ABERDEEN-based Eland Oil & Gas expects to achieve a big increase in production in Nigeria after enjoying a drilling success in the country.
Aim-listed Eland said a well on the Opuama field in the Niger Delta had found good quality oil-bearing sands at the expected location.
Eland expects the partners in the field will be able to produce around 5,900 barrels oil per day from the Opuama-7 well. It has begun preparations to bring the well online as soon as possible.
The partners produced an average 12,000 bopd in total from 1 July to 20 October from the two Opuama wells that are online, numbered one and three.
The success with Opuama-7 has encouraged Eland to bring forward plans to drill another well on the field, Opuama-8. Two more wells may follow that one.
Chief executive George Maxwell said: “The drilling of Opuama-8 has the potential to add further material production of an initial 5,000 to 7,000 bopd with strong revenues in a short time frame.”
He underlined Eland’s belief in the long term potential of the OML-40 licence containing the Opuama field, on which it has faced significant challenges.
Eland had to suspend production from the field in February last year because the Forcados terminal used to handle output was shut down due to sabotage. The Shell-operated terminal only reopened in May.
Eland’s first half losses rose to $23.5m before tax, from $9.5m last time.
But the firm won a vote of confidence from investors in June when it raised £15m at 55p per share to allow it to speed up drilling activity. Shares in Eland closed up 1.25p at 67.25p yesterday.
While Brent crude is trading at around half the $115 per barrel it reached in 2014, Eland can produce oil relatively cheaply from onshore wells in Nigeria.
Separately, Premier Oil has continued to make good progress with preparations to start production from the giant Catcher field east of Aberdeen.
London-based Premier said the floating production storage and offloading vessel that will be used on Catcher has been secured in place.
Premier expects to start production from Catcher this year, with its partner in the field Cairn Energy.
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