ELAND Oil & Gas has welcomed an expert report that found its Nigerian reserves could be worth around $600 million (£455m) as the company increased its firepower for expansion moves.

Aberdeen-based Eland noted a report by the Netherland, Sewell & Associates underlined the value of its position in Nigeria which was boosted by the increase in the oil price last year.

The consultancy said Eland’s share of the reserves on the OML 40 licence in the Niger Delta were worth $568.9m on the industry standard proved and probable (2P) basis. That represented an increase of 35.7% on the preceding year.

Netherland, Sewell & Associates estimated the value of Eland’s share of the 2P reserves on the Ubima licence had increased by 200% to $31.4m.

The valuations were based on an estimate that total reserves on the licences increased to 91.5m barrels from around 85.4m, reflecting work done during the year. They assumed an oil price of $71.16 per barrel.

Eland chief executive George Maxwell said the report showed the firm had made great progress on both licences,and provided testimony to the high quality of the assets and the significant investments the firm has made in them.

Eland achieved record production averaging 8,000 barrels oil per day last year.

The company has faced significant challenges in Nigeria. Production from OML 40 was suspended for months following sabotage on the Shell-operated terminal used to process output.

The crude price plunge between 2014 and early 2016 crated complications.

Eland has won a vote of confidence from international lenders, including The Standard Bank of South Africa Limited and Stanbic IBTC Bank PLC, which have allowed the firm to increase its borrowing facilities by $80m to $259m.

Chief financial officer Ron Bain said the increase in the facilities demonstrated the hugely accretive quality of the new wells Eland had drilled on OML 40.

In January Eland noted it had drilled four highly successful wells on the Opuama field on OML 40. All contributed materially to production growth. The company said then it expected to start production from the Ubima field soon.

Eland expects its share of total output on OML 40 and Ubima to average 14,000 bopd to 17,000 bopd this year. It plans to drill an exploration well on the Amobe prospect on the OML 40 licence.