Eland Oil & Gas buys 40% stake in Nigerian oil field

15th Aug 2014 15:25

Eland Oil & Gas has increased its presence in Nigeria after acquiring a 40% stake in the Ubima Field for $40m (£24m), the company announced on Friday.Once the authorities have ratified the deal, Eland will pay Allgrace, the company which currently owns the field, $7m as signature payment, with an extra $3m in the form of a production bonus.Ubima, based in the northern part of the Rivers State, is estimated to host reserves worth about £34m barrels of oil."The acquisition of Ubima is a very attractive deal for Eland on very positive terms," said the group's chief executive Leslie Blair."As the technical and financial partner we will be able to lead the development and move quickly to bring these assets into early production generating strong cash-flow for the benefit of all stakeholders."Four wells were drilled in Ubima between the 1960s and 1980s and hydrocarbons were discovered in each of the reservoirs.Ubima is close to a pipeline owned by Shell and Eland has already asked the Anglo-Dutch company to use the infrastructure.Eland shares were down 3.10% to 86p at 14:45 on Friday.DC