Eland's OML40 ready to ramp up

Eland this morning reported impressive test results from the Opuama-3 well on OML 40. The Long and Short Strings tested at 5,955bopd and 5,067bopd, respectively, and no water. Management now expects Opuama-3 and Opuama-1 to generate gross output to ~14,500bopd.

Unfortunately, OML 40 remains shut in as a result of interruptions to third party export facilities. In light of these export issues, the company intends to accelerate plans to barge crude, with deliveries commencing by January. The company is in discussion with its partner NPDC to accelerate work on a permanent alternative export solution in advance of the material increase in production that is expected from the side-tracking of Opuama-7 and the re-entry and completion of Gbetiokun-1. However, there is no intention to commence these work-overs until production can be regularised.

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Sub-Saharan Africa - newsflow update

Gabon Deepwater - Leopard discovery

• Leopard-1 was drilled on licence BCD10
• Shell 75%*, CNOOC 25%
• Encountered substantial gas column with 200m net gas pay
• Further appraisal required
• FLNG? 3-4 tcf may be required, although economics of sales into Europe are marginal
• Government is also keen to grow domestic gas market

Congo Offshore - Eni/NewAge - follow up discovery in Marine XII

• Minsala Marine discovery
• Estimated 1bnboe in place, of which 80% oil
• In same shallow water block as the Litchendjili and Nene Marine fields, both of which are currently undergoing development

Angola - first discovery in Kwanza Basin

• Pre-salt offshore Kwanza Basin - oil discovery made by Repsol
• Will evaluate commerciality of the Locosso oil field
• Located in Block 22, immediately to south of Cobalt's Block 21 which contains the play opening Cameia field
• Given remote location and water depth, Wood Mackenzie estimates will require 300mmbbl to be commercial on standalone basis

Liberia, Cote d'Ivoire - Anadarko's non-commercial wells

• Anadarko wells in West Africa all encountered non-commercial oil
• Liberia: Iroko-1 and Timbo-1
• Cote d'Ivoire: Morue-1
• http://www.anadarko.com/SiteCollectionDocuments/PDF/Operations%20Reports/APC%203Q14%20Ops%20Report%2010-28-14.pdf

Nigeria - NNPC pre-empts sale of OML25

• NNPC has pre-empted on the sale of OML25
• Post transaction, NNPC will own 100% and likely transfer the interest to NPDC
• NPDC's portfolio is already overstretched and future investment will be heavily constrained
• The winning bidder of the Shell, Eni, Total process was Crestar Integrated Natural Resources Limited
• It is believed that the pre-emption, a decision made by the Minster of Energy, is due to Crestar's Chairman being  Osten Olorunsola
• The Minister of Energy had fired Osten Olorunsola as Director of Petroleum Resources in June 2013
• http://africaoilgasreport.com/2014/11/farm-in-farm-out/nnpc-in-desperate-search-for-funds-to-pay-for-oml-25/

South Sudan - fighting likely to intensify around fields

• Government and rebels now re-arming following end of rainy season
• Sudan is providing South Sudanese Machar-led rebels with weapons and intelligence
• Rebels likely to set-up bases where they can attack oil fields
• Local self defence militia are guarding fields bolstered by Chinese peacekeepers
• Should prevent rebels gaining control of fields, but fighting likely to intensify

East African export pipeline

• World bank has pledged USD600mm funding towards Ugandan/Kenyan export pipeline
• Total cost estimated to be >USD4bn
• Project still remains in early stages - commercial structure, construction, ownership and operations all yet to be determined
• FEED contracts expected to be awarded end of 2014

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