Eland Oil & Gas PLC Annual Report and Financial Statements 2014 Eland Oil & Gas PLC Annual Report and Financial Statements 2014
oil & gas
Annual Report and Financial 
Statements 2014  Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
1
Eland is an 
AIM-listed 
independent 
oil and gas 
company 
focused on 
production and 
development 
in West Africa, 
particularly 
the highly 
prolific Niger 
Delta region of 
Nigeria. Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
2
Highlights
Operational Highlights
See page 10 on
Market Overview for more detail
81.4
*
mmbbl (gross) 2P Reserves
Opuama and  
Gbetiokun Fields
33.4
*
mmbbl (gross) 2C Resources
Polobo and  
Abiala Fields
 + The results of the reserves and 
resources evaluation by NSAI of OML 
40 demonstrate a best estimate 
prospective resources increase of 
113%, as compared to the previous 
CPR.
 + Total lifting of 115,722 bbls of crude oil 
in 2014. Elcrest completed the loading 
and sale of 95,290 bbls gross of crude 
oil in the four months to 30 April 2015.
 + Successful recommissioning of 
existing infrastructure and re-opening 
of two existing wells in the Opuama 
field.
* Source: Netherland Sewell & Associates Inc. June 2014.
** Source: Independent Report by AGR TRACS July 2014.
 + So far the OML 40 Joint Venture has 
achieved a 90% uptime of facilities and 
pipeline during 2015.
 + Acquisition in August 2014 of a 40% 
interest in the Ubima field onshore Nigeria 
with Eland acting as the technical and 
financial partner. Gross 2C resource 
estimates of 33.9 mmbbl of oil.**
 + In May 2015, Elcrest received consent 
from the Ministry of Petroleum Resources 
for Elcrest’s appointment as operator of 
OML 40. The DPR has advised the 
Nigerian National Petroleum Corporation 
(“NNPC”) to proceed with the finalisation 
of the Joint Operation Agreement.
 + Cash and cash equivalents balance of 
$15.0 million at 31 December 2014.
 + In 2014 the Group sold 115,722 bbls  
of crude oil, generating revenue of 
$11.7 million for the year (2013: nil).
 + The consolidated loss for the year was 
$16.3 million compared with $26.1 
million for 2013.
 + A Reserve Based Lending (RBL) facility 
of up to $75 million was signed with 
Standard Chartered Bank to fund 
development of OML 40. $35 million 
has been committed and syndication of 
the remaining $40 million has already 
commenced.
 + The granting of Pioneer Tax status to 
Elcrest in respect of OML 40 on 1 May 
2014 under which Elcrest will be exempt 
from paying Petroleum Profits Tax for an 
initial three year term which can then be 
extended by a further two years on 
successful application. This is expected 
to result in a significant increase in cash 
flows and NPV.
Ubima Field acquired in August 2014
33.9
**
mmbbl (gross) 2C Resources
Ubima Field
Financial Highlights
See page 24 on
Financials for more detail
OML 40 in Nigeria is Eland’s core asset Strategic Report
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
3
Strategic Report
Outlook
See page 8 on
Investing in Eland for more detail
 + The well re-entry and workover opportunities on Opuama 5 have been 
evaluated and are included within the 2015 work programme. The first 
operations are planned for Q2 2015. The well is expected to have the potential 
to produce between 400-600 bopd gross and in its lifetime is expected to 
produce 1.1 to 1.3 mmbbls gross.
 + Commence a seven well development drilling programme on the Opuama 
field to develop the 2P reserves. Each new well is expected to produce 4,500 
– 5,500 bopd gross.
 + Expected 2015 year-end gross production exit rate from OML 40 of 
approximately 12,000 bopd gross.
 + The Company is seeking to increase its current $35 million committed debt 
facility to $75 million through syndication.
 + Continue with cost reduction programme to reduce operating expenses and 
maximise capital expenditure investment for 2015.
Contents
Work Programme
2015 2016
Q2 Q3 Q4 Q1 Q2 Q3
OML 40
OML 40
West
Opuama 5  
Workover
Opuama Development  
Drilling Programme
OML 40
East
Gbetiokun 
Development
OML 40
Infrastructure
Sectional 
Replacement 
on Export 
Pipeline (4km)
Replacement  
Export 
Pipeline
Ubima
Ubima Ubima 1 
Re-entry
Ubima
Development
Development Drilling
Well Re-entry
Facilities & Pipelines
Ubima Development
Strategic Report
Highlights 2
Outlook 3
Eland at a Glance 4
A Year of Progress 6
Investing in Eland 8
Market Overview 10
Chairman’s Statement 12
Chief Executive Officer’s Report 14
Strategy in Action 16
Financial Review 24
Key Performance Indicators 26
Corporate Social Responsibility 27
Principal Risks and Uncertainties 28
Governance
Board of Directors 30
Senior Management 32
Directors’ Report 34
Corporate Governance Report 35
Directors’ Responsibility Statement 37
Directors’ Remuneration Report 38
Financial statements
Independent Auditor’s Report 41
Consolidated Income Statement 42
Consolidated Statement of  
Comprehensive Income 43
Consolidated Balance Sheet 44
Company Balance Sheet 45
Consolidated Statement of  
Changes in Equity 46
Company Statement of  
Changes in Equity 47
Consolidated Cash Flow Statement 48
Company Cash Flow Statement 49
Notes to the Financial Statements 50
Other Information
Forward-looking Statements 73
Shareholder Information 74
Directors and Advisors 75
Glossary 76 Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
4
Warri
OML 40
Bayelsa
Port Harcourt
Imo
Onitsha
Ubima
Eland at a Glance
Eland is focused on building and developing a portfolio 
of producing upstream oil and gas assets in West Africa.
In September 2012, the Company 
completed the acquisition of a 45% equity 
stake in OML 40 and listed the Company on 
AIM, part of the London Stock Exchange.
Since its foundation the Company has 
assembled an experienced Board and 
management team with extensive  
in-country experience and successful track 
records in acquiring and developing oil and 
gas interests. The Eland team has a 
particular focus on development within 
Nigeria and other locations in West Africa.
Eland’s core assets are the OML 40 licence 
and the Ubima field, both onshore Nigeria. 
The Group acquired a 40% participating 
interest in Ubima in August 2014.
Our Assets
Ubima Field
 + The licence area is 64.57km
2
, located 
onshore in the northern part of Rivers 
State and has been carved out of OML 
17, which is operated by Shell Petroleum 
Development Company.
 + Gross 2C resource estimates of 33.9 
mmbbl of oil.**
 + Significant upside gross 3C resource 
estimate of 66.9 mmbbl of oil with an 
extra gross 2C resource estimate of 97.0 
Bcf of non-associated gas.***
 + The Ubima field has 3D seismic coverage 
(1997) and four wells have been drilled in 
the field between the 1960s and 1981.
 + Hydrocarbons were encountered in all 
four wells in multiple stacked reservoirs. 
OML 40
The OML 40 licence is situated within the
Niger Delta, approximately 75km northwest
of Warri and covers an area of 498km
2
. 
The environment in OML 40 consists of 
shoreline and coastal mangrove swamps. 
The region is lightly populated with 
indigenous groups living in dispersed 
riverine communities mainly from the Ijaw 
and Itsekiri ethnic groups.
Oil production was re-started in February 
2014 from two existing wells in the Opuama
field. Oil is exported via the Shell-operated
Trans Escravos Pipeline network running
from the Opuama field south along the
coastline to the Forcados Oil Terminal.
The OML 40 licence area, of 498km
2
, holds 
gross 1P reserves of 38.7 mmbbls, gross 2P 
reserves of 81.4 mmbbls, gross 2C 
contingent resources of 41.2 mmbbls  
and a best estimate of 254.5 mmbbls of 
gross unrisked prospective resources.*
* Source: Netherland, Sewell & Associates Inc. June 2014.
** Source: Independent Report by AGR TRACS July 2014.
*** Source: Company estimates. Strategic Report
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
5
2013
75.2
1
2014
2012 7.0
2013 119.4
254.5 2014
2012 27.2
45.4
2013
75.2
1
2014
2012 7.0
2013 119.4
254.5 2014
2012 27.2
45.4
Gross Contingent Resources mmbbl***
Unrisked Gross Prospective Oil Resources mmbbl***
Facts
Abuja, Nigeria
Our operational management team is  
based in Abuja. From there we manage  
our operations and work together closely 
with our partners in OML 40, NPDC and 
Starcrest as well as our Ubima partner,  
All Grace Energy Ltd.
Aberdeen, Scotland
Our Head Office is located in Aberdeen 
where our Technical, Finance and Human 
Resources teams are based.
London, England
After listing on AIM we opened the London 
office in early 2013. 
Office Locations
1 Total Gross Contingent Resources include 33.9 mmbbl that 
correspond to the Ubima field* Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
6
A Year of Progress
Significant progress has 
been made on our path 
to development in OML 
40 and in exploration 
activity.
2014 saw a sustained chain of achievements 
for Eland. In 2014 Eland established its 
position as an oil producing company with 
revenues of $11.7 million as a direct result of 
the successful development strategies 
executed on the assets. 
The responsible management of our 
finances has allowed us to leverage our 
resources to move from the traditional equity 
funding into a more diversified source of 
investment through debt.
This year has seen the growth of our 
portfolio of assets with the acquisition of 
Ubima which expands our 2C contingent 
resources by 33.9 mmbbls gross (13.6 
mmbbl net).
Elcrest received consent from the Ministry  
of Petroleum Resources for Elcrest’s 
appointment as operator of OML 40. The 
Company now has the opportunity to 
control its operations more efficiently.
First Oil and Operational Consistency
Oil Sales, Revenue and Pioneer Status
Oil production from the Opuama field initially 
re-started in February 2014 through the 
successful recommissioning of existing 
infrastructure and sustained production 
commenced in the autumn of 2014. Average 
production for producing days in 2014 was 
3,338 bopd gross.
 + Rehabilitation work on the flowstation.
 + Repair of the 8” and 10” sections of the 
export pipeline which make up the first 
12km of the export pipeline as well as the 
24km-long final 12” section leading to the 
custody transfer point at Otumara.
 + Re-opening of existing wells Opuama 1 
and Opuama 3 (dual completion).
 + Replacement of the three flowlines of the 
start-up wells. These flowlines were 
trenched and overlaid with protective 
concrete mats at major water crossings.
 + During 2014, Elcrest sold a total of 
115,722 bbls of crude oil for an average 
price of $101 per barrel. 
 + Group revenue was $11.7 million for 2014 
(2013: nil).
 + Elcrest received approval in May 2014 of 
Pioneer Tax status on the OML 40 licence 
under which Elcrest will be exempt from 
paying Petroleum Profits Tax for an initial 
three year term which can be extended 
by a further two years on successful 
application. The incentive results in a 
material rise in the value of the reserves, 
increasing the NPV per net 2P barrel by 
over 75%.
 + In the four months to 30 April 2015, 
Elcrest completed the loading and sale of 
95,290 bbls. Strategic Report
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
7
 + During 2014 the Company completed 
the conditions precedent to access 
the $22 million Bridge loan. As of 31 
December 2014, a Reserve Based 
Lending facility of up to $75 million 
was executed with Standard 
Chartered Bank to fund development, 
with $35 million committed initially. 
Post-year end, $10 million has been 
drawn to fund the early stages of this 
year’s work programme.
 + The marketing and syndication of the 
remaining $40 million has begun and 
commitments are expected by the end 
of Q2 2015.
 + Access to the RBL facility will provide 
greater flexibility and optionality with 
regard to the work programme 
allowing the full funding of our current 
plans.
 + 2C resource estimate of 33.9 mmbbl 
gross of oil.*
 + Significant upside 3C resource 
estimate of 66.9 mmbbl gross of oil 
and 97.0 gross Bcf of non-associated 
gas.**
 + As Ubima’s technical and financial 
partner we will be able to lead the 
development of our assets.
 + The proposed export pipeline will be 
tied into an existing pipeline network.
Financing
Ubima Purchase
During 2014, Eland entered the debt stage 
of financing which was a turning point for the 
Company. Against a background of lower 
crude prices where financing is more 
difficult, being able to achieve an RBL 
commitment re-asserts the value of our 
assets.
In August 2014, Eland purchased a 40% 
interest in Ubima. The licence area is 65km
2
, 
located onshore in the northern part of 
Rivers State and has been carved out of 
OML 17, which is operated by Shell 
Petroleum Development Company.
Other Key Events
 + In February and March 2014 Eland 
exercised the full balance of options 
under the Solstice Option Agreement and 
Helios Option Agreement at 100 pence 
per share, resulting in cash proceeds 
during 2014 of $33.3 million.
 + The results of the new CPR as of 30 June 
2014 demonstrate a material increase in 
the value to Eland of the reserves and 
resources of OML 40 as compared with 
the previous report. The new report takes 
into account the Pioneer Tax incentive 
granted in May 2014.
 + During the year we increased our 
technical staff compliment with a view to 
accelerating the development of our 
assets.
* Source: Independent Report by AGR TRACS July 2014.
** Source: Company estimates. Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
8
Investing in Eland
We are now generating 
cash from OML 40 
which together with the 
Pioneer tax incentive 
granted in 2014 and the 
current and anticipated 
debt facility means we 
expect to be fully 
funded for our current 
plans.
Attractive tax status on OML 40 -  
no Petroleum Profits Tax for an initial 
three year term which can be 
extended by a further two years on 
successful application:
 + Significantly increasing free cash flow 
from OML 40 through development 
drilling.
 + Incentivises further investment and 
accelerated development of OML 40.
 + Creates potential for dividend in short to 
medium term.
 + In combination with a lower cost 
environment means our expected 
average netback per barrel remains 
positive even in the current economic 
outlook of low oil prices.
Increased production phase:
 + Total liftings in 2014 amounted to 115,722 
bbls of crude oil and total liftings for the 
four months to 30 April 2015 amounted 
to 95,290 bbls.
 + During this same period successful 
re-commissioning of existing 
infrastructure lead to 100% uptime of 
facilities and pipeline. However, due to a 
planned maintenance shutdown in 
January of the Trans Escravos Pipeline by 
SPDC, overall average production uptime 
was over 90%.
Ubima acquisition:
 + Net contingent resources increased by 
13.6 mmbbl in 2014.
 + Excellent resource base with significant 
upside potential of 66.9 mmbbl gross 3C 
resources.*
OML 40 – greenfield core asset:
 + Significant, only partly developed, reserve 
base with outstanding upside of 41.2 
mmbbl gross 2C resources and 254.5 
mmbbl gross best estimate prospective 
resources.
Development plan funded through 
own cash flow supported by current 
and anticipated debt facilities with 
no requirement for further 
equity funding:
 + Cash generative asset producing over 
3,000 bopd (net 1,350 bopd).
 + The Group executed an RBL facility of up 
to $75 million in December 2014 with 
Standard Chartered Bank to fund 
development.
 + $35 million has been committed initially 
and the remaining $40 million is expected 
to be syndicated by the end of Q2 2015.
 + Leverage opportunity to develop other 
assets, increase production rates and 
significantly enhance cash flow.
*  Source: Company estimates.
Producing company with significant 
growth potential Strategic Report
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
9
Increase production
Commence development drilling programme utilising debt facility
Maximise oil and gas reserves
Strong focus on bringing remaining reserves and contingent resources into 
production through a balanced work programme
Potential upside
Converting OML 40 leads into prospective resources through further 3D seismic 
acquisition, detailed studies and drilling exploration wells
Positioned to secure further opportunities
Structured to secure assets with a low entry cost and enhance value through expert 
knowledge and development
Increasing shareholder value
Our Growth Strategy
OML 40 gross best estimate 
prospective resources
254.5
mmbbl (gross)
Cash generative asset  
currently producing
3,000
bopd gross
Executed RBL facility up to 
$75
million
Petroleum Profits Tax of
0%
at least until May 2017 Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
10
 + Nigeria became a member of the 
Organization of the Petroleum Exporting 
Countries (OPEC) in 1971, more than a 
decade after oil production began in the 
oil-rich Bayelsa State in the 1950s*. 
 + Nigeria has the largest oil and gas 
reserves in Sub-Saharan Africa and is a 
major oil supplier to the United States*.
 + According to the BP Statistical Review of 
World Energy 2014, Nigeria has an 
estimated 37.1 billion barrels of proved 
crude oil reserves as of January 2015. 
 + Nigeria is geologically low risk with 
exceptional exploration and production 
opportunities.
 + Nigeria produces mostly light, sweet 
crude oil of which the majority is exported 
to global markets.
 + Forcados blend trades at a premium to 
Brent.
 + Numerous undeveloped fields exist within 
Nigeria creating an opportunity for 
partnership with indigenous companies.
 + Reservoir properties and the oil recovery 
rates (50% +) are considered to be 
amongst the best in the world.
