Project Profile

Location: onshore Nigeria
Production: 11,400 bpd (in July, 2017), 954,728 barrels (first 6 months, 2017)
Start-up Year: 1975 (Originally)

OML 40 was originally licensed by Shell in 1964 and production commenced in 1975 at an initial rate of circa 12,000 bopd and produced continuously until the production facility was shut-in in March 2006. Elcrest Exploration and Production Nigeria, a Joint Venture Company established by Eland in partnership with Starcrest Nigeria Energy, in which Eland presently holds a 45% interest, acquired a 45% equity stake in OML 40 on August 31 2012. Elcrest, supported by Eland, Starcrest and together with the NPDC, are planning on the full development of OML 40 after restoring production through the existing production facilities and to export the oil via the Shell operated export terminal at Forcados.

The immediate objective is to re-commission OML 40 production facilities with a target gross production of 2,500 bopd before the end of the 1st quarter 2013, and then to increase production through further development, appraisal and exploration to reach a target gross production of 50,000 bopd within four years.

The Partners have approved the budget and work programme for 2013 totaling US$126 million which anticipates the restart of production by the end of the 1st quarter 2013 and the commencement of development drilling of new production wells at the start of the 3rd quarter 2013. The company is fully funded through expected cash flow, current cash reserves and the debt facility from the Standard Chartered Bank. Interpretation of the data set acquired from Shell has been underway since completion of the acquisition of OML 40, and an updated CPR will be issued and published by end February 2013. To date, the interpretation of the data set, which includes 3D seismic covering 75% of the license area, is proving very exciting both in terms of the potential for reserve increases and in the prospective resources that will be drilled in 2013/2014.

With the signing of the MoU, Shell and its JV partners have effectively ceded their 45% stake in the OML 40 to Elcrest while, the NNPC will retain its 55% stake and at the same time assume operatorship of the oil field through NPDC.

Operators:

NPDC: Operator with 55% interest

Elcrest Exploration and Production Nigeria with 45% interest is a joint venture comprising of:

Eland Oil & Gas
Starcrest Nigeria Energy

Contractors:

Netherland, Sewell & Associates (NSAI): Competent persons report (CPR) as at 30 June 2014