(Ecofin Agency) - Eland Oil and Gas Plc has said that it wants to raise up to $19.5 million to increase production from the OML 40 licence in Nigeria, by three-fold.

According to the company, the money will be raised through placing of shares at an accelerated bookbuild. An accelerated bookbuild is a form of offering in the equity capital markets which involves offering shares in a short time period, with little to no marketing.

The money raised would be used for a workover and side-track of the Opuama-7 well, acquire a new secure pipeline transfer point and early production system at the Gbetiokun-1 well, currently being worked over.

“Current gross production stands at 11,500 barrels per day (bpd). Opuama-7’s workover will add a further 5,900 bopd to make a total of about 17,400 bopd,” George Maxwell, Chief Executive of Eland said. He added that the Gbetiokun-1 workover will add an additional 8,000 barrel of oil per day signifying a total gross production of 25,400 bopd.

The Aberdeen-based oil and gas group faced a tough year in 2016, as it was affected by the closure of the Forcados terminal in February, due to pipeline sabotage. This resulted in the shutting down of production on the Opuama-1 well for 15 months and with the low oil prices in the global market, Eland had to trim down its expenditures.

Production, however, recommenced earlier this month.

The OML 40 licence is situated in the northwestern part of Niger Delta and covers an area of 498km². The licence has gross 2P oil reserves of 83.2Mmbbl discovered in the Opuama and Gbetiokun fields. Eland oil and gas holds 45% interest in the licence through Elcrest joint venture.

Anita Fatunji