 + 3D seismic, stacked reservoirs and 
deviated wells offer a very high chance of 
success (typically 75-90%).
 + Large established pipeline network with 
third party access and export 
infrastructure with available capacity.
Nigeria is Africa’s largest 
oil producer and one of 
the largest in the world.
Market Overview
2.3
mmbbl
mmbbl
of oil produced per day
1,000
fields, with majority not yet in production
*Source: Energy Information Administration. Strategic Report
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
11
Reserves
37.1
billion bbls
Nigeria
1.5
billion bbls
Sudan
1.5
billion bbls
Chad
3.5
billion bbls
South Sudan
1.7
billion bbls
Equatorial Guinea
2.0
billion bbls
Gabon
1.6
billion bbls
Congo Brazzaville
12.7
billion bbls
Angola
Source: BP Statistical Review of World Energy 2014. Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
12
Chairman’s Statement
I am pleased to present 
Eland’s annual report for 
2014 after what has 
been a volatile year for 
the sector but one in 
which we have made 
significant headway.
Following a near halving of the oil price our 
industry is facing major challenges, but I 
remain confident that we have the assets and 
a management team that can deliver value to 
our shareholders. We have continued to 
make good progress on OML 40 and we look 
forward to development drilling later this year.
The focus over the last year has been to 
stabilise production and this has been 
successfully achieved. In December 2014 
production ‘uptime’ was over 90% which 
compares to 6.2% for the first six months of 
production. In 2015 to the end of April, we 
have recorded 100% ‘uptime’ apart from 
short periods when our off-taker Shell 
carried out maintenance work on their 
connected facilities which has taken the 
average to 91%. This accomplishment has 
been achieved by working more effectively 
with the indigenous operator (NPDC) and the 
local communities. We have also secured 
Pioneer Tax Status for OML 40 giving us a 
100% Petroleum Profits tax concession for 
an initial three years with a further two years 
on successful application. This concession 
gives Eland a great incentive to accelerate 
the production revenue from OML 40 which 
is expected to be achieved through drilling 
later this year. We have commenced a 
workover of the shut-in well Opuama 5 
which we expect to add between 400-600 
bopd (gross) to the field’s production. During 
the year we also farmed in to the Ubima field 
(OML 17) which adds a minimum of 13.6 
mmbbls of net 2C resources to our assets 
which we expect to increase as we add 
finance to the operations. We are presently 
undertaking the technical work on the field 
with the intention of drilling in 2016.
At the end of 2014 Eland completed a  
‘Reserve Based Lending’ (RBL) facility of up 
to $75 million – a significant achievement 
given the oil price environment and a vote of 
confidence from Standard Chartered Bank 
in the Company and its assets. $35 million of 
the facility was committed immediately and 
the balance is expected to be syndicated in 
the coming months. The financial 
performance for 2014 (a loss of $16.3 million) 
reflects operating costs associated with the 
start-up of production but also includes oil 
sales of 115,722 bbls which generated $11.7 
million of revenue. With production 
stabilised, and hopefully growing as new 
wells are drilled, we can expect increased 
sales revenues and lower unit operating 
costs for 2015. At the end of 2014 our cash 
and cash equivalents were $15.0 million with 
undrawn bank facilities comprising a $22 
million Bridge loan facility, which was 
subsequently replaced by the RBL.
Harry Wilson
Chairman Strategic Report
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
13
During 2014 the management team was 
strengthened by the appointment of George 
Maxwell as Chief Executive Officer and 
Louis Castro as Chief Financial Officer. I 
agreed to assume the role of Executive 
Chairman for a temporary period while the 
new team settled in. We have also added to 
the technical team with the appointment of 
John Downey as Chief Technical Officer and 
the recruitment of new technical staff all 
based in Aberdeen. I would like to thank our 
former CEO Les Blair for his contribution to 
the development of Eland over the last four 
years. He remains an adviser to the Group in 
a role where his knowledge of Nigeria and 
energy can add most value. I would also like 
to thank all of our stakeholders for their 
support, particularly the management and 
staff for their hard work over the last year.
Nigeria has the largest oil reserves of all 
countries in Sub-Saharan Africa but is 
significantly under-represented by junior oil 
companies like Eland as the entry hurdles 
are perceived to be too large. We have seen 
an increasing number of indigenous 
companies participating in recent years and 
I believe this trend will continue. Nigeria has 
also just elected a new President and we 
expect this to be positive for the upstream 
sector. Eland is well placed to grow in this 
environment with its experienced 
management and a relatively strong financial 
position. Very recently we have had 
confirmation from the Department of 
Petroleum Resources that Elcrest has met 
all of the obligations required in order to be 
appointed as operator of OML 40. We see 
this as a significant step forward which will 
enable us to accelerate the unlocking of 
value in OML 40. Our plan is to drill at least 
two new wells this year and complete two 
workovers all of which should push 2015 
year-end production up to 12,000 bopd 
(gross). We look forward to being able to 
deliver further positive news on the 
development of OML 40 that shareholders 
are awaiting.
Harry Wilson
Chairman
21 May 2015
“The focus over the 
last year has been to 
stabilise production 
and this has been 
successfully achieved. 
In December 2014 our 
production ‘uptime’ 
was over 90% which 
compares to 6.2% for 
the first six months of 
production.”
Expertise
Experienced management team with 
over 40 years of in-country experience
Track record
A team with a history of success in 
identifying and developing oil and 
gas assets
Fantastic asset
Significant development and exploration 
upside on OML 40 as well as attractive 
growth opportunities in Nigeria
Maximised 
production
Our Business Model
Local footprint
Operational senior management based 
in Nigeria with strong relationships and 
local knowledge Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
14
Chief Executive Officer’s Report
George Maxwell
Chief Executive Officer
Eland has had a strong 2014, from first oil in 
February, the award of Pioneer Tax status on 
OML 40 in May, acquiring a second Nigerian 
asset, the Ubima field, in August and ending 
the year with over 90% production uptime in 
December. This level of production 
consistency has continued into 2015 with 
near-continuous production from December 
through the end of April, with only planned 
maintenance of seven days on the Shell Trans 
Escravos Pipeline (TEP) resulting in any 
downtime. 
Management Change
During this year we also saw a change in 
management as I moved into the Chief 
Executive role and Les Blair moved aside to 
focus on in-country strategy and key 
interfaces. This was a natural progression as 
the Company moved from an acquisition 
and building phase towards asset 
development. The changing landscape in 
the Nigerian oil & gas sector has seen a rise 
in the number of independents, and more 
recently further divestments by Shell and 
Chevron and we anticipate this process of 
divestitures by the IOC’s to continue in 2015 
and beyond.
Eland remains well placed to take advantage 
of opportunities as they arise and during this 
time we will continue to expand our 
production in country.
Eland, from its formation 
in 2010, has been focused 
on building a portfolio of 
upstream oil and gas 
assets in West Africa, 
particularly in Nigeria. In 
September 2012, we 
completed the acquisition 
of the initial part of that 
portfolio when the Group 
acquired a 45% equity 
interest in OML 40, 
through a special purpose 
vehicle, and listed the 
Company on AIM.
Completion of Rehabilitation Work 
and Commencement of First Oil
In February 2014 we commenced 
production from the Opuama field following 
the completion of flowstation and pipeline 
repairs. Initial production rates of 3,500 
bopd were achieved from two wells 
(Opuama 1 and 3), with crude oil delivered to 
the Forcados terminal and sold through an 
off-take agreement with Shell Western 
Supply and Trading Limited.
We encountered a number of challenges 
relating to the flow station and pipeline 
integrity. These issues caused numerous 
production interruptions from February 
through August and in addition there was  
a significant delay due to the shut down of 
the Forcados terminal in March and April of 
last year.
During 2014 we significantly improved the 
integrity of the pipeline. This contributed to 
the improved level of uptime we have 
experienced over the past 5 months. Strategic Report
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
15
Pioneer Tax Status
In May 2014 our local company Elcrest 
Exploration and Production Nigeria Ltd 
(“Elcrest”) was awarded Pioneer Tax status 
for OML 40. This will run for an initial three 
year term until May 2017 with an opportunity 
to extend for an additional two years on 
successful application. This provides an 
excellent incentive for investment in our 
asset. OML 40 is an underdeveloped asset 
of 498km
2
, with the Opuama field in 
production and the Gbetiokun field awaiting 
development. In addition from our most 
recent analysis we determine over 75 drilling 
targets within the licence, which we plan to 
exploit over the coming five years. The tax 
incentive allows the re-investment into OML 
40 to accelerate the growth.
Ubima
In August 2014 we acquired a 40% interest 
in the Ubima field, located onshore in the 
Niger Delta, just north of Port Harcourt. The 
agreement allows Eland the opportunity to 
operate the field as technical and finance 
partner to All Grace Energy Ltd (“All Grace”) 
which holds and retains a 60% equity 
interest. The addition of this asset to our 
portfolio was a key development and 
highlighted the benefit of having a strong 
presence in-country. The field currently has 
an estimated 33.9 mmbbls gross contingent 
resources and we have already commenced 
detailed sub-surface work, an environmental 
impact assessment on the development 
plan and land surveys. Further work is 
planned in Q4 of 2015.
Funding our Operations
During 2014 we met all of the conditions 
precedent required to access our $22 million 
bridge loan facility with Standard Chartered 
Bank. The debt remained undrawn until 
expiry in February 2015, and at the end of 
2014 we completed and signed a four and a 
half year Reserve Based Lending facility of 
up to $75 million, again with Standard 
Chartered Bank. $35 million of the facility 
has initially been committed by Standard 
Chartered and a further $40 million is 
expected to be syndicated by the end  
of Q2 2015. 
Work Programme and Budget
The Work Programme and Budget for 2014 
had originally focused on re-commencing 
production followed by an initial drilling 
campaign in Opuama. The inconsistency of 
production delayed access to our debt 
facility, resulting in a delay to the programme. 
During this time we re-evaluated workover 
opportunities. In Q4 of 2014 we reviewed 
three potential workover possibilities, 
Opuama 4, 5 and 7. The conclusion of this 
evaluation resulted in a change to our 2015 
work programme, where we included both 
Opuama 5 and 7 into the programme. These 
two workovers are in addition to the planned 
two new wells (Opuama 8 and 9) due to 
commence in Q3 2015. We are currently 
working on Opuama 5 and expect to have 
the well in production during Q2 of 2015.
The experience gained repairing the 
infrastructure during 2014 has provided 
sufficient detail on the pipeline condition 
enabling us to delay the line replacement. 
This was originally planned for 2015, 
however, given the current infrastructure 
performance we plan only sectional 
replacements of the line, if required. This has 
allowed the Company to direct the majority 
of its capex programme towards revenue-
generating capex, being the two workover 
wells and two new producing wells.
We are currently completing an evaluation of 
available drilling rigs with a view to completing 
this selection in Q2 2015 with a contract award 
for drilling to commence in Q3 2015.
The re-entry of Ubima 1 well is planned for 
late Q4 2015/early Q1 2016, subject to 
securing the rig contract and completion of 
the subsurface studies.
Health, Safety, Environment and 
Social Responsibility
We, in conjunction with our partners, NPDC 
and All Grace, work closely with our host 
communities and consult with them on all 
major aspects of work we undertake. This 
includes carrying out full risk assessments 
and environmental impact surveys and also 
providing the host communities employment 
opportunities through local contracting. 
This has been successful in Opuama, where 
a number of community contracts have 
been awarded which have contributed to the 
successful production from this field in 2014. 
We have a number of community programmes 
planned in 2015 and 2016, including two water 
wells, a civic centre and hospital all within OML 
40. We currently support some communities 
with power through the use of diesel 
generators. In 2016 we plan to convert these 
to gas-fired generators utilising the gas 
produced at Opuama and further reducing the 
volume of gas flared. These key areas of 
medical care, drinking water and power for 
communities remain our key focus areas in 
addition to creating employment opportunities.
Outlook
In recent times the oil and gas industry has 
faced some significant challenges. In Eland 
we are not immune to these. We have 
focused on our cost base, targeting over 
$8 million of opex and G&A savings within 
2015 alone. We have prepared our work 
programme and budget on the basis of a 
$50/bbl Brent oil price, with a sensitivity at 
$40/bbl. We can maintain our full capex 
work programme at the $50/bbl price deck, 
and to date the majority of our crude oil 
sales in 2015 have been well above this 
price. Our industry is well experienced in 
dealing with oil price fluctuations and this 
experience is key to maintaining a plan to 
ensure a positive contribution from every 
barrel produced. We have excellent assets in 
OML 40 and Ubima which provide an 
incredible growth opportunity, even at 
current oil price levels.
Following the recent approval of transfer of 
operatorship to Elcrest by the DPR, we are in 
discussions with our partner NPDC to assume 
the operatorship of OML 40. This process is 
well underway and we fully expect to 
announce the formal transfer of operatorship, 
through the execution of a new operating 
agreement on OML 40, in the near future.
Eland has come a long way since its 
inception in 2010. I am very excited at the 
opportunity to continue this development 
progress in the coming years.
George Maxwell
Chief Executive Officer
21 May 2015 Opuama Flowstation
Opuama N
Obagnoro N
Obagnoro 
Tebu
Amakubu W
Ugbo N
Ugbo
Old Nana Town N
Old Nana Town
Ugbo E Ebrohimi
Adagbassa 
Creek
ADAG-001
Polobo E
Amobe
Tsekelewu N
Tsekelewu NE
Polobo
Abiala N
Abiala NE
Abiala
Abiala S
Dudu Town E
Dudu Town
Gbetiokun
West
Tongarafa
Gbetiokun
Discoveries
(Contingent Resources)
Oil Fields
(Reserves)
Prospects
(Prospective Resources)
Leads
(Based on 2D and not yet 
included in ﬁgures for 
Prospective Resources)
Exploration Well (Discovery)
Polobo Exploration POLB-001
UGBO-001
AMAK-001
TONG-001
GBET-001
ABIA-001
Dry/Abandoned Well
Opuama Export Pipeline
Gas ﬁeld
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
16
Strategy in Action
OML 40 is a world-class asset with production,  
booked oil reserves, an export pipeline and plentiful 
contingent and prospective resources.
A Portfolio in a Licence
The OML 40 licence currently produces light 
oil with low GOR and has a very strong 
aquifer drive which contribute to high 
ultimate recoveries.
Partnerships
The OML 40 partnership successfully 
re-commenced initial oil production from the 
Opuama field in February 2014 through 
the re-commissioning of the existing 
infrastructure and the re-opening of two 
existing wells and sustained production 
commenced in the autumn of 2014.
Reserves
OML 40’s booked reserves are found in 
Opuama in the western, and Gbetiokun in 
the eastern, part of the licence. Our primary 
contingent resources lie in the Polobo and 
Abiala fields and in addition there are 
numerous prospects and leads across the 
whole of the OML 40 licence.
*Source: Netherland, Sewell & Associates Inc. June 2014. Opuama Flowstation
Opuama N
Obagnoro N
Obagnoro 
Tebu
Amakubu W
Ugbo N
Ugbo
Old Nana Town N
Old Nana Town
Ugbo E Ebrohimi
Adagbassa 
Creek
ADAG-001
Polobo E
Amobe
Tsekelewu N
Tsekelewu NE
Polobo
Abiala N
Abiala NE
Abiala
Abiala S
Dudu Town E
Dudu Town
Gbetiokun
West
Tongarafa
Gbetiokun
Discoveries
(Contingent Resources)
Oil Fields
(Reserves)
Prospects
(Prospective Resources)
Leads
(Based on 2D and not yet 
included in ﬁgures for 
Prospective Resources)
Exploration Well (Discovery)
Polobo Exploration POLB-001
UGBO-001
AMAK-001
TONG-001
GBET-001
ABIA-001
Dry/Abandoned Well
Opuama Export Pipeline
Gas ﬁeld
Strategic Report
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
17
Proved (1P)
Opuama Reserves
31.8
Proved + Probable (2P)
54.1
71.0
Proved + Probable + Possible (3P)
Proved (1P)
Gbetiokun Reserves
6.9
Proved + Probable (2P)
27.4
33.8
Proved + Probable + Possible (3P)
Proved Reserves (1P)
OML 40 Reserves
Proved + Probable Reserves (2P)
30.9
Proved + Probable + Possible (3P)
16.4
25.3
Highlights
 + Licence area of 498km
2
, located in the 
Niger Delta, approximately 75km 
north-west of Warri.
 + Gross 2P oil reserves of 81.4 mmbbl (net 
25.3 mmbbl) are found in the Opuama 
and Gbetiokun fields.*
 + 115,722 bbls of crude oil sold  
in 2014.
 + Primary gross contingent resources 
amount to 41.2 mmbbl. Polobo and 
Abiala together total 33.4 mmbbl (gross).*
 + Crude from Opuama is transported via a 
dedicated export line injected into the 
Trans Escravos pipeline network.
