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Oil firms run by North Sea veterans make progress amid market volatility

Oil firms run by North Sea veterans make progress amid market volatility

 

ABERDEEN-based Eland Oil and Gas expects to achieve another year of strong growth in production in Nigeria after doubling output in the latest year in spite of facing challenges amid the crude price plunge.

Run by a veteran of the North Sea oil industry, George Maxwell, Eland said it expects to produce up to 17,000 barrels oil per day on average this year compared with 8,000 bopd last year.

Eland expects to start production from the onshore Ubima field in the second half, which will reduce its reliance on the Opuama asset in the Niger Delta.

Mr Maxwell said 2019 is shaping up to be a busy year for the Aim-listed company.

“The sharply higher production rates throughout 2018 have led to a strengthening of our financial position and we commence this year with a largely unused new debt facility and a strongly cash generative business,” noted Mr Maxwell, who started in the industry with Texaco in Aberdeen.

Eland lost $31 million in 2016, during which the oil price fall from 2014 and security issues weighed on its performance.

The Forcados terminal used to handle production from Opuama was shut down from February 2016 to May 2017 following sabotage linked to militant activity in the Niger Delta.

Separately, Trinity Exploration and Production, which is led by a man who helped develop a big North Sea business, said yesterday it had made good progress. The firm had faced difficulties during the oil market downturn.

Aim-listed Trinity increased average production to 2,871 bopd in 2018, from 2,519 bopd in the preceding year after bringing eight onshore wells onstream in Trinidad.

Executive chairman Bruce Dingwall said Trinity was in an extremely strong position with increasing levels of profitable production, a healthy cash balance and no debt.

He started Trinity after running Aberdeen-based North Sea player Venture Production, which Centrica bought for £1.3 billion in 2009.

Trinity has a corporate development office in Edinburgh but it lost around $140m in 2014 following the oil price fall from June of that year. It completed a restructuring in 2017, which involved reaching an agreement with creditors.

Brent crude has fallen from $85/bbl in October to around $60/bbl amid booming US production. It fell from $115/bbl in June 2014 to less than $30/bbl early in 2016, before major exporters cut output.

Shares in both firms rose four per cent yesterday. Eland shares closed up 5p at 125.5p. Shares in Trinity Exploration and Production ended the day up 0.65p at 16p.

 

Source: The Herald

Published: 16-01-2019

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