Eland Oil & Gas announce New CPR and Operational Update
Eland Oil & Gas plc (AIM: ELA), an oil & gas development and exploration company operating in West Africa with a principal focus on Nigeria, is pleased to announce the results of a new competent persons report (“CPR” or “Report”) provided by Netherland, Sewell & Associates Inc. (“NSAI”) as at 30 June 2014.
The results of the CPR, details of which are set out below, demonstrate a material increase in the value to Eland of the reserves and resources of OML 40 as at 30 June 2014 as compared with the previous Report dated 30 June 2013. The new Report takes into account the recently granted Petroleum Profits Tax (“PPT”) incentive, awarded to Elcrest Exploration and Production Nigeria Ltd (“Elcrest”) in May 2014, which results in a significant increase in cash flows and net present value.
On 30 June 2014, the Company announced that Elcrest Exploration and Production Nigeria Ltd (“Elcrest”), Eland’s joint venture company, had been awarded approval of a five year petroleum profits tax (“PPT”) exemption. The Company is pleased to announce that Elcrest has now received the anticipated acknowledgement from the Federal Inland Revenue Service of Nigeria that until 30 April 2019 Elcrest will only be liable for withholding tax and VAT but not PPT.
In the light of an ongoing review of operations and some consequential changes to the Company’s work programme and delays in dredging, the Company is now anticipating development drilling on new production wells to begin in Q1 2015. As part of the review, the Company will also evaluate the potential for additional production through the re-entry of existing non-producing wells (Op-4,-5 and -7) on Opuama. The re-entry work will be carried out before or in conjunction with the revised development drilling programme.
The Company is currently on production and working towards satisfying debt accessibility, which is anticipated in the near-term. The Company, which on 30 September 2014 had cash reserves of $18.2 million, has no immediate need to draw down the debt facility. However, accessing the debt provides greater flexibility and optionality with regard to the work programme.
Mr George Maxwell, CEO, commented:
“The updated Competent Person Report highlights the value of the tax incentive to Eland and demonstrates a material increase in the value of the reserves, increasing the NPV per net 2P barrel by over 75%.
The increase in prospective resources high estimate to over 750 million barrels confirms our belief that OML 40 truly represents a portfolio within a single licence.”
Eland’s new investor presentation is now available on the Company’s website: www.elandoilandgas.com