OML 40 Reserves*
Net Oil Reserves (mmbbl) Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
18
Proved (1P)
Opuama Reserves
31.8
Proved + Probable (2P)
54.1
71.0
Proved + Probable + Possible (3P)
Proved (1P)
Gbetiokun Reserves
6.9
Proved + Probable (2P)
27.4
33.8
Proved + Probable + Possible (3P)
Proved Reserves (1P)
OML 40 Reserves
Proved + Probable Reserves (2P)
30.9
Proved + Probable + Possible (3P)
16.4
25.3
Proved (1P)
Opuama Reserves
31.8
Proved + Probable (2P)
54.1
71.0
Proved + Probable + Possible (3P)
Proved (1P)
Gbetiokun Reserves
6.9
Proved + Probable (2P)
27.4
33.8
Proved + Probable + Possible (3P)
Proved Reserves (1P)
OML 40 Reserves
Proved + Probable Reserves (2P)
30.9
Proved + Probable + Possible (3P)
16.4
25.3
Strategy in Action -  
OML 40 Reserves
Opuama
Gbetiokun
Overview
Gbetiokun is located 63km north-west  
of Warri on the boundary of OML 40 and 
OML 49, which is operated by Chevron. The 
field is known as Gbetiokun in OML 40 
whilst a small extension of the field in OML 
49 is called Bime.
The field was discovered by well Gbetiokun 
1 in 1987 and presently four wells have been 
drilled on the structure.
A total of 20 hydrocarbon reservoirs have 
been identified in the Gbetiokun field. The 
crude is generally characterised as being 
low viscosity, under-saturated, with API 
gravities of about 40°.
PVT samples were taken in the discovery 
well and the results of the PVT analysis have 
indicated the presence of good quality oil. 
The reservoirs are similar to those found in 
Opuama and it is considered very likely that 
they will have moderate to strong
aquifer drive.
Highlights
 + Detailed geological studies, 
supplemented with development studies, 
are being used to prepare a Field 
Development Plan (FDP). The field is 
planned to be produced through an early 
production facility which contains 
equipment needed for oil treatment, 
pumping and gas compression. A 30km 
wet crude export pipeline is planned to 
join the Opuama - Otumara export 
pipeline system.
 + The latest appraisal well, Gbetiokun 2,  
was drilled in August 1991 on the  
western flank of the field where it found  
significant extensions of reservoirs 
discovered by well Gbetiokun 1.
Overview
The Opuama field was discovered in 1972 
and a total of 12 hydrocarbon reservoirs 
have been identified. The reservoirs contain 
light sweet crudes with API gravities ranging 
from 47.5˚ in the shallow reservoirs to 37.8˚ in 
the deep and saturated reservoirs. There 
has been very little pressure depletion over 
the 30+ years of production, which indicates 
a strong aquifer support leading to very high 
ultimate oil recoveries.
The oil production from the Opuama wells is 
received at the Opuama flowstation where it 
is, after initial treatment, pumped via the 
Otumara manifold into the Shell-operated 
Trans Escravos Pipeline network to the 
Forcados Oil Terminal.
Highlights
 + Opuama 1, more than 30 years after first 
production, is still producing over 1,700 
bopd without showing any significant 
production decline.
 + New wells on Opuama are expected to 
deliver high flow rates and high oil 
recoveries through accurate well placing 
as a result of modern 3D seismic imaging 
and modern drilling techniques.
 + Wells 
1
 and 
3
 initial gross production 
totalling over 3,500 bopd gross.
 + Re-entry potential on wells 
5
 & 
7
.
 + Each new well is expected to produce 
4,500 to 5,500 bopd gross.
 + Seven wells are planned, including five 
deviated well with dual completion and 
two horizontal wells with single 
completion.
 + Oil recovery factors of well beyond 50% 
are expected as the highly permeable 
Opuama reservoirs contain very light oil 
sustained by a strong water-drive.
 + Average recovery factor of 40% as 
presently assumed in the NSAI CPR 
creates potentially, in the medium and 
long term, a material upward reserves 
revision opportunity.
Opuama
Gross Oil Reserves (mmbbl)*
Gbetiokun
Gross Oil Reserves (mmbbl)*
*Source: Netherland, Sewell & Associates Inc. June 2014. Strategic Report
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
19
Producing wells
Closed-in wells and potential workover candidates
New development wells
Abandoned wells
1
2
3
4
5
6
7
8 9 10 11 12 13 14
Flow Station
Terminal
Manifold
OML 40 Pipeline
Chevron Pipeline
Shell Pipeline
Custody Transfer Point
Escravos Terminal
Forcados Terminal
OML 40
OML 49
Chevron
OML 43
SPDC
OML 45
SPDC
Olero
OtumaraM/F
Opuama
Opuekeba
Opuama M/F
Polobo Abiala
Gbetiokun
Amobe
Opuama Gross 2P Oil Reserves
54.1*
mmbbl
Opuama Highlights
Discovered: 1972
Gross 2P reserves: 54.1 mmbbl*
Location: 92km NW of Warri
Reservoir Depth: 7,600 – 8,900ft
Gbetiokun Highlights
Discovered: 1987
Gross 2P reserves: 27.4 mmbbl*
Location: 63km NW of Warri
Reservoir Depth: 4,500 – 10,000ft
Gbetiokun Gross 2P Oil Reserves
27.4*
mmbbl Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
20
Low Estimate (1C)
Polobo Contingent Resources
8.6
Best Estimate (2C)
17.4
23.2
High Estimate (3C)
Low Estimate (1C)
Ubima Contingent Resources
19.4
Best Estimate (2C)
33.9
40.4
High Estimate (3C)
Low Estimate (1C)
Abiala
5.2
Best Estimate (2C)
16.1
74.8
High Estimate (3C)
Low Estimate (1C)
Amobe
15.3
Best Estimate (2C)
78.4
340.1
High Estimate (3C)
Low Estimate (1C)
OML 40 gross unrisked
80.3
Best Estimate (2C)
254.5
772.4
High Estimate (3C)
2012
OML 40 Gross Best Estimate
27.2
2013
119.4
254.5
2014
Low Estimate (1C)
Polobo Contingent Resources
8.6
Best Estimate (2C)
17.4
23.2
High Estimate (3C)
Low Estimate (1C)
Ubima Contingent Resources
19.4
Best Estimate (2C)
33.9
40.4
High Estimate (3C)
Low Estimate (1C)
Abiala
5.2
Best Estimate (2C)
16.1
74.8
High Estimate (3C)
Low Estimate (1C)
Amobe
15.3
Best Estimate (2C)
78.4
340.1
High Estimate (3C)
Low Estimate (1C)
OML 40 gross unrisked
80.3
Best Estimate (2C)
254.5
772.4
High Estimate (3C)
2012
OML 40 Gross Best Estimate
27.2
2013
119.4
254.5
2014
Strategy in Action –  
OML 40 Contingent Resources
Polobo Overview
Abiala Overview
 + The Polobo discovery was made in 1972 
based on 2D seismic.
 + The Polobo discovery well was drilled to 
a depth of 9,712ft. Oil was found over a 
96ft thick interval. RFT tests confirmed 
the presence of under-saturated oil with 
an API gravity of 47°.
 + Following the acquisition of 3D seismic, 
Polobo has been upgraded to an exciting 
contingent resource.
 + Polobo is just 11km north-west of the 
Opuama flowstation and could be quickly 
tied into existing facilities.
 + An appraisal well is planned in the near 
future and, if successful, provides the 
opportunity for an accelerated 
development with production through  
the Opuama flowstation.
 + The Abiala discovery was made in 1989 
and is located in the north-east of OML 40 
near the northern boundary of the licence.
 + Using 3D reprocessed seismic data in 
2009 it became clear that the Abiala 
discovery well had crossed a fault 
between the Abiala North and Abiala 
South blocks, effectively proving up 
further potential in both fault blocks.
 + Total hydrocarbon intervals identified in 
the well are five in Abiala North and 10 in 
Abiala South.
 + Abiala has significant near-field potential 
which will need to be appraised. Future 
development wells will be designed to 
capture all the reservoirs within a 
particular fault block, whilst pilot holes 
will be drilled and plugged back as a 
cheap and efficient way of exploring the 
near-field prospective upside.
Polobo
Gross Contingent Resources (mmbbl)*
Abiala
Gross Contingent Resources (mmbbl)*
There are five more discovered fields in OML 40 apart from Opuama and Gbetiokun, 
the largest being Polobo and Abiala. As these fields and near field upside is further 
appraised and developed they are expected to result in a significant increase in total 
reserves.
*Source: Netherland, Sewell & Associates Inc. June 2014. Strategic Report
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
21
Low Estimate (1C)
Polobo Contingent Resources
8.6
Best Estimate (2C)
17.4
23.2
High Estimate (3C)
Low Estimate (1C)
Ubima Contingent Resources
19.4
Best Estimate (2C)
33.9
40.4
High Estimate (3C)
Low Estimate (1C)
Abiala
5.2
Best Estimate (2C)
16.1
74.8
High Estimate (3C)
Low Estimate (1C)
Amobe
15.3
Best Estimate (2C)
78.4
340.1
High Estimate (3C)
Low Estimate (1C)
OML 40 gross unrisked
80.3
Best Estimate (2C)
254.5
772.4
High Estimate (3C)
2012
OML 40 Gross Best Estimate
27.2
2013
119.4
254.5
2014
Low Estimate (1C)
Polobo Contingent Resources
8.6
Best Estimate (2C)
17.4
23.2
High Estimate (3C)
Low Estimate (1C)
Ubima Contingent Resources
19.4
Best Estimate (2C)
33.9
40.4
High Estimate (3C)
Low Estimate (1C)
Abiala
5.2
Best Estimate (2C)
16.1
74.8
High Estimate (3C)
Low Estimate (1C)
Amobe
15.3
Best Estimate (2C)
78.4
340.1
High Estimate (3C)
Low Estimate (1C)
OML 40 gross unrisked
80.3
Best Estimate (2C)
254.5
772.4
High Estimate (3C)
2012
OML 40 Gross Best Estimate
27.2
2013
119.4
254.5
2014
Low Estimate (1C)
Polobo Contingent Resources
8.6
Best Estimate (2C)
17.4
23.2
High Estimate (3C)
Low Estimate (1C)
Ubima Contingent Resources
19.4
Best Estimate (2C)
33.9
40.4
High Estimate (3C)
Low Estimate (1C)
Abiala
5.2
Best Estimate (2C)
16.1
74.8
High Estimate (3C)
Low Estimate (1C)
Amobe
15.3
Best Estimate (2C)
78.4
340.1
High Estimate (3C)
Low Estimate (1C)
OML 40 gross unrisked
80.3
Best Estimate (2C)
254.5
772.4
High Estimate (3C)
2012
OML 40 Gross Best Estimate
27.2
2013
119.4
254.5
2014
Gross Unrisked Prospective Resources 
(mmbbl)*
Strategy in Action –  
OML 40 Prospective Resources
The new Competent Person’s Report (CPR) as of 
June 2014 provided by Netherland, Sewell & 
Associates Inc. (NSAI) demonstrates a significant 
increase in OML 40’s prospective resources.
Since acquisition the Company has purchased additional off-block well data as well as 
reprocessing 3D seismic on the western flank of the licence block.
The latest CPR takes into account this analysis and as a result the total best estimate gross 
prospective resources show an increase of 113.7% compared to the previous report. 
In the western area of OML 40 the prospects are Amobe, Polobo South and Opuama North. 
In addition, a number of deep turbidite plays have been identified, namely Adagbassa Deep, 
Polobo Deep, Abiala Deep, and Gbetiokun Deep, but these studies are too immature to carry 
prospective resources and require further detailed studies.
Amobe
 + Amobe is one of the largest prospects 
with a gross best estimate of 78.4 
mmbbl and a gross high estimate of 
340.1 mmbbl prospective resources.
 + In the eastern areas of OML 40 there 
are a large number of prospects 
covered by 3D seismic surveys.
OML 40 Gross Unrisked 
Prospective Resources 
(mmbbl)*
OML 40 Gross Best 
Estimate Prospective Oil 
Resources (mmbbl)* Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
22
The Ubima Field licence area is 65km
2
, located 
onshore in the northern part of Rivers State. It has 
been carved out of OML 17 which is operated by 
Shell Petroleum Development Company.
Ubima Highlights
 + 40% interest in the Ubima Field acquired 
from All Grace Energy Limited in August 
2014.
 + Initial farm-in fee of $7 million; contingent 
production bonus of $3 million payable 
following production of 2,000 bopd gross 
over a thirty day period.
 + Eland is entitled to 88% of production 
cash flow from Ubima field until costs 
have been recovered.
 + The Company will be the Technical and 
Financial Partner on the field 
development and production operations.
Ubima Opportunity
 + 2C resources of 39.9 mmbbl gross.*
 + Well appraised field with four wells drilled: 
Ubima 1, 2, 3 and 4. 
 + Licence fully covered by 3D seismic 
which was acquired in 1997 over target 
reservoirs, covering 64% of the total area. 
 + Work programme capex includes the 
drilling of four wells, field processing 
facilities and an export pipeline to the 
SPDC oil export infrastructure.
 + Excellent infrastructure with nearby 
roads, airport and oil & gas pipelines. 
Low entry cost for land based operations 
using conventional technology.
 + Significant upside 3C resource estimate 
of 66.9 mmbbl gross of oil with an extra 
2C resource estimate of 97.0 Bcf gross of 
non-associated gas.**
Ubima Development Plan
 + New wells on Ubima are expected to 
deliver high flow rates and high oil 
recovery through accurate well placing as 
a result of state of the art 3D seismic 
imaging and modern drilling techniques.
 + The proposed export pipeline will be tied 
into the existing pipeline network and oil 
will be exported via the Bonny Terminal.
Strategy in Action –  
Ubima
* Source: Independent Report by AGR TRACS July 2014.
** Source: Company estimates. Strategic Report
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
23
NIGERIA
1
3
2
4
5 0 5 10km
OML 17
OML 16 OML 53
OML 58
OML 22
Plugged oil well
Plugged oil and gas well
Plugged gas well
Scale
Ubima Field
Ubima Contingent Gross 
Resources*
mmbbl
Ubima Highlights
Discovered: 1964
Gross 2P contingent resources: 33.9 mmbbl
Location: 14km North of Port Harcourt
Reservoir Depth: 5,000 – 5,400ft
Low Estimate (1C)
Polobo Contingent Resources
8.6
Best Estimate (2C)
17.4
23.2
High Estimate (3C)
Low Estimate (1C)
Ubima Contingent Resources
19.4
Best Estimate (2C)
33.9
40.4
High Estimate (3C)
Low Estimate (1C)
Abiala
5.2
Best Estimate (2C)
16.1
74.8
High Estimate (3C)
Low Estimate (1C)
Amobe
15.3
Best Estimate (2C)
78.4
340.1
High Estimate (3C)
Low Estimate (1C)
OML 40 gross unrisked
80.3
Best Estimate (2C)
254.5
772.4
High Estimate (3C)
2012
OML 40 Gross Best Estimate
27.2
2013
119.4
254.5
2014
* Independent Report by AGR TRACS July 2014. Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
24
Financial Review
Louis Castro
Chief Financial Officer
“At the turn of the year 
the Company executed 
a Reserve Based 
Lending facility of up 
to $75m with Standard 
Chartered Bank in 
spite of difficult market 
conditions and a falling 
oil price.”
Key Strengths
 + Cash generative asset producing over 
3,000 bopd gross (1,350 bopd net) and 
selling at a premium to Brent.
 + Strong banking and off-take relationships.
 + Extensive reserves and resources 
which will produce further capacity to 
fund the future development of the 
Group’s assets.
 + Supportive shareholder base.
Key Financial Highlights
The consolidated loss for the year was $16.3 
million compared with $26.1 million for 2013, 
with consolidated revenue of $11.7 million 
(2013: nil) from the sale of 115,722 barrels of 
crude oil.
The signing of a Reserve Based Lending 
(‘RBL ’) facility with Standard Chartered Bank 
(‘SCB’) with $35 million committed initially, to 
be syndicated to $75 million.
The exercise of options by Eland during the 
year which raised $33.3 million in total from 
two of its major shareholders, Helios Natural 
Resources Limited (‘Helios’) and Solstice 
International Investments Inc. (‘Solstice’).
The granting of pioneer tax status to Elcrest 
in respect of OML 40 on 1 May 2014 under 
which Elcrest will be exempt from paying 
Petroleum Profits Tax for an initial three year 
term which can then be extended by a 
further two years on successful application.
Review of 2014
The consolidated loss for the year was $16.3 
million, with consolidated revenue of $11.7 
million, consolidated operating expenses of 
$18.2 million and consolidated administrative 
expenses of $8.8 million. First oil was 
achieved in early February 2014 through the 
re-opening of two existing wells at Opuama, 
which stabilised at an initial production rate 
of some 3,500 bopd gross (1,575 bopd net) 
and has since declined to 3,000 bopd gross 
(1,350 bopd net), a lower than anticipated 
decline rate. Continued prolonged 
interruptions to production were 
experienced right through until September 
2014 which had the effect of reducing 
potential revenue and increasing operating 
expenses per barrel.
