Eland Oil & Gas Share Discussion Threads

[dukedosh] 06/1/2014 10:12

* Northland adds a bit more meat to the bones.

UPDATE: Eland Oil & Gas on verge of starting production

By John HarringtonJanuary 06 2014, 9:17am

"Management remains a key attraction to Eland and its patience is likely to be rewarded with further opportunities in country,' said broker Northland

---ADDS BROKER COMMENT AND SHARE PRICE---

Eland Oil & Gas (LON:ELA) is looking forward to the start of a successful drilling campaign on the Opuama field after completing some ground work.

The rehabilitation work on the Opuama flow station has now been completed, the Nigeria-focused oil & gas development company revealed.

The pre-commissioning and testing phase, including the testing of the final section of the 12 inch export line, has now started.

Production at the OML 40 licence, located onshore Nigeria, should start soon after the pre-commissioning and testing has been successfully completed.

"Initial production rates for the two shut-in wells will be keenly watched. Hopefully this will exceed the aggregate 1,500 bopd [barrels of oil per day] reported on shut-in in 2006 by previous operator Shell, given initial flush production," said Andrew McGeary, at Northland Capital Partners.

"We had expected that first production would commence in January so this announcement looks to be more or less in line with our thoughts," McGeary said.

"Nigeria remains a difficult place to do business, yet we continue to view the rewards as worth the risks and back Eland to deliver on expectations, albeit belatedly.

"Management remains a key attraction to Eland and its patience is likely to be rewarded with further opportunities in country.

"We expect the pace to pick up this year. First, production will trigger the drawdown of the company's US$22mln debt facility to enable development drilling that will also be supplemented by reinvestment of production cash flow.

"The company may take a cautious approach to drilling back to back deviated wells and this may also take longer given the pace so far demonstrated by the national operator NNPDC. Even so, we expect Eland to exit this year with significant production volumes," McGeary said.

Shares were up 4.9% at 108p in early rading.

[typhoon] 06/12/2013 07:58

Some good size buys yesterday and a price rise for once lets hope good news is on the horizon and getting ever nearer!

Of course as well as pumping oil,which is the immediate target, a drilling schedule for those wells will be of big interest too, as the new exploration director Arie Albert ("Bert") Dijksman has been there since 1st October so lets hope he has a handle on this by now!

[dukedosh] 28/11/2013 15:15

* Maybe ELA and Starcrest will look to bid for another license or two in this next lot of Marginal Bid Rounds:



Nigeria to offer 31 lower-volume oilfields to domestic operators

Bloomberg

Nigeria will offer 31 licenses for oilfields with volumes too low for bigger companies to domestic operators next month to broaden the range of industry investors.

Sixteen onshore fields and 15 in shallow-water leases will be auctioned, Petroleum Minister Diezani Alison-Madueke said.

"Government encourages companies where possible to bid in consortia to enable the parties leverage upon each other's strengths," she told reporters today in the capital of Abuja. There will be 3-1/2 months of competitive bidding, she said.

The fields produce volumes too low to be profitable for companies like Royal Dutch Shell Plc (RDSA) and Exxon Mobil Corp. (XOM), who run ventures with state Nigerian National Petroleum Corp. Such ventures, also with Chevron Corp., Total SA and Eni SpA, pump more than 90 percent of the biggest African producer's oil.

The plans come a decade after a first set of 24 so-called marginal fields were handed to 31 local producers, Bloomberg reports.

Output from eight of those now makes up 1 percent of the country's total, adding 100 million barrels of crude to the country's reserves, according to the minister. Nigeria, OPEC's seventh-largest producer, pumped 1.99 million barrels of oil a day in October, according to data compiled by Bloomberg.

Nigerian companies "continued to demonstrate remarkable technical ability in operating significantly larger assets" by buying fields from international producers, Alison-Madueke said.

Local producers including Seplat Petroleum Development Co. and Oando Plc are raising their share of the country's output by agreeing to take fields in restive areas when global producers like Shell and Chevron retreat. Stakes in 13 fields were sold by Shell, Total and Eni from 2010, mostly to domestic companies.

[plastow] 01/11/2013 14:28

Who knows how long these delays will be I'm sitting on my hands untill the the flows..

[mr angry] 01/11/2013 14:10

Y it's tempting, but if production is not starting until year end i can't see a reason to buy in before then.

[dukedosh] 31/10/2013 12:45

Direct link to the article:
www.proactiveinvestors.co.uk/companies/news/62716/eland-oil-gas-investors-will-be-rewarded-for-their-patience-says-broker-62716.html

[lucky_punter] 31/10/2013 11:04

Eland Oil & Gas investors will be rewarded for their patience, says broker
By Jamie Ashcroft

Investors in Eland Oil & Gas (LON:ELA) will be rewarded for their patience, according to City broker Northland Capital.
Eland is on the cusp of starting production at the Opuama field in Nigeria.

