Eland joint venture lands licence renewal in Nigeria
Eland Oil & Gas on Monday confirmed that the Nigerian minister of petroleum resources has agreed to joint-venture Elcrest’s renewal of its equity participation in Oil Mining Lease 40 for a further 20 years.
The minister’s consent is reported to be conditional on Elcrest’s payment of a renewal bonus of $6.3m within 90 days and a commitment to gas monetisation and on a additional gas sales agreement being signed within 5 years.
The OML 40 site is in the Northwest Niger Delta approximately 75km northwest of the city of Warri and holds gross 2P reserves of 83.4 mmbbls, gross 2C contingent resources of 40.4 mmbbls and a best estimate of 254.5 mmbbls of gross unrisked prospective resources.
George Maxwell, chief executive of Eland, said: "We are delighted to confirm the formal renewal of our OML 40 licence. This continues the OML 40 joint venture's excellent opportunity to continue the significant investment into OML 40's work programme; continuing to increase production, proven reserves, cash flow local employment and government take."
Eland’s principle asset is its 45% interest in OML 40 through the Elcrest joint-venture, also holding a 40% interest in the Ubima Field, onshore Niger Delta, in the northern part of Rivers State.
"We look forward to a continuing positive partnership with Nigerian Petroleum Development Company and pushing together to make OML 40 one of the most significant license blocks in Nigeria," said Maxwell.
Eland’s shares were up 3.76% at 105.32p at 1224 GMT.