Since September 2014, downtime has 
reduced considerably with a subsequent 
enhancement in performance. In total, the 
Group sold 115,722 barrels of crude oil 
during 2014, and of these, 98,942 barrels 
were produced between September and 
December 2014. Uptime has continued to 
improve post year-end, and in the first four 
months of 2015, the Group has produced 
114,084 barrels in spite of the natural decline 
in bopd noted above.
Operating expenses of $18.2 million were 
recorded after a net adjustment amounting 
to $6.0 million representing the revision by 
management of estimated amounts due to a 
service provider for logistical and general 
support services for which no invoices have 
been received by the Group since 2011 (see 
note 5). Strategic Report
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
25
During 2014, based on consolidated 
operating expenses of $24.2 million (before 
the net adjustment noted above) and 
production of 113,502 barrels, the 
consolidated opex per barrel amounted to 
$213. However, this was heavily influenced 
by the long interruptions to production, such 
that by the final month of 2014 as 
production uptime improved, consolidated 
opex per barrel was running at $63. 
During 2015, as we deliver on our planned 
well programme and increase production, 
consolidated opex per barrel costs are 
expected to fall sharply to $21 by the final 
quarter and $16 during the final month in 
2015, with further subsequent reductions 
forecast during 2016.
Administrative expenses of $8.8 million 
during 2014 were broadly in line with the 
$8.4 million incurred in 2013. We have 
targeted over $8 million of opex and G&A 
savings within 2015 alone. 
Finance costs amounted to $1.5 million 
during 2014 and related principally to the 
costs of the Bridge loan which was 
extended to the Company by SCB until 
replacement by the RBL.
The Group’s consolidated balance sheet, 
with an overall increase in net assets of 
$18.5 million as at 31 December 2014, 
reflects the commencement of initial 
production and both the investment in the 
forthcoming development of OML 40 and 
the acquisition of a 40% share in Ubima.
Consolidated current assets rose to $19.8 
million from $8.0 million, principally as a 
result of higher cash and cash equivalents 
of $15 million at the year end.
Consolidated current liabilities increased by 
$18.1 million, which comprise principally the 
amounts due on capital and other 
expenditure on OML 40, including 
expenditure on the rehabilitation of the 
Opuama flow station, the costs of dredging 
required ahead of the forthcoming drilling 
programme and fabrication costs of a 
metering system for Opuama crude export.
At the turn of the year the Company 
executed an RBL facility of up to $75 million 
with SCB in spite of difficult market 
conditions and a falling oil price. The RBL 
has a maturity of four and a half years, is 
repayable semi-annually from September 
2016 and has a margin of 7.75% over US$ 
Libor. SCB has committed $35 million of the 
facility and will act as lead arranger for the 
syndication of the remaining $40 million.
Also during 2014, the Company exercised 
the full balance of options with Helios and 
Solstice which yielded $33.3 million. The 
combination of the cash from these options, 
the cash being generated by the Group’s 
existing producing wells and the availability 
of the RBL facility is expected to enable the 
Group to execute the planned work 
programme on its assets.
The Group began the year with consolidated 
cash and cash equivalents of $3.8 million 
and finished the year with $15.0 million 
having raised $33.3 million from the exercise 
of the options mentioned above. The cash 
was invested as to a net $6.0 million in 
operations and $15.9 million on enhancing 
the Group’s assets, including $7.0 million on 
the acquisition of a 40% interest in Ubima, a 
participating interest in a marginal field 
acquired in August 2014, and, $3.9 million for 
the award of pioneer tax status on OML 40 in 
May 2014.
2015 Financial Outlook
The Company has recently drawn down  
its first $10 million from the RBL and will be 
applying it to the commencement of its 
planned work programme for 2015. The 
immediate focus on the finance side will  
be to extend the facility to the full $75 million 
syndicated amount which will, along with 
cash flows from operations, be applied to 
accelerate development of the Opuama  
field and grow the Company’s net 
production to our desired 2015 exit rate  
and beyond.
Louis Castro
Chief Financial Officer
21 May 2015
Key Strengths
Key Financial Highlights
 + The Group loss for the year was  
$16.3 million compared with  
$26.1 million for 2013, with revenue  
of $11.7 million (2013: nil) from the 
sale of 115,722 barrels of crude oil.
 + The signing of a Reserve Based 
Lending facility with Standard 
Chartered Bank (‘SCB’) with  
$35 million committed initially,  
to be syndicated to $75 million.
 + The granting of pioneer tax status to 
Elcrest in respect of OML 40 on  
1 May 2014 under which the 
Company will be exempt from paying 
Petroleum Profits Tax for an initial 
three year term which can then be 
extended by a further two years on 
successful application.
 + Cash generative asset producing over 
3,000 bopd gross (1,350 bopd net) 
and selling at a premium to Brent.
 + Strong banking and off-take 
relationships.
 + Extensive reserves and resources 
which will produce further capacity to 
fund the future development of the 
Group’s assets.
 + Supportive shareholder base. Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
26
Financial
Production
Gross 1P Oil Reserves 
(mmbbl)
Gross 2P Oil Reserves 
(mmbbl)
Gross 3P Oil Reserves 
(mmbbl)
Gross 2C Oil Resources 
(mmbbl)
Net Annual Production
(bopd)
Revenue 
(US$ million)
EBITDA* 
(US$ million)
Cash Flow (before Capex) 
(US$ million)
2013
2014
38.9
38.7
Gross 1P Oil Reserves
2013
2014
81.6
81.4
Gross 2P Oil Reserves
2013 Actual
2014 Actual
0
113,502
Gross Average Barrels Per Day
Revenue
2013 Actual
2014 Actual
0
93
Opex Per Barrels
2013
2014
105.1
109.8
Gross 3P Oil Reserves
2013
2014
44.9
41.2
Gross 3C Oil Resources
0
2014 Actual
2013 Actual
11.7
Cashﬂow
(13.3)
2014 Actual
2013 Actual
(6.0)
EBITDA
2013 Actual (24.7)
2014 Actual (13.4)
2013
2014
38.9
38.7
Gross 1P Oil Reserves
2013
2014
81.6
81.4
Gross 2P Oil Reserves
2013 Actual
2014 Actual
0
113,502
Gross Average Barrels Per Day
Revenue
2013 Actual
2014 Actual
0
93
Opex Per Barrels
2013
2014
105.1
109.8
Gross 3P Oil Reserves
2013
2014
44.9
41.2
Gross 3C Oil Resources
0
2014 Actual
2013 Actual
11.7
Cashﬂow
(13.3)
2014 Actual
2013 Actual
(6.0)
EBITDA
2013 Actual (24.7)
2014 Actual (13.4)
2013
2014
38.9
38.7
Gross 1P Oil Reserves
2013
2014
81.6
81.4
Gross 2P Oil Reserves
2013 Actual
2014 Actual
0
113,502
Gross Average Barrels Per Day
Revenue
2013 Actual
2014 Actual
0
93
Opex Per Barrels
2013
2014
105.1
109.8
Gross 3P Oil Reserves
2013
2014
44.9
41.2
Gross 3C Oil Resources
0
2014 Actual
2013 Actual
11.7
Cashﬂow
(13.3)
2014 Actual
2013 Actual
(6.0)
EBITDA
2013 Actual (24.7)
2014 Actual (13.4)
2013
2014
38.9
38.7
Gross 1P Oil Reserves
2013
2014
81.6
81.4
Gross 2P Oil Reserves
2013 Actual
2014 Actual
0
113,502
Gross Average Barrels Per Day
Revenue
2013 Actual
2014 Actual
0
93
Opex Per Barrels
2013
2014
105.1
109.8
Gross 3P Oil Reserves
2013
2014
44.9
41.2
Gross 3C Oil Resources
0
2014 Actual
2013 Actual
11.7
Cashﬂow
(13.3)
2014 Actual
2013 Actual
(6.0)
EBITDA
2013 Actual (24.7)
2014 Actual (13.4)
2013
2014
38.9
38.7
Gross 1P Oil Reserves
2013
2014
81.6
81.4
Gross 2P Oil Reserves
2013 Actual
2014 Actual
0
113,502
Gross Average Barrels Per Day
Revenue
2013 Actual
2014 Actual
0
93
Opex Per Barrels
2013
2014
105.1
109.8
Gross 3P Oil Reserves
2013
2014
44.9
41.2
Gross 3C Oil Resources
0
2014 Actual
2013 Actual
11.7
Cashﬂow
(13.3)
2014 Actual
2013 Actual
(6.0)
EBITDA
2013 Actual (24.7)
2014 Actual (13.4)
2013
2014
38.9
38.7
Gross 1P Oil Reserves
2013
2014
81.6
81.4
Gross 2P Oil Reserves
2013 Actual
2014 Actual
0
113,502
Gross Average Barrels Per Day
Revenue
2013 Actual
2014 Actual
0
93
Opex Per Barrels
2013
2014
105.1
109.8
Gross 3P Oil Reserves
2013
2014
44.9
41.2
Gross 3C Oil Resources
0
2014 Actual
2013 Actual
11.7
Cashﬂow
(13.3)
2014 Actual
2013 Actual
(6.0)
EBITDA
2013 Actual (24.7)
2014 Actual (13.4)
2013
2014
38.9
38.7
Gross 1P Oil Reserves
2013
2014
81.6
81.4
Gross 2P Oil Reserves
2013 Actual
2014 Actual
0
113,502
Gross Average Barrels Per Day
Revenue
2013 Actual
2014 Actual
0
93
Opex Per Barrels
2013
2014
105.1
109.8
Gross 3P Oil Reserves
2013
2014
44.9
41.2
Gross 3C Oil Resources
0
2014 Actual
2013 Actual
11.7
Cashﬂow
(13.3)
2014 Actual
2013 Actual
(6.0)
EBITDA
2013 Actual (24.7)
2014 Actual (13.4)
2013
2014
38.9
38.7
Gross 1P Oil Reserves
2013
2014
81.6
81.4
Gross 2P Oil Reserves
2013 Actual
2014 Actual
0
113,502
Gross Average Barrels Per Day
Revenue
2013 Actual
2014 Actual
0
93
Opex Per Barrels
2013
2014
105.1
109.8
Gross 3P Oil Reserves
2013
2014
44.9
41.2
Gross 3C Oil Resources
0
2014 Actual
2013 Actual
11.7
Cashﬂow
(13.3)
2014 Actual
2013 Actual
(6.0)
EBITDA
2013 Actual (24.7)
2014 Actual (13.4)
Key Performance Indicators
The Group has outlined 
below the Key 
Performance Indicators 
which are used to provide 
an understanding of the 
development and 
performance of the 
business.
The Group established an initial with NSAI 
reserves and resources base for OML 40 in 
2013. This position was re-evaluated 
through detailed study and seismic re-
processing during 2014. The results are 
shown in the graphs alongside for both 
reserves and resources and are compared 
to the 2014 position.
These indicators highlight the increase in the 
net reserves and resources base in the
business.
Included within the production section is a
cost control metric over produced volume.
This is measured as operating expenses per
barrel of oil produced. The key target is to
improve the efficiency of production with
lower operating costs per unit.
The key financial metrics for the business
include comparison for Revenue, EBITDA*
and Cash Flow (before Capex).
The tables alongside show the comparison  
between 2013 and 2014 Actual 
performance.
Reserves and Resources
*  EBITDA: Operating loss adjusted for depreciation and amortisation. Strategic Report
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
27
Corporate Social Responsibility
We take our responsibilities to all of our 
stakeholders seriously and see this as key to 
holding a licence to operate.
Health and Safety
We conduct our activities to international 
health and safety standards and do our 
utmost to provide a safe 
working environment for our employees 
and contractors.
Environment
We aim to minimise our impact on our local 
environment, using water and energy 
prudently, recycling waste and planning our 
oil and gas developments responsibly.
Business Ethics
We believe that personal and business 
integrity is an essential part of delivering a 
strong financial performance and we 
expect our employees to operate to a high 
ethical standard.
Human Resources
Our employees are at the heart of our business 
and we take our responsibilities for their 
welfare, training and development seriously.
Communities
We are working closely with the local 
communities in which our operations are 
located to ensure that they benefit and 
participate in our strategy for growth. Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
28
Principal Risk Detail Mitigation
Exploration & 
Appraisal Risk
The Group’s strategy is driven by the acquisition, exploration 
and development of oil and gas assets in Nigeria. There are 
risks inherent in exploration and development of oil & gas 
reserves and resources. Appraisal results of discoveries are 
also uncertain. Exploration, appraisal and development 
activities, involving the drilling of wells within a field, may be 
unpredictable and may not result in the outcome planned, 
targeted or predicted. Only by extensive testing can the 
properties of the entire field be understood.
The Group has a very experienced management team with 
considerable technical experience in Nigeria.
The technical programmes and budgets are the responsibility 
of the Technical & Reserves Committee of the Board and a 
rigorous review process is undertaken by the committee when 
reviewing and approving the work programmes.
Corporate 
Governance &  
Ethical Conduct
The Group operates in West Africa and in Nigeria in particular. 
Nigeria is one of the highest ranking countries in the OECD 
table for risk of bribery and corruption.
The Group has introduced a Code of Conduct manual which 
provides for full compliance and transparency throughout the 
Group’s operations and has obtained membership of the QCA.
Plans are in place to introduce a full programme of compliance 
and training for the UK Bribery Act and the US FCPA.
Environmental Risks Pollution arising from drilling and/or production operations, 
which could result in loss of reputation, financial loss and the 
risk of loss of life due to process or equipment failure.
The Group operates on an industry best practice basis for all 
drilling and production operations. The Group performed a full 
EIA on OML 40 prior to the acquisition and prior to any 
remedial work being undertaken on existing facilities in OML 
40. The Group has developed a system and process to plan 
drilling operations with all contractors and suppliers prior to 
arrival at each well location. 
Health & Safety A significant event could impact the reputation of the 
Group and/or the safety of the Group’s employees and 
contractors. The Group operates in Nigeria which has 
experienced incidents of robbery and kidnap in recent 
years.
The Group performs a full security review and risk assessment 
for each permanent and temporary location in which it 
operates. The Group also fully engages with the host 
communities in which it operates to minimise the risk to 
employees and equipment in these areas. The Group has a 
detailed security plan in place for each site and these plans are 
continually reviewed as the risk levels change. A risk 
management plan is prepared for each project prior to any 
active operations.
Loss of Key 
Employees
Loss of key individuals could cause a delay or have an 
adverse impact on the Group’s plans and operations.
The Group has a competitive compensation package that is 
reflective of market conditions for these key roles and is 
constantly under review as conditions change. The Group 
operates a long-term incentive plan for key employees. The 
Group has also undertaken a succession planning review of 
these key roles.
Oil Price A significant fluctuation in the oil price could have an impact 
on the Group’s plans and expected returns.
The Group is focused on effective working capital 
management to ensure that programmes and plans are 
achieved. These plans are under constant review and will be 
delivered to the extent that sufficient liquidity is maintained 
within the Group.
The Directors are responsible for the effectiveness of the Group’s risk management activities and internal control processes. As a participant 
in the upstream oil and gas industry, the Group is exposed to a wide range of risks in the conduct of its operations. 
A summary of the Group’s key risks as identified by the management are outlined within this report together with the mitigation plans 
currently employed by the Group. The responsibility for risk review and management remains a function of the full Board.
The process of risk management is continually reviewed by the Board and management and complies with the practice as set out in the 
Quoted Companies Alliance (‘QCA’) guidelines.
This section on Principal Risks and Uncertainties should be read in conjunction with the critical accounting judgments and 
estimates which are set out in note 3 to the Financial Statements.
Principal Risks and Uncertainties Strategic Report
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
29
Principal Risk Detail Mitigation
Community 
Relations
Host communities could cause disruption to operations and 
adversely impact production.
The Group works closely with all host communities to ensure 
that engagement is achieved at all levels. Agreements with 
host communities are in place or under negotiation to ensure 
harmonious working relationships. The Group is also 
committed to a number of community related projects to 
enhance the wellbeing of these host communities.
Production 
Operations
Production operations involve risks common to the industry, 
including oil spills, pipeline disruption, explosions, fires, 
equipment damage or failure and natural disasters. In the 
event that any of these occur, environmental damage, injury 
to persons and loss of life or failure to produce oil could result.
The Group employs an experienced management team with 
a proven track record in managing oil and gas production 
and drilling operations throughout West Africa and in 
particular in Nigeria. Contingency plans are in place to allow 
oil production to continue should there be a prolonged 
disruption to the producers, facilities, pipeline or other 
disruptions impacting oil evacuation.
