Eland seeks to boost debt after Nigeria expansion

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”.

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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.”