Eland Oil and Gas PLC said it has now completed the restoration work of the production facilities at the Opuama oil field.
The company said it has now entered the pre-commissioning and testing phase, including the testing of the final section of the 12 inch export line of the Opuama oil field.
It hopes to start production at the OML 40 license, located onshore Nigeria, soon after the pre-commissioning and testing has been successfully completed.
The facility had been shut down for seven years. The company had originally expected to complete restoration of the facility and export pipelines in October, but said the restoration work was taking place in a challenging environment and pushed the completion date back to the end of 2013.
Eland said it has been working with the field operator to replace corroded infield flow lines, refurbish the production flowstation and repair the oil export pipeline, replacing all corroded and damaged sections.
Once the work is completed, it is hoping to start drilling an initial six developed wells at the field. The company also is waiting for a rig currently being used by Conoil PLC, but said in October that it should get it early in 2014.
Eland had said in October that it expects to be producing in excess of 2,500 barrels of oil a day from two existing wells in the field by the end of the year. It then expects output to increase by about 3,000 barrels a day for each subsequent new well drilled during 2014.
“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 $22million 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,” Andrew McGeary, at Northland Capital Partners said.
By: Olusola Bello