Failure to obtain 
financing in the 
future could 
materially adversely 
impact the 
performance of the 
Group
The Group’s business necessarily involves significant capital 
expenditure. If the Group is required to invest further capital in 
pursuit of additional opportunities, it may need to seek further 
external debt or future equity financing. There is no guarantee 
that such additional financing, if required, will be available on 
acceptable terms at the relevant time. Furthermore any 
additional debt financing may involve restrictive covenants, 
which may limit or affect the Group’s operating flexibility.
The Group currently has access to sufficient cash resources 
and debt to commence the development of OML 40. Full 
syndication of the existing debt facility is required to fully 
exploit the 2P resources within the planned time frame. 
However, should such debt sources be unavailable to the 
Group, the 2P resources can still be fully developed albeit in a 
much extended time frame. The Group remains focused on 
new opportunities and will review and evaluate these 
opportunities in line with the funding available to pursue these 
ventures at the appropriate time.
Licensing and other 
regulatory 
requirements
The Group’s direct and/or indirect intended future 
operations may be subject to petroleum leases, licences, 
production sharing contracts, regulations and approvals of 
governmental authorities for exploration, development, 
construction, operation, production, marketing, pricing, 
transportation and storage of oil, taxation, and 
environmental and health and safety matters. The Group 
cannot guarantee that such documents applied for will be 
granted or, if granted, will not be subject to potentially 
onerous conditions. Any changes to licences, regulations 
and approvals, or their availability to the Group or its 
associated companies may adversely affect the Group’s 
assets, plans, targets or projections. In particular, in relation 
to the Group’s OML 40 licence, the licence has a current 
expiry date of 2019, which is extendable upon successful 
application.
The Group’s activities and operations are subject to various 
rules, regulations, laws and custom in all countries in which we 
are present. The Group always will remain compliant with 
these rules, laws and regulations when undertaking its 
activities and works to respect local customs in these areas. 
The Group has employed a highly skilled team to manage the 
activities and mitigate any negative impact such changes in 
rules, laws, regulations or customs may have on existing or 
future operations. In particular, in relation to OML 40, in line 
with the licence agreement, the Group has an option to 
request an extension of up to 20 years on the OML 40 licence 
at the current licence expiry date of June 2019, at additional 
cost, provided the terms of OML 40 have been complied with. 
There is precedent for extension of licences in Nigeria and 
management believe it is more likely than not that an extension 
of the licence to 2026 can be obtained.
Increase in drilling 
costs and the 
availability of drilling 
equipment
The oil and gas industry historically has experienced periods 
of rapid cost increases. Increases in the cost of exploration 
and development may affect the Group’s ability to invest and 
to purchase or hire equipment, supplies and services. In 
addition, the availability of drilling rigs and other equipment 
and services is affected by the level and location of drilling 
activity around the world. An increase in drilling operations 
outside the Group’s intended area of operations may reduce 
the availability of equipment and services to the Group and to 
the companies with which it operates. The reduced availability 
of equipment and services may delay the Group’s ability, 
directly or indirectly, to exploit reserves and adversely affect 
the Group’s operations and profitability.
The Group’s management is constantly monitoring the market 
situation with regard to drilling equipment and services. The 
opportunities to exploit existing assets rely upon securing the 
necessary rigs, equipment and services in a timely manner. 
The Group has also initiated a number of remedial action plans 
to provide additional opportunities to secure equipment and 
services if these are not available in the market within a 
reasonable time frame.
Fiscal changes Changes in fiscal terms could adversely impact the Group’s 
operations and profitability.
The Group’s management reviews all proposed changes to 
fiscal terms in the areas in which it operates and actively 
participates in industry forums to promote transparency and 
inward investment in the area of operations.
On behalf of the Board
Louis Castro
Chief Financial Officer
21 May 2015 Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
30
A N A N TR
Board of Directors
George Walter Mitchell Maxwell
Chief Executive Officer
Louis Castro
Chief Financial Officer
Harry Wilson
Chairman
Robert Lambert
Non-Executive Director
George has over 20 years of 
oil industry experience in both 
the producing and service/
manufacturing arena. He was 
Business Development Manager for 
Addax and, prior to this, Commercial 
Manager in Geneva. George joined 
Addax in 2004 and held the General 
Manager’s position in Nigeria, 
responsible for finance, fiscal and 
commercial activities.
Prior to this, George worked with 
ABB Oil & Gas as vice president 
of finance based in the UK with 
responsibilities for Europe and 
Africa. He held a similar position 
in Houston, from where the 
organisation ran its operations in 
10 countries. George was Finance 
Director in Singapore for Asia Pacific 
and Middle East, handling currency 
swaps and minimising exposures 
during the Asian financial crisis of 
the late 1990s.
George graduated from Robert 
Gordon University in Aberdeen with a 
Masters in Business Administration. 
George was appointed to the 
Board in September 2009 and was 
appointed as Chief Executive Officer 
in September 2014.
Louis has over 25 years of corporate 
finance and broking experience, in 
the UK and overseas, during which 
time he has been responsible for a 
number of oil, gas and mining IPOs 
and capital raisings.
Louis was previously Managing 
Director of Northland Capital Partners 
in London and before this he was 
head of corporate finance at Matrix 
LLP and at Insinger de Beaufort. 
Prior to this Louis spent eight years 
at Williams de Broe, six years at 
Price Waterhouse and three years 
at SG Warburg. He has widespread 
international expertise, having 
advised the boards of companies 
worldwide, including in the oil & gas, 
mining, and energy sectors.
Louis is a Fellow of the Institute of 
Chartered Accountants in England 
and Wales and graduated with a 
BSc & BComm (Hons) in Engineering 
Production & Economics from 
Birmingham University. He was 
appointed to the Board in August 
2012 and was appointed as Chief 
Financial Officer in September 2014.
Harry has over 35 years of 
international experience in upstream 
oil and gas initially as an explorer 
with British Petroleum and then as 
the founder and Chief Executive 
Officer of several independent oil 
companies. During this period, 
he led listings for four companies 
and has been a director of public 
companies both in the UK and 
abroad across a number of sectors.
Harry graduated with a BSc Hons in 
Physics from Manchester University 
and attended the Insead Business 
School in France. Harry was 
appointed to the Board as Chairman 
in May 2010.
Bob has over 45 years of upstream 
oil and gas experience. He is 
currently Deputy Chairman of TSX-V 
listed Mitra Energy Inc and is the 
founder of London-based Ipex 
Energy Ltd. From May 2011 to April 
2015, he was President & CEO of 
TSX-V listed Petra Petroleum Inc 
and, before that, he was CEO of 
GB Petroleum Ltd, a London-based 
private international exploration 
company that he founded and 
managed for just over five years. 
Prior to GB Petroleum, Bob enjoyed 
a successful 25 year career with 
Conoco Inc. Bob has broad multi-
disciplinary experience in Exploration, 
Business Development and 
Corporate Management with a wide 
international exposure in North Africa, 
West Africa, Middle East, Southeast 
Asia, Australia and the USA. 
Bob is a petroleum geoscientist 
by profession and he has an 
MBA (with Distinction) from the 
University of Aberdeen. He is a 
Chartered Geologist and Fellow of 
the Geological Society of London. 
Bob was appointed to the Board as 
Senior Independent Non-Executive 
Director in August 2012. Governance
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
31
N R TR R TR
A
Audit committee
R Remuneration committee
N Nomination committee
TR
Technical and  
Reserves committee
A R
Russell Harvey
Non-Executive Director
Richard Norris
Non-Executive Director
Henry Turcan
Non-Executive Director
Russell has over 40 years of 
diversified experience in the upstream 
oil and gas business. He started 
his career with Philips Petroleum 
in Texas and Norway and has held 
executive positions with Kerr McGee 
Oil, a leading US independent where 
he was responsible for properties in 
the UK, Norway and the Middle East. 
Russell was Managing Director of 
Lasmo North Sea from 1991 to 1996.
Russell has broad international 
experience, and has experience in 
the development of a number of 
startup exploration, production and 
service companies both in the UK 
and internationally.
Russell has a BSc in Mechanical 
Engineering from Imperial College 
and is a member of the Institute of 
Energy. Russell was appointed to the 
Board as Independent Non-Executive 
Director in August 2012.
Dr Richard Norris has over 25 years 
of oil and gas experience and is 
currently Upstream Adviser to Helios 
Investment Partners. In his early 
career, Richard held the position of 
Reservoir Engineer at Elf Aquitaine, 
subsequently Total, covering 
upstream operations, reserves, new 
ventures and economic strategy 
over a ten-year period in France 
and Angola. Later he established 
the Technical Director role at BNP 
Paribas in its European oil and gas 
structured finance group. More 
recently he was General Operations 
Manager for Geopetrol and 
subsequently in 2010–2011 Richard 
was CEO and President of the TSX-
listed Candax Energy.
Richard holds a PhD in Petroleum 
Engineering and an MSc in 
Petroleum Geology from Imperial 
College London as well as a BSc in 
Geology. Richard was appointed to 
the Board as Non-Executive Director 
in September 2014.
Henry has worked in the financial 
services sector since 1996, with 
a focus on equity capital markets. 
In 2006 he established Novum 
Securities, an independent 
stockbroking business focused on 
UK-listed securities. Prior to Novum 
Securities, Henry was a director at 
Evolution Securities where he led 
and oversaw numerous transactions, 
both private and public across many 
sectors.
Henry graduated with an MA 
(Hons) in Modern Languages 
from Edinburgh University and is a 
Member of the Securities Institute. 
Henry was appointed to the Board 
as Non-Executive Director in January 
2015. Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
32
Senior Management
Leslie Blair
Founder and Strategic Adviser
Pieter van der Groen
Chief Operating Officer
Les has over 30 years of upstream oil and gas 
industry experience, most recently with Addax. He 
spent 13 years with Addax in Nigeria and Kurdistan 
holding a wide variety of senior executive positions 
in the UK, Spain, Libya, Vietnam, India, Nigeria, 
Kurdistan and Dubai.
In 2006 Les assumed the position of General 
Manager of the operating company for the giant 
Taq Taq Field in Kurdistan and in 2008 became 
Managing Director of Addax Petroleum Middle East 
Limited based in Dubai. Prior to joining Addax in 
Nigeria, Les held Country Manager positions with 
Enterprise Oil and British Gas in South East Asia.
Les graduated from the University of Aberdeen 
in Finance & Economics and is a Fellow of the 
Association of Chartered Certified Accountants. 
Les stepped down from the Board as Chief 
Executive Officer in September 2014 to assume 
the new role of Strategic Adviser to the Company 
based in Nigeria.
Pieter has 25 years of oilfield exploration and 
production experience in a variety of technical, 
operational and management roles. He started 
his career with Schlumberger as a geologist in 
London, moving on to become a wireline engineer 
working in South East Asia and West Africa. After 
his field work, he trained as a log analyst with 
Schlumberger in London for multiple clients and 
was seconded to Exxon in the UK.
From Schlumberger, Pieter moved to Amerada 
Hess initially as a Petrophysicist in the international 
team, then to technical and management roles. 
He worked as an expatriate on Hess’s two large 
onshore joint venture field rehabilitation projects, 
the Kursenge and Karabagli Field redevelopment 
project in Azerbaijan and the El Gassi 
redevelopment project in Algeria.
Pieter worked briefly with Gulfsands Petroleum 
in Syria as Deputy General Manager, preparing 
for and starting the initial drilling campaign and 
involved in working up what became the Khurbert 
East discovery.
In Nigeria his experience consists of four years as 
General Manager of an independent oil company, 
overseeing onshore development and production 
in the Niger Delta, before moving to Eland Oil & 
Gas PLC in Nigeria as Technical Manager and 
latterly as Chief Operating Officer.
Pieter has a geology degree from Auckland 
University and a Masters degree in Petroleum 
Geology from the University of Aberdeen.
Jay Christison
Facilities General Manager
Jay has over 30 years of experience in design and 
construction of oilfield facilities worldwide. Prior 
to moving to Nigeria, he worked in California, the 
Middle East and Houston.
He spent five years as Country Manager for 
Paragon Engineering, providing design engineering 
services to the local petroleum industry and 10 
years with Addax in key management roles.
Jay brings a proven record of performance in 
conceiving and executing smaller sized, fit-for-
purpose, low cost projects, and a wealth of 
knowledge of the capabilities of local contractors 
and vendors in Nigeria. Jay manages the design 
and construction of the oil producing facilities.
Jay has a Masters degree in Mechanical 
Engineering and has been a registered  
Professional Engineer in British Columbia  
since 1974.
Gafar has over 40 years of diversified experience 
in the upstream oil and gas business covering 
production, drilling, completion and workover, 
logistics, administration, human resources, 
community relations, security and services in both 
onshore and offshore operations. He started his 
career with Elf Petroleum Nigeria.
Gafar subsequently worked with Mobil Producing 
Nigeria as Senior Operations Engineer before 
moving to Ashland Oil Nigeria Company / Addax 
Petroleum Development (Nigeria) where he worked 
in various senior managerial positions. He had 
been deployed to work in France and Switzerland 
and attended many international training 
conferences and seminars.
Gafar has a degree in Mechanical Engineering from 
the University of Lagos and a Diploma in Petroleum 
Engineering from the French Institute  
of Petroleum, Paris.
Gilles has over 35 years of upstream oil and 
gas experience. He joined Royal Dutch Shell 
in 1976 with assignments to Brunei Shell, 
Nederlandse Aardolie Maatschappij, Abu Dhabi 
Company for Onshore Operations, Shell Expro 
(UK), Shell Argentina, Norske Shell, and Shell 
Nigeria (SNEPCO). During his career with Shell, 
Gilles held various positions in reservoir and 
petroleum engineering, new ventures and project 
management. He joined Addax Petroleum in 1999 
and was Head of Reservoir Engineering, Head 
of Corporate Planning and Corporate Head of 
Reservoir Engineering/ Reserves Manager.
Gilles holds a Master’s degree in Aeronautical 
Engineering from the Technical University of 
Delft, Netherlands.
Gafar Olagunju
General Manager, Human Resources & Services
John has over 30 years of upstream oil and 
gas industry experience in a variety of technical, 
commercial and managerial roles. These cover 
everything from frontier exploration, through 
appraisal and development, to mature field 
production. He is a geologist by background but 
has also worked as a petroleum economist. He 
has worked for several companies, holding senior 
positions at BP , Enterprise Oil, Shell and Dana 
Petroleum, in Europe, Southeast Asia and East, 
North and West Africa.
John has a BSc in Geology and Geography from 
Nottingham University and an MSc in Engineering 
Geology from Leeds University.
John Downey
Chief Technical Officer
Gilles Krijger
Technical Director YDB Governance
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
33
Edward Cozens
General Manager, Commercial
Hilary Azoba
Drilling Manager
Theophilus O. Odigie
Operations Manager
Emmanuel Ikechukwu Iwunze
GM Finance
Bert Dijksman
Exploration Manager
Joel Okandeji
Community Relations Manager
Edward joined Eland from GDF Suez E&P UK 
where he was a business analyst working in the 
Business Development team. Prior to working 
in E&P , Edward began his career in the City. He 
has four years’ Corporate Finance and Broking 
experience having worked at Allenby Capital and 
Matrix Group.
Edward was part of Matrix’s successful oil & 
gas franchise and was involved with numerous 
corporate actions and fundraisings for both private 
and public E&P clients.
Edward graduated from Loughborough University 
with a degree in Banking, Finance and Management.
Hilary Azoba is a versatile Petroleum Engineer and 
Petroleum Projects Development Manager with 
27 years’ experience working for major energy 
companies (Shell, Schlumberger, & ConocoPhillips) 
in Nigeria, Oman, Gabon, UK, USA, Russia, and 
Canada among other countries. Holds B.Eng. 
(Mechanical Engineering, 1st Class Honours 
1984) from the University of Nigeria Nsukka and 
MBA from the University of Phoenix Arizona (USA). 
He is a registered professional engineer in the 
Province of Alberta Canada and Member Society 
of Petroleum Engineers. His career experience 
centred around designing and delivering 
development and exploration wells on land, 
desert, arctic, swamp, and offshore environments, 
with stints in production facilities operations and 
maintenance and safety. Recent work includes 
successfully engineering, supervising and 
managing drilling and completions operations for 
intermediate E&P operators in Nigeria.
Theophilus O.Odigie holds B.Sc. (Hons) in 
Instrumentation and Systems Engineering 
obtained in 1980 from Teeside Polytechnic 
now Teeside University, Middlesbrough in UK. 
He has over thirty four years post graduation 
working experience which spans the Power, 
Steel, Glass, Oil and Gas industries. His 
technical competence includes Surface facilities 
Engineering, Maintenance, Operations, Safety 
Incident Investigation, Technical Auditing and 
Emergency Response. He is a registered and 
Certified Engineer. A certified Occupational Health 
practitioner. A trained Environmental Management 
System auditor. His last job was with Shell 
Petroleum Development Company of Nigeria for 
about twenty two years. The last position held 
was Operations Manager for Swamp West.
