Eland Oil & Gas acquires stake in Nigeria’s Ubima Field

Eland Oil & Gas has announced that Wester Ord, a wholly owned subsidiary of Eland, has agreed to acquire a 40 per cent  participating interest in the Ubima Field, on shore Niger Delta,  from Allgrace Energy Limited.

The Nigeria and West Africa focused oil and gas exploration and development company, in a press statement, said the purchase  was a “very attractive and accretive deal” as the field could contain up to 66.9 million barrels of oil.

“We have today announced the acquisition of a 40 per cent interest in the Ubima marginal field, the development capex for which we intend to fund from debt secured against the enlarged asset base, ” Chief Executive Officer Leslie Blair said.

The field  needs a $125 million investment and can be in production nine to 12 months after beginning its program.

“We will be able to lead the development and move quickly to bring these assets into early production generating strong cashflow,”  Blair said.

In a separate release, Eland said its losses widened in the first-half of its financial year.

The company reported a pretax loss of $11.9 million for the six months to June 30, compared with $11.0 million in the first half of last year, due to higher operating expenses, including increased salary costs and a net foreign exchange loss.

Eland said that it is planning a seven well development drilling programme in the Opuama field, onshore Nigeria, which it plans to commence in the fourth quarter and complete at least one new producing well in the period.

The company said it expects its year-end gross production exit rate from the OML 40 site to be roughly 7,000 barrels of oil per day.