ELAND Oil & Gas has said it can make significant profits on its output in Nigeria in spite of the fall in oil prices since June and highlighted an improvement in its production performance.
Aberdeen-based Eland said the Opuama field in onshore Nigeria has achieved an average uptime of around 90 per cent in November and over 74 per cent in the fourth quarter to date. Announcing interim results in August, Eland noted there had been a number of production interruptions since it brought Opuama onstream in February this year. These reflected factors including theft from pipelines through illegal bunkering.
In an operations and financing update issued yesterday, Eland said average uptime on Opuama has increased month-on-month since August.
Chief executive George Maxwell said: "Achieving a consistent level of production at Opuama has been the main objective of the management so we are very pleased with the positive developments the Company is making."
Opuama is consistently producing over 3,500 barrels oil daily.
Mr Maxwell noted Eland should find it easier to raise debt funding following the increase in uptime at Opuama, on the OML 40 licence.
Aim-listed Eland said it remains in advanced discussions to target a $75 million (£48m) reserve based lending facility. This could be used to acquired additional acreage in Nigeria.
In August, Eland agreed to acquire a 40 per cent stake in the onshore Ubima field for up to $10m.
Mr Maxwell added yesterday: "The combination of a lower cost environment and our five-year petroleum profits tax holiday on OML 40 means our netback per barrel remains significant even in the current economic environment of falling oil prices."
Eland received confirmation from the Nigerian authorities in June that production from OML 40 will be exempt from petroleum profits tax until April, 2019.
Opuama had been shut by Royal Dutch Shell in 2006 amid security concerns.
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