Mr. Emmanuel Ikechukwu Iwunze, is a Chartered 
Accountant of 30 years cognate experience. 
Emmanuel’s working experience spanned across 
Financial and Accounting Organizations and Oil 
and Gas.
He started his career with Deloitte Group and 
thereafter worked with Coopers and Lybrand, Inlak 
Group, Shell Petroleum Development Company 
of Nigeria Limited, Pan Ocean Oil Corporation as 
Finance Manager, Amni International Petroleum 
Development Company Limited as General 
Manager, Finance and PriceWaterhouse Coopers 
as a Consultant before joining Elcrest E & P Nigeria 
Limited as General Manager, Finance.
Emmanuel attended many training courses, 
seminars and conferences both locally and 
overseas. He has B.Sc. (Hons) in Political Science, 
M.Sc. in Banking and Finance. He is a Fellow, 
Institute of Chartered Accountant, Associate 
Member, Chartered Institute of Taxation of Nigeria 
and Fellow of the Institute of Credit Administrators.
Bert has over 38 years of international energy 
industry experience and joined Eland Oil & Gas 
some two years ago.
Bert started with Shell International E&P in 1977 
working in various exploration roles in Africa, 
Oman, the North Sea and South America, where 
he was directly involved in the discovery of the 
giant Camisea gas field. In 2001, Bert joined 
Maghreb Petroleum Exploration, Morocco where 
he evaluated several inland basins and shallow 
offshore tracts before moving to Staatsolie 
Maatschappij Suriname NV in 2003, again as 
an Exploration and Contract advisor and was 
responsible for the full exploration cycle. Several 
additional fields were discovered reversing the 
then declining production into a healthy increase 
of over 50%.
From 2000 to 2008 Bert advised the Namibian 
State Oil company Namcor. Bert joined PanTerra 
Geoconsultants BV in 2006 and since 2010 he 
has been closely involved in the evaluation of 
Eland’s OML 40 licence.
Bert has a MSc in Geology from the University 
of Utrecht and obtained a PhD at the Utrecht 
University in 1977.
Mr Joel Okandeji is a seasoned community relations 
adviser with over 24 years experience in the oil 
and gas industry working for the Shell Petroleum 
Development Company of Nigeria. He worked in 
various roles for SPDC such as community interface 
coordinator, government relations advisor, security 
advisor, and head of the public relations section. 
Joel is a highly respected indigene of the Niger Delta.
His vast experience has provided him with an in-depth 
understanding of security and community issues in 
Niger Delta, especially the Western Swamp region. 
Joel attended many training course on public relations, 
community and security both locally and overseas. 
He has a B.Sc. in Political Science/Sociology and 
Anthropology. He is a member of the Nigerian 
Institute of Public Relations having held the position 
of the Chairman in the Delta state chapter from 2010 
to 2015. Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
34
Directors’ Report
Results and Dividend
The consolidated loss for the year was $16.3 million (2013: loss of $26.1 million).
The Directors do not propose a dividend (2013: $nil).
Details of significant events affecting the Company and Group since the balance sheet date are given in note 33 to the financial statements. 
A fair review of the business including future developments is included in the Strategic Report on pages 2 to 29.
Directors’ Third Party Indemnity Provisions
The Company maintained during the period and to the date of approval of the financial statements indemnity insurance for its Directors and 
Officers against liability in respect of proceedings brought by third parties, subject to the terms and conditions of the Companies Act 2006.
Capital Structure
Details of the Capital Structure can be found in note 20 of the consolidated financial statements. The Company has employee share option 
plans in place, full details of which can be found in note 29 to the financial statements.
Financial Instruments
The Group’s principal financial instruments comprise cash and cash equivalents and debt facilities. Further details on financial instruments 
are given in note 30 to the financial statements.
Directors
Biographies of the present Directors of the Company are listed on pages 30 and 31.
As a result of the Board changes announced on 8 September 2014, Les Blair stepped down from the Board, George Maxwell was 
appointed Chief Executive Officer and Louis Castro was appointed Chief Financial Officer all on that date. Gilles Krijger and James Ede-
Golightly resigned from the Board on 11 February 2014. Andrew Bartlett resigned from the Board on 15 September 2014 and Richard Norris 
was appointed on the same date. 
In accordance with the Company’s Articles of Association, George Maxwell, Henry Turcan and Richard Norris retire at the AGM and, being 
eligible, offer themselves for re-election.
Details of the remuneration of the Directors is disclosed in the Remuneration Report on pages 38 to 40.
Political Donations
No political donations were made during the year or the previous year.
Auditor
Each of the persons who is a Director at the date of approval of this Annual Report confirms that:
 + so far as the Director is aware, there is no relevant audit information of which the Company’s auditor is unaware; and,
 + the Director has taken all the steps that ought to have been taken as a director in order to make himself aware of any relevant audit 
information and to establish that the Company’s auditor is aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.
Deloitte LLP have been appointed as auditor and have expressed their willingness to continue in office as auditor and a resolution to 
reappoint them will be proposed at the forthcoming Annual General Meeting.
Going Concern
The Group’s business activities, together with factors which impact these activities, such as the risk of interruptions to production are 
included within the Chief Executive’s Report and the risk factors described on page 28. The financial position of the Group, its cash flows, 
liquidity position and borrowing facilities are described in the Financial Review on page 24. Having regard to the matters above, and after 
making reasonable enquiries and taking account of uncertainties and reasonably possible changes in operating performance, the Directors 
have a reasonable expectation that the Company and the Group have adequate resources to continue operations for the foreseeable future. 
For that reason, they continue to adopt the going concern basis in the preparation of the accounts.
Approved by the Board of Directors and signed on behalf of the Board.
On behalf of the Board
Louis Castro
Chief Financial Officer
21 May 2015 Governance
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
35
Corporate Governance Report
The UK Corporate Governance Code
Companies listed on the main market of the London Stock Exchange are required to comply with the UK Corporate Governance Code.
Eland Oil & Gas PLC’s shares are traded on AIM and as such, the Company is not subject to the requirements of the UK Corporate 
Governance Code on corporate governance, nor is it required to disclose its specific policies in relation to corporate governance. However, 
as a publicly quoted company, the Company will maintain appropriate standards of corporate governance.
The UK Corporate Governance Code represents the ‘gold standard’. However, the UK Corporate Governance Code was not designed with 
smaller companies in mind. Adherence to the full UK Corporate Governance Code is often impractical for smaller companies. In the past, in 
the absence of an alternative code, many AIM companies have adopted the UK Corporate Governance Code “to the extent applicable”.
In July 2005, the QCA introduced a simple set of guidelines for corporate governance for AIM companies, which were updated in July 2007 
and again in September 2010. According to the QCA, the guidelines have been devised in consultation with a number of significant 
institutional smaller company investors.
The Directors recognise the importance of sound corporate governance and the Company holds membership of the QCA and complies with 
the QCA guidelines and the main provisions of the UK Corporate Governance Code, insofar as is practicable to do so for a company of 
Eland’s current size and stage of development, save in relation to the presentation of an Audit Committee report, performance evaluation 
procedures for the Directors and the Board and in relation to certain of the Directors, who will not be independent because of the grant or 
proposed grant of options to them by the Company.
The Board of Directors operates within the framework described below.
Table of Committees
The Board is responsible for formulating, reviewing and approving the Company’s strategy, budgets and corporate actions. Board meetings 
are held at least quarterly and at such other times as the Directors deem necessary.
The Directors recognise the value of the UK Corporate Governance Code and take appropriate measures to ensure that the Company 
complies, when practicable and so far as possible given the Company’s size and nature of business, with the UK Corporate Governance 
Code.
The roles of the Chief Executive and Chairman have been segregated and the Company has adopted a senior independent director in 
Robert Lambert. The Board has established a Remuneration Committee, an Audit Committee, a Technical and Reserves Committee and a 
Nomination Committee. All committees have formally delegated duties and responsibilities as follows:
Audit Committee
The Audit Committee consists of Henry Turcan as Chairman, Harry Wilson and Robert Lambert.
The Audit Committee meets at least twice each year and is responsible for ensuring that the financial performance of the Company is 
properly monitored and reported on and for meeting with the auditors and reviewing findings of the audit with the external auditor.
It is authorised to seek any information it properly requires from any employee and may ask questions of any employee. It meets with the 
auditors once a year without any members of management being present and is also responsible for considering and making 
recommendations regarding the identity and remuneration of such auditors.
Remuneration Committee
The Remuneration Committee consists of Russell Harvey as Chairman, Richard Norris and Henry Turcan.
The Remuneration Committee meets at least once each year and considers and recommends to the Board the framework for the 
remuneration of the Executive Directors of the Company and senior management.
It further considers and recommends to the Board the total individual remuneration package of each Executive Director including bonuses, 
incentive payments and share options or other share awards. In addition, subject to existing contractual obligations, it reviews the structure 
of all share incentive plans for approval by the Board and, for each such plan, recommends whether awards are made and, if so, the overall 
amount of such awards, the individual awards to Executive Directors and the performance targets to be used. No Director is involved in 
decisions concerning his own remuneration. Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
36
Technical and Reserves Committee
The Technical and Reserves Committee consists of Robert Lambert as Chairman, Russell Harvey and Richard Norris.
The Technical and Reserves Committee meets at least twice a year and is responsible for reviewing the technical performance and plans of 
the Company and to review and approve the annual reserves audit to be performed by a competent technical auditor. The committee is 
responsible for the selection and appointment of the technical auditor for recommendation provided by the Company or independently 
sourced by the committee.
Nomination Committee
The Nomination Committee consists of Harry Wilson as Chairman, Robert Lambert and Russell Harvey.
The Nomination Committee meets at least once each year and considers the selection and re-appointment of Directors. It identifies and 
nominates candidates to all Board vacancies and regularly reviews the structure, size and composition of the Board (including the skills, 
knowledge and experience) and makes recommendations to the Board with regard to any changes.
The Company has adopted a share dealing code (based on the AIM Rules) and the Company takes all proper and reasonable steps to 
ensure compliance by the Directors and relevant employees.
The Board is also responsible for ensuring the Company’s compliance with all applicable anti-corruption legislation, including, but not limited to, the 
UK Bribery Act 2010 and the US Foreign Corrupt Practices Act 1977 . The Company complies and always has complied with all applicable 
anti-corruption laws. In view of the requirement in the UK Bribery Act 2010 for relevant companies to have adequate anti-bribery procedures, the 
Company has devised and implemented a suite of anti-corruption policies and procedures designed to prevent corruption by anyone working on 
its behalf. The Company has adopted a ‘zero tolerance’ approach to corruption and is committed to ethical business practices.
Board and Committee Attendance Register 2014*
 
 
Board
In Attendance
Audit 
Committee
In Attendance
Remuneration 
Committee
In Attendance
Reserves 
Committee
In Attendance
Nomination 
Committee
In Attendance
Executive Directors  
George Maxwell 7 – – – –
Louis Castro 6 3 1 1 –
Harry Wilson 7 3 1 – 1
Les Blair (resigned 8 September 2014) 5 – – – –
Gilles Krigjer (resigned 11 February 2014) – – – 1 –
Non-Executive Directors  
Robert Lambert 7 3 – 1 1
Russell Harvey 7 – 1 1 1
Andrew Bartlett (resigned 15 September 2014) 5 – – – –
Richard Norris 4 – 1 1 –
*  During 2014, there were 7 Board meetings; 3 Audit Committee meetings; 1 Remuneration Committee meeting; 1 Reserves Committee meeting; and, 1 Nomination Committee meeting.
Internal Control
The Company has in place policies on internal control and corporate governance. These have been prepared in order to ensure that:
 + proper business records are maintained and reported on, which might reasonably affect the conduct of the business;
 + monitoring procedures for the performance of the Group are presented to the Board at regular intervals;
 + budget proposals are submitted to the Local Board no later than two months before the start of each financial year;
 + budget proposals are submitted to the Board no later than one month before the start of each financial year;
 + accounting policies and practices suitable for the Group’s activities are followed in preparing the financial statements;
 + the Group is provided with general accounting, administrative and secretarial services as may reasonably be required; and
 + interim and annual accounts are prepared and submitted in time to enable the Group to meet statutory filing deadlines.
Communication with Shareholders
Communications with shareholders are given a high priority by the Board of Directors who take responsibility for ensuring that a satisfactory 
dialogue takes place. This is achieved through its Annual Report, Interim Report and comprehensive website (www.elandoilandgas.com). 
There is also a regular dialogue between the Chief Executive Officer, the Chief Financial Officer and institutional investors and other financial 
institutions in addition to the required public announcements. A constant and up-to-date information flow is maintained on the website 
containing all press announcements and financial reports.
Harry Wilson
Chairman
21 May 2015
Corporate Governance Report continued Governance
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
37
Directors’ Responsibility Statement
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law 
and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors are required to 
prepare the group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European 
Union and have also chosen to prepare the parent company financial statements under IFRSs as adopted by the EU. Under company law 
the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the company 
and of the profit or loss of the Company for that period. In preparing these financial statements, International Accounting Standard 1 requires 
that Directors:
 + properly select and apply accounting policies;
 + present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable 
information; 
 + provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the 
impact of particular transactions, other events and conditions on the entity’s financial position and financial performance; and
 + make an assessment of the company’s ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions 
and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial 
statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for 
taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s 
website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in 
other jurisdictions.
Responsibility statement
We confirm that to the best of our knowledge:
 + the financial statements, prepared in accordance with International Financial Reporting Standards as adopted by the EU, give a true and 
fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation 
taken as a whole; and
 + the Strategic Report includes a fair review of the development and performance of the business and the position of the Company and the 
undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
By order of the Board
George Maxwell   Louis Castro
Chief Executive Officer  Chief Financial Officer
21 May 2015   21 May 2015 Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
38
Directors’ Remuneration Report
For the year ended 31 December 2014
The Remuneration Committee (the ‘Committee’) is comprised of Russell Harvey (Chairman), Richard Norris and Henry Turcan. The 
Committee is responsible for determining and making recommendations to the Board on the structure and overall remuneration package for 
Executive Directors and reviews the remuneration for the Company’s senior employees. It is responsible for determining individual 
remuneration packages including, where appropriate, bonuses, incentive payments and share options.
The remuneration of the Non-Executive Directors is set by the Board on the basis of a proposal prepared by the Committee. No Director 
may participate in any meeting at which discussion or any decision regarding his own remuneration takes place. The Committee also 
administers the Company’s share option and share award schemes. The Committee keeps itself fully informed of all relevant developments 
and best market practice in the field of remuneration.
The Committee is permitted to appoint independent advisers to assist in the determination of the remuneration and does so periodically.
In April 2014 Russell Harvey took over from Harry Wilson as Chairman of the Committee. Louis Castro stood down from the Committee on  
8 September 2014 in light of his appointment to the executive position of Chief Financial Officer. Andrew Bartlett stood down from the 
Committee on 15 September 2015, and Richard Norris was appointed to the Committee on the same date. Harry Wilson stood down from 
the Committee on 1 April 2015 in light of his appointment to the role of Executive Chairman, and Henry Turcan was appointed to the 
Committee on the same date. 
Remuneration Policy
The Committee, in forming its policy on remuneration, has given due consideration to the needs of the Company, the shareholders and the 
provisions of the 2012 UK Corporate Governance Code (the ‘Code’). The ongoing policy of the Committee is that the overall remuneration 
package should be sufficiently competitive to attract, retain and motivate high quality employees capable of achieving the Group’s objectives 
and to incentivise them effectively, so as to deliver long-term shareholder value.
It is the aim of the Committee to reward key employees on a basis which is linked, to a significant extent, to the performance of the individual 
and of the Company. Also, the remuneration is subject to the broader principle that their remuneration should be competitive with that 
received by professionals of comparable companies, and to this end a benchmarking exercise was carried out during the course of 2014.
There are five main elements of the remuneration package:
 + Base salary
 + Employee benefits
 + Performance-related cash bonus
 + Performance-related share award
 + Long-term share options
The Group bonus performance measurement for Executive Directors and staff is based upon personal performance, linked to personal 
development plans and Group performance in achieving the key operational targets. The key operational targets relate to production, 
reserves and budget performance. The Group continues to monitor key metrics on share performance versus its peer group companies and 
key indices such as the FTSE AIM Oil & Gas, and FTSE AIM All-Share.
The share option plans also have key performance measurements in place which include achievement of a significant increase in share price 
in addition to a vesting period of between two and three years in order for the options to be exercised.
Base Salary
The policy is to pay a fair and reasonable base salary, taking into account comparable salaries for similar roles in similar companies. The 
base salary is reviewed annually by the Committee having regard to the performance of the Company, individual performance, market data, 
levels of increases applicable to other employees of the Company and economic conditions. A salary and bonus review for staff and 
Executive Directors was undertaken in Q1 2015.