[dukedosh] 30/10/2013 13:07

Eland Oil & Gas investors will be rewarded for their patience, says broker

By Jamie Ashcroft October 30 2013, 11:48am

McGeary says operationally Eland can achieve significant momentum next year via a six well campaignMcGeary says operationally Eland can achieve significant momentum next year via a six well campaign
Investors in Eland Oil & Gas (LON:ELA) will be rewarded for their patience, according to City broker Northland Capital.
Eland is on the cusp of starting production at the Opuama field in Nigeria.
First oil was previously anticipated this month and, two weeks ago, Eland said it was confident this crucial milestone would be reached before the end of the year.
While the pace, set by the company's Nigerian partners, has fallen behind schedule, the considerable project will deliver significant value and will be a catalyst for the company to grow further.
In a note issued on Wednesday, Northland analyst Andrew McGeary said: "It has been a frustrating year for Eland's management that has had to adapt to the pace of national operator, Nigeria Petroleum Development Corporation (NPDC).
"Further delays are disappointing but unsurprising in light of the challenging operating environment and the nascent status of NPDC.
"However, the cautious approach to restarting operations should bode well for performance when production is restarted with the latest guidance being prior to year end.
"We expect patience to be rewarded first by the onset of shut-in production and then via the rapid ramp-up to highly material volumes and cashflows from the low risk development wells."
McGeary adds that operationally Eland can achieve significant momentum next year when a six well campaign – targeting 54.2mln barrels of reserves - kicks in.
Northland rates Eland as a 'buy' with a 161p price target, nearly 60% above the current price of 103p per share.

www.proactiveinvestors.co.uk/companies/news/62716/eland-oil-gas-investors-will-be-rewarded-for-their-patience-says-broker-62716.html

[dukedosh] 28/10/2013 11:54

Eland Oil, Opuama field to restart production this year

October 28, 2013 | Filed under: Company News | Author: FEMI ASU

West Africa-focused Eland Oil and Gas says final works on repairing the Opuama Production Facility in Nigeria are expected to be completed over the coming weeks and that production on the field – located on the firm's Oil Mining Lease (OML) 40 – would commence before year-end.

The facility was shut down in March 2006 and consequently there has been some deterioration of infrastructure. The company said it worked closely with the operator, NPDC to re-start the production in a challenging operating environment.

Eland said that the activities of NPDC during 2013 have been focused on replacing corroded infield flow lines, refurbishment of the field's production flow station and the repair of the oil export pipeline, including the replacement of all corroded and damaged sections.

Les Blair, chief executive officer, Eland, said in a statement posted on the company's website: "Our immediate focus is to restore oil production on OML 40 and we have a close working relationship with the operator, NPDC, to achieve this goal. In parallel we continue planning for the extensive development drilling campaign on OML 40, starting with six wells on the Opuama Field.

"The delays we have experienced are frustrating but not unexpected in a project of this complexity and in the environment in which we are operating. The management of Eland has significant experience of working in Nigeria and has established excellent working relationships with NPDC and all of our stakeholders in the license area. This will stand the company in good stead to unlock the value inherent in OML 40, which will be amply demonstrated when the drilling campaign gets underway," he said.

So far, the firm said work has been completed to fully replace the three flow lines on the planned existing start-up wells in the field. These flow lines have been trenched and overlaid with protective concrete mats at major water crossings.

Eland said that the year-end exit production rate is expected to be in excess of 2,500 barrels of oil per day from the planned restart of the two existing wells in the Opuama field. It is then anticipated that production will increase by around 3,000 bopd for each subsequent new well drilled during 2014. A designated rig is expected to become available in early 2014, from when the operator will drill six development wells within the Opuama field.

Eland holds a 45-percent interest in OML 40.

By: FEMI ASU

[plastow] 22/10/2013 11:29

The big question is this the time to average down

[dukedosh] 18/10/2013 20:15

You obviously haven't experience of time in Africa. This delay is merely a minor distraction. This team is proven FACT. Check out Addax history before the take over and you'll learn why.

[iicb] 18/10/2013 16:46

Ain't working that well, they've missed two targets in past 6 months dd

[dukedosh] 16/10/2013 20:14

They had exactly the same indigenous partners with Addax as they have now. It's a proven team that works well. Very well. Look at the set up again and closely. Eland are far from powerless.

[simon gordon] 16/10/2013 19:38

Duke,

When they ran Addax did they have operational control, or were they a powerless passenger like now?

[iicb] 16/10/2013 19:19

hope they don't run out of cash. more missed targets, not impressed.

[typhoon] 16/10/2013 09:22

As has been said this is Nigeria thus the delays...the eventual benefits to the shareholders of patience are not in doubt

[plastow] 16/10/2013 09:00

yes happy with the update the good news will come soon

[dukedosh] 16/10/2013 08:56

Now that's how to write a RNS. Pity their timing is not so good. Still, this play is moving forward and there's no reason why this shouldn't progress the same way Addax did in the early years. I can see massive upside from this excellent entry point.

With recent talk of oil theft and pipeline damage, of note is the Opuama oil pipeline which is trenched and being covered in concrete at water crossings. The thieves will surely seek easier prey.

2014 will be transformational for Eland with first oil in Q1 and arrival of the swamp rig for the initial 6 well development drilling programme.

We have to wait a little longer than expected but this is Nigeria.

[typhoon] 14/10/2013 22:28

Thats a relief thanks for that info Dukedosh!

[gunsofmarscapone] 14/10/2013 21:55

That is a very useful piecen of information dukedosh.

Had a few concerns re Shell strategic plan.

[dukedosh] 14/10/2013 21:06

The TND trunkline is in the east and makes headlines regular because it suffers regular oil theft attacks. Fortunately ELA doesn't use it, it will use the Opuama trunkline which feeds into the Escravos terminal where custody transfers, finally ending up at the Forcados terminal, all of which is in the west. The west trunklines are intrinsically safer than those to the east which is probably the reason why Shell are retaining their onshore interests in the west, whilst off loading those in the east.

[typhoon] 14/10/2013 20:47

Nigeria is a volatile place but blessed with lots of oil...articles like this one on link below underline the problems...but there is so much oil it is naturally worth pursuing