(Ecofin Agency) - San Leon Energy Plc has announced that it has raised $221.4 million from the capital market to finance its procurement of a 9.72% indirect interest in Oil Mining Lease (OML) 18, onshore Nigeria.

According to the company, OML 18’s estimated gross proved and probable reserves are around 576 million barrels of oil, about 4.2 Tcf of gas while its gross 2C contingent resources are around 203 million barrels of oil and about 1.6 Tcf of gas.

San Leon added that the net incomes are being used to finalize OML 18’s production agreement, stating that this signifies its entry into the Nigerian onshore oil and gas production industry.

As of June 2016, OML 18’s production was at about 50,000 bopd and approximately 50 Mmcsf/d of gas.

Operated by Eroton and Sahara with 45% and NNPC with 55%, OML 18 which is located in the Southern Niger Delta, comprises of a mangrove swamp area, covering 1,035 km². It is seen as a world-class resource of oil, gas, and condensate and is close to the Bonny Terminal operated by Shell.

“Under Eroton’s operatorship, the production wells at OML 18 have seen significant increases, rising from approximately 10,000 b/d of oil in March 2015 to approximately 50,000 b/d of oil and approximately 50 million SCF per day of gas in April 2016. In the development plans currently under discussion for OML 18, the intention is to increase production to approximately 115,000 b/d of oil and approximately 485 million SCF per day of gas by 2020. In addition, it is anticipated that the OML 18 Production Arrangement and the relationships established as part of the transaction will act as a platform for further similar transactions,” Oisín Fanning (photo), Executive Chairman of San Leon told Sweetcrude reports.

Oil was first discovered on OML 18 in 1958 on the Krakama Field with production initially commencing in 1970. Nine fields were discovered on OML 18, of which four are currently still producing, including the Awoba field, which connects OML 18 and OML 24. So far, an estimated 1,002 Mmstb of oil (including Alakiri condensate) and 1,778 bcf of gas have been produced from the fields.

Anita Fatunji