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Friday, August 2, 2013
Eland Oil & Gas received its reserves and resource evaluation from Netherland, Sewell, & Associates Inc. (NSAI). The report is based on information gathered prior to June 30. The results of the NSAI Report show a material increase in the quantum and value to Eland of the reserves and resources of Nigeria’s OML 40 as compared with the previous independent report from 2012.
As opposed to the previous independent report, the NSAI Report provides reserves and values on a net entitlement basis by taking account of financing arrangements.
Eland saw a gross 2P STOIIP of 307.4MMB, an increase of 35%. Its gross OML 40 reserves Proved 1P came in at 38.2 million barrels, an increase of 99% and its entitlement reserves for 1P after royalties saw an increase of 307%.
Les Blair, CEO of Eland said: “The complete data set for OML 40, in particular the 3D seismic data, was only made available to Eland after closing of the purchase transaction with Shell in August 2012. This new and updated CPR, provided by Netherlands Sewell & Associates Inc., now includes this and other data provided by Shell following deal closure. NSAI have included the value to Eland of the unique financing carry arrangement in place with our partner on OML 40 and the CPR results also demonstrate the base value of the asset and its very substantial exploration upside. The CPR details a significant STOOIP increase and with the planned long term work program there will be further increases in reserves and value for shareholders through the conversion of contingent and prospective resources into reserves. Eland believes that higher recovery rates closer to 50%, in line with regional data, may be applicable to the discovered fields in OML 40.
“There is also scope for significant further increases in the contingent and prospective resources on OML 40 from further technical evaluation where historical drilling success rates achieved by Shell, using 2D seismic, exceeded 80%. OML 40 is truly a world class asset with multiple development, appraisal and low risk exploration targets.”
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