NORTH Sea-focused Independent Oil & Gas has enjoyed a drilling success weeks after wining backing from US billionaire Warren Buffett for its plans for a flagship development.
Read more: North Sea minnow wins backing from Sage of Omaha
Meanwhile Eland Oil & Gas has made progress in its drive to develop a major production business in Nigeria from Aberdeen after overcoming challenges.
Independent said a well to appraise the Harvey discovery had found a gas column.
The company needs to complete testing work before it can come up with an estimate of the size of the find.
However, with analysts describing the result as good news, the strike will boost hopes that the Harvey find is commercially viable.
Chief executive Andrew Hockey noted that there would be a relatively low commerciality threshold for the find.
This is because Harvey lies in an area in which Independent plans to bring other finds onstream. Harvey could utilise the infrastructure concerned.
Read more: North Sea bargain hunters prosper after crude price rise
Independent’s progress will be watched with interest in the North Sea oil and gas industry amid the drive to maximise the recovery of the resources in the area.
The Aim-listed company is focused on a gas-rich area that bigger fish lost interest in.
Independent plans to create a Southern North Sea production hub linking finds left undeveloped by other firms.
The Harvey find was made by Arco in 1984.
Independent found it challenging to secure funding for its North Sea work programme amid the deep downturn triggered by the crude price plunge from 2014.
It faced potential complications amid the fallout from the collapse of the London Capital & Finance (LCF) investment business, which raised £236 million from small investors.
Independent had used debt funding provided by London Oil & Gas, which went into administration in March, and which had been funded by LCF.
In March Independent rebuffed a £26m takeover approach from RockRose Energy, which it said materially undervalued the business.
Read more: London oil form in spat with takeover target
It went on to achieve a major coup in July when a business owned by Warren Buffett’s Berkshire Hathaway Energy group agreed to invest up to £165 million to support its plan for the new production hub.
Independent, which is chaired by geologist Fiona MacAulay, had a market capitalisation of just £54m before the deal was announced.
On Monday Independent announced that it had secured €100 million (£89m) bond funding from international investors to cover its share of the costs of the development.
Mr Hockey said the fund-raise fulfilled the key condition of the farm-out deal agreed with Berkshire Hathaway’s CalEnergy.
Eland Oil & Gas grew first half revenues by around 60% to a record $106 million (£85m), compared with $67m in the same period last year.
Read more: Boost for Scots oil and gas firm in Nigeria as field development approved
With the company announcing a maiden dividend of 1p per share, chief executive George Maxwell said the results underlined how far the company had progressed after experiencing what it has called a very difficult period.
Eland, which is also listed on Aim, restarted production from the Opuama field on the OML 40 licence in the Niger Delta in 2014. The field had been shut in by Shell in 2006 amid security concerns.
However, Eland saw losses triple to $31m in 2016. The Forcados terminal Eland used to handle production from Opuama was shut down in February 2016 following sabotage linked to militant activity. It was reopened in May 2017.
Eland said yesterday “Development of the OML 40 licence continues to progress with the Opuama oil field maintaining reliable operations.”
It brought the Gbetiokun field on OML 40 onstream in July. Mr Maxwell said the start of production should pave the way to a big increase in output for Eland.
The company could use the significant amounts of cash it expects to generate to fund growth. in the West African market
Mr Maxwell noted the firm had grown employee numbers from 16 in 2016 to around 120, including 45 in Aberdeen.
Eland made $40m operating profit in the six months to June 30, against $39.1m last time.
Average daily production rose to 9,948 barrels oil daily from 7,716 bod.
Eland shares closed up 4p at 129p, leaving the firm with a stock market capitalisation of £280m.
Shares in Independent Oil & Gas closed down 1.25p at 17.75p, giving it a stock market worth of around £61m.
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