Eland Oil & Gas Share Discussion Threads

[awise355] 26/5/2017 11:14

Price slow increasing after the initial drop...

[gersemi] 25/5/2017 13:03

Eland is primed for share price surge

The company is focused on lifting output from Nigerian asset

27 April 2017

Great Ideas

Issue: 27 Apr 2017 - Page 13

A material ramp up in output from Nigerian oil producer Eland Oil & Gas (ELA:AIM) over the next six months could act as a significant catalyst for its share price.

The company’s main asset is the OML 40 licence onshore in Nigeria’s Niger Delta, in which it owns a 22.05% stake through its Elcrest Exploration and Production joint venture. It contains two fields, Opuama and Gbetiokun, with current proved and probable reserves of 83m barrels.

Elcrest is estimated to owe Eland as much as $360m and until this sum is repaid Eland receives 100% of the cash flow from Elcrest’s 45% interest in OML 40.

BIG PRODUCTION UPLIFT

The plan is to boost production from OML 40 from a current 8,000 barrels of oil per day (bopd) to 17,500 bopd early in the second half of 2017 and 25,000 bopd around the turn of the year.

This will partly be achieved through drilling a side-track on the Opuama-7 well (using a different hole or wellbore to gain access to the oil) for which the company is fully funded following a redetermination of its borrowing base.

Eland has $9m left unused on its $24m lending facility and a current cash balance of $7.5m. It is also set to receive an $8.5m payment for its crude in the near-term.

An extended shut down of the country’s Forcados oil terminal due to militant attacks has seen an alternative route to market developed, shipping crude using tankers. This solution has a maximum capacity of 20,000 bopd.

Chief executive George Maxwell says the revenue from the oil minus the costs of getting it to market on the shipping solution is $12 per barrel at an oil price of $50 per barrel. That compares with $27 per barrel (revenue minus costs) if Forcados was operational.

WHAT IS THE UPSIDE POTENTIAL?

Canaccord Genuity values Eland at 40p based on the shipping option and 110p on Forcados coming back on stream.

The company trades on 5.8 times forecast adjusted 2017 earnings per share falling to 3.1 times for 2018 when free cash flow of $26.3m is also pencilled in.

From our point of view this more than prices in the significant security and political risks associated with operating in the Niger Delta.

Maxwell set up Eland with Leslie Blair in 2009 and moved from the finance director role to replace Blair, who moved to an advisory role, as CEO in 2014.

Both are former employees of Addax Petroleum, one of the few UK-listed success stories in Nigeria which was snapped up for $7.2bn by Chinese firm Sinopec in 2009. (TS)

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Shares mag from April 2017

[awise355] 25/5/2017 11:51

Ah ok that makes sense as they seem coy about it

[flagon] 25/5/2017 11:48

awise ... Yes would be my understanding but they can't mention Forcados by name as it hasn't been officially reopened.

GLA

[awise355] 25/5/2017 11:26

So they are back exporting by the Forcados pipeline?

[flagon] 25/5/2017 11:19

Ticking up now ... making highs not seen since July 2015. Results due shortly.

[mirabeau] 25/5/2017 11:13

RNS - good news

[mr.oz] 16/5/2017 11:37

small upgrade in TP to £1 , from PH

[flagon] 12/5/2017 14:58

A Nigerian state official has now said Forcados will come on stream shortly ...

Link ->

[mr.oz] 09/5/2017 15:04

that's good news ... let's hope the militants can be appeased by all the governmental kick backs currently being taken advantage of

[neo26] 27/4/2017 09:19

This is a sound company if it was producing anywhere other than Nigeria it would be double by now.

[gersemi] 27/4/2017 05:56

Tipped in Shares mag.

[fillipe] 12/4/2017 14:17

Half-way there!... Plenty still to go for.

f

[mr.oz] 12/4/2017 12:55

PG upped target from 95p to 120p on Friday

[rolo7] 11/4/2017 13:30

Moving up nicely here heads shoulders top that failed on chart discount to nav

[d1nga] 03/4/2017 16:49

still concerned as no reply from the co. via their investor relations section of their website to my questions re what security measures in place to protect both cargo and crew

for that reason I'm still out!

[mr angry] 31/3/2017 12:19

Seplat results yesterday (SEPL) worth a read. They are also highly reliant on the Trans Forcados export pipeline and are currently building a barge export system, but are behind Eland as it's not finished yet. They say they expect the pipeline to reopen end Q2 (presumably meaning June)

Article summarizes

[d1nga] 31/3/2017 08:35

mr oz I think I will

maybe someone here has already ?
obviously not you though

[mr.oz] 31/3/2017 08:32

Ask them. And maybe stop concerning yourself

[d1nga] 31/3/2017 08:18

the BIG worry for me is the prospect of bandits kidnapping the crew of the transport tankers selling the crude and holding the crew to ransom.

I wonder what the co's security measures are?

[mr.oz] 31/3/2017 07:15

Exciting, well run company, excellent updates.