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Thursday, October 9, 2014
Eland Oil & Gas has received a new competent persons report (CPR) for its Nigerian asset, OML 40. The CPR was conducted by Netherland Sewell & Associates (NSAI). The results of the CPR demonstrate a material increase in the value to Eland of the reserves and resources of OML 40 as of June 30 compared with the previous report of June 2013.
The new Report takes into account the recently granted Petroleum Profits Tax (PPT) incentive, awarded to Elcrest Exploration and Production Nigeria in May, which results in a significant increase in cash flows and net present value.
Eland also offered an operations update reporting that Elcrest Exploration and Production Nigeria, Eland’s JV company, had been awarded approval of a five-year petroleum profits tax (PPT) exemption. The company announced that Elcrest has now received the anticipated acknowledgement from the Federal Inland Revenue Service of Nigeria that until April 30, 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 its work program and delays in dredging, it 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 program.
George Maxwell, CEO commenting said: “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 license.”
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