DCSIMG

Eland seeks to boost debt after Nigeria expansion

  • by GARETH MACKIE
 

Oil and gas explorer Eland is in advanced talks with lenders to take on more debt after buying a stake in an onshore oil field in the Niger Delta.

An existing $22 million (£13.2m) facility with Standard Chartered remains undrawn, but Eland said it wants to “significantly increase” its borrowing capacity by entering into a reserve-based lending agreement.

The Aberdeen-based firm, which focuses on Nigeria and West Africa, said the purchase of a 40 per cent interest in the Ubima field was a “very attractive and accretive deal”.

Chief executive Les Blair said the field could contain up to 66.9 million barrels of oil.

Eland also revealed today that its losses after tax widened to $12m for the six months to 30 June, from $11m a year ago.

The company was cheered earlier this year when first oil started flowing from its Opuama field, where production is averaging 3,500 barrels a day, and Blair said the benefits of stable output “cannot be overemphasised”.

He added: “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.”

 

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