with its operations in Nigeria although the challenges of the crude price plunge have been compounded by security issues there.

Mr Maxwell said 2015 was a milestone year for Eland which cut annual losses to $6.7 million (£4.6m), from $16.3m, after achieving a big increase in production.

Aim-listed Eland has focused much of its attention on plans to revamp the Opuama field, which was shut in by Shell in 2006 amid security concerns.

After restarting production from Opuama on the OML 40 licence in 2014, Eland increased the revenues it generated from the field by 54 per cent annually last year, to $18.1m, from $11.7m. The company noted that it faced less disruption to production than in the preceding year, when it suffered pipeline ruptures due to corrosion and illegal bunkering.

Since the year end, Eland has hit complications.

Mr Maxwell noted: “Forcados, the current export terminal for OML 40 has been shut down since mid-February due to sabotage. Operators have been advised by Shell that the terminal will re-open in June.”

Eland is working on plans to develop supplementary export routes.

The company has continued to grapple with the fall out from the plunge in the crude price, which chairman Russell Harvey noted had resulted in a sharp slow down in the growth of the Nigerian economy last year.

Eland said: “Like many oil producers the reduction in commodity prices has had an impact on our potential borrowing base. During 2015 we have seen the availability of our initial committed $35 million debt facility (with Standard Chartered bank) reduced to $25 million.”

But Eland won an apparent vote of confidence from investors in April when it raised $18.5m through a share placing. It had set out initially to raise $15m.

The company expects to use some of the proceeds to fund development work on the Ubima and Gbetiokun fields and further activity on Opuama.

The group cut operating costs by 25 per cent in 2015 as it tried to limit the impact of the oil price fall.

The total output from Opuama sold last year rose 195 per cent to 341,000 barrels following a workover to increase production from the first well brought onstream. Eland restarted production from another well during the year, after deciding to focus resources on relatively low cost activities.

It shares production with local partners.