Eland Looking for Cash to Close OML 40 Deal

Eland Oil & Gas is looking to raise cash to fund its stake in one of the OMLs in Nigeria’s Niger Delta that Shell auctioned off last year. The company is looking to raise more than £100 million and is conducting roadshows to garner the funds.

Funding Eland on OML 40 could prove to an attractive proposition as it has a former producing field with infrastructure already in place which could allow for production to be restarted rather quickly. OML 40 is also underexplored and has the potential for significant exploration upside.

Last April, Eland and its partner Starcrest Nigeria Energy successfully bid for a 45% stake in the license. On completion of the deal, the stake will be held by a JV company owned by Eland and Starcrest, with NNPC owning the remaining interest.

The acquisition price of OML 40 is set at about £100 million, of which a deposit of about £10 million has already been paid.

The final decision on Eland’s flotation will depend on the level of support indicated by investors. Canaccord Genuity has been appointed as the nominated adviser to Eland.