Employee Benefits
Of the Executive Directors, George Maxwell, Louis Castro and Gilles Krijger received car allowances in the period. In 2014, pension 
contributions totalling £67,612 (2013: £24,200) were made in respect of the current year. In 2013 an additional contribution of £49,000 was 
made in relation to 2012 and prior years. Pension plan arrangements for all employees including Executive Directors are set at 11% Company 
contribution of gross base salary. Further details of Directors’ remuneration paid in the year are set out on page 40 and in note 31 of the 
Financial Statements.
The Company provides the Company’s Directors and Officers with third party indemnity insurance. Governance
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
39
Employee Share Plan
On 26 June 2012 the Board modified and approved the long-term employee share plan (the ‘Share Plan’), designed to provide incentives to 
employees to act in the long-term best interests of the Group and its shareholders. Performance-related share awards may be granted 
under the Share Plan to the Company’s employees and Executive Directors by the Board, upon recommendation by the Remuneration 
Committee.
Long-Term Share Option Scheme
On 26 June 2012, the Board approved the implementation of share option plans (the ‘Plans’). On the same day, 412,500 options were 
granted under the Plans to the employees and Directors over Ordinary Shares of the Company. On 31 August 2012, the Board approved the 
award of 10,467,263 options under the Plans to the employees and Directors over Ordinary Shares of the Company. Details of the terms of 
the options awarded to Directors and employees under the Plan are set out in Note 29 to the Financial Statements.
The grant of options to Directors under the Plan results in the following position at the date of this report (audited):
Director
New options 
granted in 
2014
Total number 
of options 
held at the 
date of this 
report
George Walter Mitchell Maxwell 250,000 3,765,667
Henry George Wilson – 2,511,191
Robert Alexander Lambert – –
Louis Emmanuel Castro – 130,000
Russell Seth Harvey – –
Richard Norris – –
Henry Turcan – –
In addition to the above, Leslie Blair received 250,000 share options whilst serving as a Director during 2014. He stood down from the Board on 8 September 2014
Performance Graph
The following graph shows the Company’s total shareholder return (TSR) from 1 January 2014 to 13 April 2015, against the FTSE AIM 
All-Share Index and the FTSE AIM Oil & Gas index.
30
50
70
90
110
130
02/05/2015
02/04/2015
02/03/2015
02/02/2015
02/01/2015
02/12/2014
02/11/2014
02/10/2014
02/09/2014
02/08/2014
02/07/2014
02/06/2014
02/05/2014
02/04/2014
02/03/2014
02/02/2014
02/01/2014
Eland FTSE AIM All-Share FTSE AIM Oil & Gas
Share price rebased to 100 (p) Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
40
Directors’ Remuneration
The remuneration of the Directors who held office in the year ended 31 December 2014, payable by Group companies, was as follows 
(audited):
Directors
Fees and 
salary
£000
Annual bonus
£000
Pension
£000
Benefits in 
kind
£000
Total 2014
£000
Total 2013
£000
Executive Directors
Henry George Wilson 279 – 4 283 272
George Walter Mitchell Maxwell
1, 9
338 79 33 2 452 284
Louis Castro
2, 9
126 9 1 136 36
Ian Leslie Blair
1, 3, 4
319 91 23 6 439 431
Gilles Jacobus Krijger
5, 6
28 3 – 31 255
Non-Executive Directors
Robert Alexander Lambert 51 – – 51 51
Russell Seth Harvey 56 – – 56 51
James Ede-Golightly
5
5 – – 5 47
Andrew Bartlett
7
33 – – 33 47
Richard Norris
8
16 – – 16 –
Total 1,251 170 68 13 1,502 1,474
1 In addition to the above amounts for 2013, pension contributions totalling $69,117 and £40,608 were made by the Company on behalf of Ian Leslie Blair and George Maxwell 
respectively in respect of prior years.
2 Louis Castro was appointed to the executive role of Chief Financial Officer on 8 September 2014. He was previously a non-executive director of the Company.
3 Ian Leslie Blair received basic salary in US Dollars and fees in GB Pound Sterling.
4 Ian Leslie Blair stood down from the Board on 8 September 2014.
5 Gilles Krijger and James Ede-Golightly stood down from the Board of Directors on 11 February 2014.
6 In addition to the above amounts, Gilles Krijger received compensation for loss of office amounting to £6,250.
7  Andrew Bartlett stood down from the Board on 15 September 2014.
8 Richard Norris was appointed to the Board on 15 September 2014.
9 In addition to the remuneration shown in this table, George Maxwell and Louis Castro received bonuses of £66,700 and £13,400 in relation to 2014.
Non-Executive Directors
All Non-Executive Directors have contracts for services, setting out the terms and conditions of their appointment, which are terminable 
upon the provision of three months’ written notice by either party. Their remuneration is determined by the Board upon recommendation of 
the Remuneration Committee. Save for the fees received under the letters of appointment, options awarded under the Plan and 
reimbursement of reasonable expenses incurred in the discharge of their duties, the Non-Executive Directors are not entitled to any other 
benefits or arrangements.
Russell Harvey
Chairman
Remuneration Committee
21 May 2015
Directors’ Remuneration Report continued
For the year ended 31 December 2014 Financial Statements
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
41
Independent Auditor’s Report
Independent Auditor’s Report
To the Members of Eland Oil & Gas PLC
We have audited the financial statements of Eland Oil & Gas PLC for the year ended 31 December 2014 which comprise the Consolidated 
Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company Balance Sheets,  
the Consolidated and Parent Company Statements of Changes in Equity, the Consolidated and Parent Company Cash Flow Statements  
and the related notes 1 to 33. The financial reporting framework that has been applied in their preparation is applicable law and International 
Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the parent company financial statements, as 
applied in accordance with the provisions of the Companies Act 2006.
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our 
audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an 
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other 
than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and auditor
As explained more fully in the Directors’ Responsibilities Statement, the Directors are responsible for the preparation of the financial 
statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial 
statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to 
comply with the Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance 
that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether 
the accounting policies are appropriate to the Group’s and the parent company’s circumstances and have been consistently applied and 
adequately disclosed; the reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the 
financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies 
with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent 
with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or 
inconsistencies we consider the implications for our report.
Opinion on financial statements
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the parent company’s affairs as at 31 December 2014 
and of the Group’s loss for the year then ended;
• the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
• the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and 
as applied in accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements 
are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from 
branches not visited by us; or
• the parent company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Graham Hollis ACA (Senior statutory auditor)
for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor  
Aberdeen, United Kingdom
21 May 2015 Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
42
Note
2014
$’000s
2013
$’000s
Revenue 4 11,698 –
Operating expenses (18,222) (16,478)
Administrative expenses (8,839) (8,431)
Operating loss (15,363) (24,909)
Finance costs 8 (1,503) (918)
(1,503) (918)
Loss before tax 5 (16,866) (25,827)
Income tax credit/(expense) 9 569 (315)
Loss after tax and for the year from continuing operations (16,297) (26,142)
Profit/(loss) attributable to:
Owners of the Company 10,671 1,923
Non-controlling interests 25 (26,968) (28,065)
(16,297) (26,142)
Earnings per share Note
2014
$
2013
$
From continuing operations:
Basic 10 0.07 0.01
Diluted 10 0.07 0.01
All activities relate to continuing operations.
The notes on pages 50 to 72 form part of these financial statements.
Consolidated Income Statement
For the year ended 31 December 2014 Financial Statements
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
43
Note
2014
$’000s
2013
$’000s
Loss for the year (16,297) (26,142)
Items that may be reclassified subsequently to profit and loss:
Exchange differences on translation of financial statements to presentation currency – –
Total comprehensive loss for the year (16,297) (26,142)
Comprehensive income/(loss) attributable to:
Owners of the Company 10,671 1,923
Non-controlling interests 25 (26,968) (28,065)
(16,297) (26,142)
The notes on pages 50 to 72 form part of these financial statements.
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2014 Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
44
Note
2014
$’000s
2013
$’000s
Non-current assets
Intangible oil and gas assets 11 11,355 –
Property, plant and equipment 12 188,114 175,119
Deferred tax asset 9 784 –
 200,253 175,119
Current assets
Inventory 14 353 –
Trade and other receivables 15 4,430 4,194
Cash and cash equivalents 15,017 3,847
19,800 8,041
Total assets 220,053 183,160
Current liabilities
Trade and other payables 16 (36,231) (20,398)
Other provisions 17 (2,250) –
(38,481) (20,398)
Net current liabilities (18,681) (12,357)
Non-current liabilities
Decommissioning provision 19 (12,306) (11,978)
Total liabilities (50,787) (32,376)
Net assets 169,266 150,784
Shareholders’ equity
Share capital 20 248,039 214,768
Equity reserve 21 – 8,008
Other reserve 22 (15,542) (15,542)
Retained earnings/(losses) 23 8,470 (11,717)
Translation reserve 24 1,429 1,429
Equity attributable to the owners of the Company 242,396 196,946
Non-controlling interests 25 (73,130) (46,162)
Total equity 169,266 150,784
The notes on pages 50 to 72 form part of these financial statements.
These financial statements were approved by the Board of Directors on 21 May 2015.
George Maxwell  Louis Castro
Chief Executive Officer Chief Financial Officer
Consolidated Balance Sheet
As at 31 December 2014 Financial Statements
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
45
Note
2014
$’000s
2013
$’000s
Non-current assets
Investments in Group undertakings 13 181,414 167,227
Property, plant and equipment 12 357 267
181,771 167,494
Current assets
Trade and other receivables 15 49,894 43,645
Cash and cash equivalents 11,857 3,442
61,751 47,087
Total assets 243,522 214,581
Current liabilities
Trade and other payables 16 (9,050) (7,652)
Net current assets 52,701 39,435
Net assets 234,472 206,929
Shareholders’ equity
Share capital 20 248,039 214,768
Equity reserve 21 – 8,008
Other reserve 22 (15,542) (15,542)
Retained earnings/(losses) 23 904 (1,376)
Translation reserve 24 1,071 1,071
Equity attributable to the owners of the Company 234,472 206,929
The notes on pages 50 to 72 form part of these financial statements.
The financial statements of Eland Oil & Gas PLC, registered number SC364753, were approved by the Board of Directors on 21 May 2015.
George Maxwell  Louis Castro
Chief Executive Officer Chief Financial Officer
Company Balance Sheet
As at 31 December 2014 Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
46
Share 
capital
$’000s
Equity 
reserve
$’000s
Other 
reserve
$’000s
Translation 
reserve
$’000s
Retained 
losses
$’000s
Total
$’000s
Non-
controlling 
interests
$’000s
Total 
equity
$’000s
Balance at 1 January 2013 214,768 8,008 (10,542) 1,429 (15,096) 198,567 (18,097) 180,470
Comprehensive profit/(loss) for the year – – – – 1,923 1,923 (28,065) (26,142)
Share-based payments – – – – 1,456 1,456 – 1,456
Forward purchase arrangement over the shares 
of a subsidiary (note 22) – – (5,000) – – (5,000) – (5,000)
Balance at 31 December 2013 214,768 8,008 (15,542) 1,429 (11,717) 196,946 (46,162) 150,784
Comprehensive profit/(loss) for the year – – – – 10,671 10,671 (26,968) (16,297)
Share-based payments (note 29) – – – – 1,508 1,508 – 1,508
Issue of share capital (note 20) 33,271 – – – – 33,271 – 33,271
Transfer of equity reserve to retained losses 
(note 21) – (8,008) – – 8,008 – – –
Balance at 31 December 2014 248,039 – (15,542) 1,429 8,470 242,396 (73,130) 169,266
The notes on pages 50 to 72 form part of these financial statements.
Consolidated Statement of Changes in Equity
Year ended 31 December 2014 Financial Statements
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
47
Share 
capital 
$’000s
Equity 
reserve 
$’000s
Other 
reserve 
$’000s
Translation 
reserve 
$’000s
Retained 
(losses)/
earnings 
$’000s
Total 
equity 
$’000s
Balance at 1 January 2013 214,768 8,008 (10,542) 1,071 (3,631) 209,674
Comprehensive profit for the year – – – – 799 799
Share-based payments – – – – 1,456 1,456
Forward purchase arrangement over the shares of a subsidiary (note 22) – – (5,000) – – (5,000)
Balance at 31 December 2013 214,768 8,008 (15,542) 1,071 (1,376) 206,929
Comprehensive loss for the year – – – – (7,236) (7,236)
Share-based payments (note 29) – – – – 1,508 1,508
Issue of share capital (note 20) 33,271 – – – – 33,271
Transfer of equity reserve to retained losses (note 21) – (8,008) – – 8,008 –
Balance at 31 December 2014 248,039 – (15,542) 1,071 904 234,472
The notes on pages 50 to 72 form part of these financial statements.
Company Statement of Changes in Equity
Year ended 31 December 2014 Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
48
Note
2014
$’000s
2013
$’000s
Cash used in operating activities 26 (5,339) (13,334)
Interest and financing fees paid (348) –
Income tax paid (316) –
Net cash used in operating activities (6,003) (13,334)
Investing activities
Acquisition of interest in licence (7,000) –
Expenditure on other intangibles (3,936) –
Development expenditure (3,677) (5,582)
Exploration and evaluation expenditure (950) –
Purchases of fixtures and equipment (299) (503)
Proceeds from sale of fixtures and equipment 2 –
Net cash used in investing activities (15,860) (6,085)
Financing activities
Proceeds on issue of shares 33,271 –
Net cash from financing activities 33,271 –
Net increase/(decrease) in cash and cash equivalents 11,408 (19,419)
Cash and cash equivalents at the beginning of the year 3,847 24,500
Effect of foreign exchange rate changes (238) (1,234)
Cash and cash equivalents at the end of the year 15,017 3,847
The notes on pages 50 to 72 form part of these financial statements.
Consolidated Cash Flow Statement
Year ended 31 December 2014 Financial Statements
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
49
Note
2014
$’000s
2013
$’000s
Cash used in operating activities 26 (9,559) (13,282)
Interest and financing fees paid (348) –
Income tax paid (316) –
Net cash used in operating activities (10,223) (13,282)
Investing activities
Cash advance made to other parties* (7,000) –
Investment in Group undertakings (7,187) (6,147)
Purchases of fixtures and equipment (226) (306)
Proceeds from sale of fixtures and equipment 2 –
Net cash used in investing activities (14,411) (6,453)
Financing activities
Proceeds on issue of shares 33,271 –
Net cash from financing activities 33,271 –
Net increase/(decrease) in cash and cash equivalents 8,637 (19,735)
Cash and cash equivalents at the beginning of the year 3,442 24,399
Effect of foreign exchange rate changes (222) (1,222)
Cash and cash equivalents at the end of the year 11,857 3,442
The notes on pages 50 to 72 form part of these financial statements.
* These relate to amounts paid by the Company directly to All Grace Energy Limited on behalf of the Group’s subsidiary Wester Ord Oil and Gas Nigeria Limited in respect of the 
farm-in fee for the Ubima licence acquisition.
Company Cash Flow Statement
Year ended 31 December 2014 Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
50
1. General information
The principal accounting policies are summarised below. They have all been applied consistently throughout the year and preceding year.
Eland Oil & Gas PLC is a company incorporated in the United Kingdom, under the Companies Act 2006. The address of the registered office 
is given on the back cover. The nature of the Company’s operations and its principal activities are set out in the Strategic Report.
The Company and the Group’s financial statements cover the year to 31 December 2014.
2. Significant accounting policies 
Basis of accounting
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the 
European Union and therefore the Group financial statements comply with Article 4 of the EU Regulations.
The financial statements have been prepared on the historical cost basis. Historical cost is generally based on the fair value of the 
consideration given in exchange for the assets at the date of transaction. The principal accounting policies adopted are set out below.
As permitted by section 408 of the Act, the Company has elected not to present its income statement for the year. Eland Oil & Gas PLC 
reported a loss for the year ended 31 December 2014 of $7.2 million (2013: profit of $0.8 million).
Going concern
The Group’s business activities, together with factors which impact these activities, such as the risk of interruptions to production are 
included within the Chief Executive’s Report and the risk factors described on page 28. The financial position of the Group, its cash flows, 
liquidity position and borrowing facilities are described in the Financial Review on page 24. Having regard to the matters above, and after 
making reasonable enquiries and taking account of uncertainties and reasonably possible changes in operating performance, the Directors 
have a reasonable expectation that the Company and the Group have adequate resources to continue operations for the foreseeable future. 
For that reason, they continue to adopt the going concern basis in the preparation of the accounts.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company made up 
to 31 December each year. Control exists when an investor has power over the investee, exposure or rights to variable returns from its 
involvement with the investee and the ability to use power over the investee to affect the amount of returns. Elcrest Exploration and 
Production Nigeria Limited has been consolidated because it is controlled by the Company. The Company has power to affect the amount 
of returns for the following reasons:
• the Company is entitled to appoint a number of Directors to the Board such that it can control decision making.
