Eland Oil and Gas comes to AIM

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Today marks the arrival of Eland Oil and Gas onto AIM, the largest float for 3 years on the small cap market.

The company is raising £118m (£106.8m net) through a placing of shares at £1, giving it a market capitalisation of £134 million. It also has a $22 million banking facility and has made a £20 million private placement, meaning it is well funded for its initial activities. 

Earlier this year, Eland acquired a 45% stake in the 498 square kilometre OML 40 licence in Nigeria owned by Royal Dutch Shell, Total and Nigerian Agip for $154 million. The Nigerian Petroleum Development Company owns the remainder of the OML 40 licence.  The project is in the Niger Delta has estimated 2P reserves of 71.5m barrels and initial production from existing wells will be around 2,500 barrels of oil per day (bopd) by the end of February 2013. The target is for 50,000 barrels per day of production within 4 years. Additional exploration prospects totalling a possible 356 million barrels have also been identified on 3D seismic.

The Group intends to enhance Shareholder value through: (i) the re-commissioning of previously shut in production on OML 40; (ii) developing reserves within the OML 40 Lease; (iii) through further exploration and appraisal convert resources to reserves within the OML 40 Lease; and (iv) further acquisitions focused on West Africa and Nigeria.

A welcome additional oil and gas company on AIM –  a mini Heritage Oil.

Contrarian Investor UK

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