• in the event of disagreement amongst the Board of Directors, decisions are reached by shareholder vote and the Company has the 
ability, through the combined effect of a Shareholders Agreement, Loan Agreement and Share Charge, to direct the votes of the 55% 
shareholding that it does not own.
Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity therein. Non-
controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling 
interest’s share of changes in equity since the date of combination.
New IFRS standards and interpretations
In the current year, the following new and revised Standards and Interpretations have been adopted. Their application has not had any 
significant impact on the amounts reported or the disclosures in these financial statements, except for extra disclosures in respect of IFRS 12. 
IAS 36 (amendments)   Recoverable Amount Disclosures for Non-Financial Assets
IFRS 10 (amendments)   Consolidated Financial Statements
IFRS 10 and 12    Consolidated Financial Statements and Disclosures of Interests in Other Entities
IFRS 11 and amendments   Joint Arrangements
IAS 27 (amendments)   Investment Entities
IAS 28 (as revised in 2011), amendments Investments in Associates and Joint Ventures
IAS 32     Offsetting financial assets and financial liabilities
IAS 39 (amendments)   Novation of Derivatives and Continuation of Hedge Accounting
At the date of authorisation of these financial statements, the following Standards and Interpretations which have not been applied in these 
financial statements were in issue but not yet effective (and in some cases had not yet been adopted by the European Union):
IFRS 15      Revenue from contracts with customers 
IFRS 9     Financial Instruments
IFRIC Interpretation 21   Levies
Notes to the Financial Statements
Year ended 31 December 2014 Financial Statements
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
51
The Directors do not expect that the adoption of the Standards and Interpretations listed above will have a material impact on the financial 
statements of the Group in future periods. 
Beyond the information above, it is not practicable to provide a reasonable estimate of the effect of these standards until a detailed review 
has been completed. The Group is still assessing the impact of IFRS 15 ‘Revenue from Contracts with Customers’, but initial indications are 
a disclosure impact only, with no changes expected to the Group’s recognition of revenue.
No new Standards or Interpretations were early adopted by the Group or Company during the year.
Joint arrangements
A joint arrangement is an arrangement over which two or more parties have joint control. The Group is engaged in oil and gas exploration, 
development and production through unincorporated joint ventures which it accounts for as joint operations whereby the Group accounts 
for its share of the results, assets and liabilities of these joint operations. The Group accounts for its interests in jointly controlled entities 
using the equity method. Under the equity method, the investment is initially recognised at cost. The carrying amount of the investment is 
adjusted to recognise changes in the Group’s share of net assets of the venture since the acquisition date.
Revenues
Sales revenue represents the sales value of the Group’s oil liftings in the year. Oil revenue is recognised when the risks and rewards of 
ownership have transferred substantially to the buyer and it can be reliably measured, and generally occurs when title has passed  
on bill of lading. Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for oil 
and gas products in the normal course of business, net of discounts, customs duties and sales taxes.
Overlift/underlift
Lifting or offtake arrangements for oil and gas produced in the Group’s jointly owned operations are such that each participant may not 
receive and sell its precise share of the overall production in each period. The resulting imbalance between cumulative entitlement and 
cumulative production is underlift or overlift. Underlift and overlift are valued at market value and included within receivables and payables 
respectively. Movements during an accounting period are adjusted through cost of sales such that gross profit is recognised on an 
entitlement basis. 
Oil and gas assets – exploration and evaluation assets
During the geological and geophysical exploration phase, expenditures are charged against income as incurred. Once the legal right to 
explore has been acquired, expenditures directly associated with exploration and evaluation are capitalised as intangible assets and are 
reviewed at each reporting date to confirm that there is no indication of impairment and that drilling is still underway or is planned. If no future 
exploration or development activity is planned in the licence area, the exploration licence and leasehold property acquisition costs are 
written off. Pre-licencing expenditures on oil and gas assets are recognised as an expense within the income statement when incurred.
Oil and gas assets – development and production assets
Once a project is commercially feasible and technically viable, which in practice is when the asset has been approved for development by 
the appropriate regulatory authorities, the carrying values of the associated exploration licence and property acquisition costs and the 
related cost of exploration wells are transferred to development oil and gas properties after an impairment test. Development and production 
assets are accumulated generally on a field-by-field basis and represent the cost of developing the commercial reserves discovered and 
bringing them into production. The cost of development and production assets also includes the cost of acquisitions and purchases of such 
assets, directly attributable overheads, finance costs capitalised, and the cost of recognising provisions for future restoration and 
decommissioning.
Other property, plant and equipment
Fixtures and equipment are stated at cost less accumulated depreciation and any recognised impairment loss.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives, using the 
straight-line method, on the following bases:
Fixtures and equipment 10% – 30% per annum 
Motor vehicles  30% per annum
Depreciation of producing assets
The net book values of producing assets are depreciated on a field-by-field basis using the unit-of-production method by reference to the 
ratio of production in the year and the related proved and probable commercial reserves of the field, taking into account future development 
expenditures necessary to bring those reserves into production. Producing assets are generally grouped with other assets that are 
dedicated to serving the same reserves for depreciation purposes, but are depreciated separately from producing assets that serve other 
reserves. Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
52
Notes to the Financial Statements continued
Year ended 31 December 2014
2. Significant accounting policies continued
Impairment of development and production assets
An impairment test is performed whenever events and circumstances arising during the development or production phase indicate that the 
carrying value of a development or production asset may exceed its recoverable amount.
The carrying value is compared against the expected recoverable amount of the asset, generally by reference to the present value of the 
future net cash flows expected to be derived from production of commercial reserves. The cash generating unit applied for impairment test 
purposes is generally the field, except that a number of field interests may be grouped as a single cash generating unit where the cash 
inflows of each field are interdependent.
Commercial reserves are proved and probable oil and gas reserves, which are defined as the estimated quantities of crude oil, natural gas 
and natural gas liquids which geological, geophysical and engineering data demonstrate with a specified degree of certainty to be 
recoverable in future years from known reservoirs and which are considered commercially viable. There should be at least a 50% statistical 
probability that the actual quantity of recoverable reserves will be equal to or more than the amount estimated as proved and probable 
reserves.
Any impairment identified is charged to the income statement as additional depreciation. Where conditions giving rise to impairment 
subsequently reverse, the effect of the impairment charge is also reversed as a credit to the income statement, net of any depreciation that 
would have been charged since the impairment.
Acquisitions, asset purchases and disposals
Acquisitions of oil and gas properties are accounted for under the acquisition method when the assets acquired and liabilities assumed 
constitute a business. There have been no such acquisitions to date.
Transactions involving the purchase of an individual field interest, or a group of field interests, that do not constitute a business, are treated 
as asset purchases irrespective of whether the specific transactions involve the transfer of the field interests directly or the transfer of an 
incorporated entity. Accordingly, no goodwill and no deferred tax gross up arises, and the consideration is allocated to the assets and 
liabilities purchased based on relative fair values.
Proceeds on disposal are applied to the carrying amount of the specific intangible asset or development and production assets disposed of 
and any surplus or deficit is recorded as a gain or loss on disposal in the income statement.
Cash and cash equivalents
Cash and cash equivalents comprise cash and short term bank deposits with an original maturity of three months or less.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials, and where applicable, direct labour 
costs and those overheads that have been incurred in bringing the inventories to their present location and condition and is determined on a 
first-in, first-out method. Net realisable value represents the estimated selling price less all estimated costs to be incurred in marketing, 
selling and distribution.
Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event, it is probable that the Group will be required 
to settle that obligation and a reliable estimate can be made of the amount and timing of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet 
date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows 
estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is 
recognised as an asset if it is virtually certain that reimbursement will be received and the amount and timing of the receivable can be 
measured reliably.
Decommissioning
A provision for decommissioning the Group’s oil and gas assets is recognised in full when the related facilities are installed or acquired.  
The extent to which a provision is required depends on the legal requirements for decommissioning, the costs and timing of work and the 
discount rate to be applied. A corresponding adjustment to property, plant and equipment of an amount equivalent to the provision is also 
recognised. This is subsequently depreciated as part of the asset and included in depletion expense in the statement of comprehensive 
income. Changes in the estimated timing of decommissioning or decommissioning cost estimates are accounted for prospectively by 
recording an adjustment to the provision, and a corresponding adjustment to property, plant and equipment. The unwinding of discount on 
the decommissioning provision is classified in the consolidated statement of comprehensive income as finance costs. Financial Statements
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
53
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all of the risks and rewards of ownership to the 
lessee. All other leases are classified as operating leases. Rentals payable under operating leases are charged to income on a straight-line 
basis over the term of the lease.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily 
take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the 
assets are substantially ready for their intended use or sale.
To the extent that variable rate borrowings are used to finance a qualifying asset and are hedged in an effective cash flow hedge of interest 
rate risk, the effective portion of the derivative is recognised in other comprehensive income and released to profit or loss when the qualifying 
asset impacts profit or loss. To the extent that fixed rate borrowings are used to finance a qualifying asset and are hedged in an effective fair 
value hedge of interest rate risk, the capitalised borrowing costs reflect the hedged interest rate.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted 
from the borrowing costs eligible for capitalisation.
Foreign currencies
For the purpose of the consolidated financial statements, the results and financial position of each group company are expressed in US 
Dollars, which is the presentation currency for the consolidated financial statements.
The Group’s income, and the majority of its costs, are denominated in US Dollars. The remainder of the costs are denominated in other 
currencies, predominantly Sterling and Nigerian Naira. The Group also has foreign currency denominated liabilities. Exposures to exchange 
rate fluctuations therefore arise. The Directors currently believe that foreign currency risk is at an acceptable level.
Exchange differences are recognised in profit or loss in the period in which they arise.
Taxation
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the 
financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance 
sheet liability method. Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which 
deductible temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable 
that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised based 
on tax laws and rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is charged or credited in the 
income statement, except when it relates to items charged or credited in other comprehensive income, in which case the deferred tax is also 
dealt with in other comprehensive income.
Financial instruments
Financial assets and financial liabilities are recognised on the balance sheet when the Company or Group has become a party to the 
contractual provisions of the instrument.
Trade and other receivables
Trade receivables are measured at amortised cost.
Trade and other payables
Accounts payable are measured at amortised cost.
Financial liabilities and equity
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual 
arrangement.
Capital risk management
Details of significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis 
on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are 
disclosed in note 30 to the financial statements. Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
54
Notes to the Financial Statements continued
Year ended 31 December 2014
2. Significant accounting policies continued
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity 
instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.
Other financial liabilities
Other financial liabilities are initially measured at fair value, net of transaction costs.
Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recorded on 
an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the 
relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the 
financial liability to the net carrying amount on initial recognition.
Share-based payments
Equity settled share-based payments are measured at the fair value of the equity instruments at the date of grant. The fair value includes the 
effect of non-market-based vesting conditions. Details regarding the determination of the fair value of equity settled share-based 
transactions are set out in note 29.
The fair value determined at the date of grant of the equity-settled share-based payments is expensed on a straight-line basis over the 
vesting period, based on the Group’s estimate of the number of equity instruments that will eventually vest. At each balance sheet date, the 
Group revises its estimate of the number of the equity instruments expected to vest as a result of the effect of non-market-based vesting 
conditions. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects 
the revised estimate, with a corresponding adjustment to equity reserves.
Pension costs
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due. The Group had no defined benefit 
schemes in place during the years presented.
3. Critical accounting judgements and estimates
In the application of the Company and the Group’s accounting policies, which are described in note 2, the Directors are required to make 
critical accounting judgments and assumptions. The assumptions are based on historical experience and other factors that are considered 
to be relevant.
The following are the critical judgements that the Directors have made in the process of applying the Company and the Group’s accounting 
policies and that have the most significant effect on the amounts recognised in the financial statements.
Exploration and evaluation assets (Note 11)
The accounting for exploration and evaluation (“E&E”) assets requires management to make certain estimates and assumptions, including 
whether exploratory wells have discovered economically recoverable quantities of reserves. Designations are sometimes revised as new 
information becomes available. If an exploratory well encounters hydrocarbons, but further appraisal activity is required in order to conclude 
whether the hydrocarbons are economically recoverable, the well costs remain capitalised as long as sufficient progress is being made in 
assessing the economic and operating viability of the well. Criteria used in making this determination include evaluation of the reservoir 
characteristics and hydrocarbon properties, expected additional development activities, commercial evaluation and regulatory matters. The 
concept of ‘sufficient progress’ is an area of judgement, and it is possible to have exploratory costs remain capitalised for several years while 
additional drilling is performed or the Group seeks government, regulatory or partner approval of development plans.
Impairment indicators (Notes 11, 12)
The Group monitors internal and external indicators of impairment relating to E&E assets and property, plant and equipment. For E&E assets 
the following are examples of the types of indicators used: 
• The entity’s right to explore in an area has expired or will expire in the near future without renewal;
• No further exploration or evaluation is planned or budgeted;
• The decision to discontinue exploration and evaluation in an area because of the absence of commercial reserves; or
• Sufficient data exists to indicate that the book value will not be fully recovered from future development and production.
For development and producing oil and gas properties, the following are examples of the indicators used:
• A significant and unexpected decline in the asset’s market value or likely future revenue;
• A significant change in the asset’s reserves assessment;
• Significant changes in the technological, market, economic or legal environments for the asset; or
• Evidence is available to indicate obsolescence or physical damage of an asset, or that it is underperforming expectations. Financial Statements
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
55
The assessment of impairment indicators requires the exercise of judgement. If an impairment indicator exists, then the recoverable amounts 
of the cash-generating units and/or individual assets are determined based on the higher of value-in-use and fair values less costs of 
disposal calculations. These require the use of estimates and assumptions, such as future oil and natural gas prices, life of field, discount 
rates, operating costs, future capital requirements, decommissioning costs, exploration potential, reserves and operating performance. 
These estimates and assumptions are subject to risk and uncertainty. Therefore, there is a possibility that changes in circumstances will 
impact these projections, which may impact the recoverable amount of assets and/or Cash Generating Units (CGUs).
OML 40 licence extension (Note 12)
In line with the licence agreement, the Group has an option to request an extension of up to 20 years on the OML 40 licence at the current 
licence expiry date of June 2019, at additional cost, provided the terms of OML 40 have been complied with. There is a precedent for 
extension of licences in Nigeria and management believe that it is more likely than not that an extension of the licence to 2026 can be 
obtained. Any failure to secure the renewal of the OML 40 licence would have a material adverse impact on the Group’s estimated reserves 
and resources outlined earlier in this report and hence the Group’s ability to generate revenue beyond June 2019. An assumption that the 
licence is not renewed beyond its current expiry date of June 2019 does not however have a material impact on the reported financial results 
for 2014, including the depletion, depreciation and amortisation charge and the decommissioning liability recognised in the current year or 
the carrying value of the Group’s interest in OML 40 as at 31 December 2014. 
Ubima acquisition (Note 11)
Management has considered the criteria in IFRS 3 (2008) ‘Business Combinations’ in their assessment of whether the acquisition of its 
interest in the Ubima licence during the year was a business combination or an asset acquisition. The Ubima asset is still in the exploration 
and evaluation stage, with no operations or infrastructure and no proved or probable reserves as at the date of acquisition. On this basis, in 
management’s judgement, the Ubima acquisition constituted an asset acquisition and not a business combination, and accordingly 
management has recognised the consideration paid of $7 million as an addition to the Group’s E&E assets during the year.
Ubima carry arrangement (Note 11)
Under the terms of the Ubima sale and purchase agreement, the Group has agreed to fund capital and operating expenditure in respect of 
both its 40% interest in the Ubima asset and the remaining 60% owned by All Grace Energy Limited. The Group is exposed to substantially 
all the risks and rewards of the Ubima asset until the commencement of production, at which point, the amounts paid on behalf of All Grace 
Energy Limited would start to be recovered from future oil and gas revenue. On this basis, and in accordance with the Group’s accounting 
policy, the Group has recognised all of its own costs and the costs borne on behalf of All Grace Energy Limited incurred since acquisition of 
the Ubima asset ($1.0 million) as additions to the Group’s E&E assets.
Amounts payable to partners in oil and gas arrangements (Note 16)
In line with the Joint Operating Agreement (‘JOA’), the Group is responsible for its share of expenditures incurred on OML 40 in respect of its 
participating interest, on the basis that the operator’s estimated expenditures are reasonably incurred based on the approved programme 
and budget. Where management disputes such expenditures on the basis that they do not meet these criteria, management accrues at the 
period end for its best estimate of the amounts payable to the operator. The amounts recognised as accruals as at 31 December 2014, 
therefore, reflects management’s best estimate of amounts that have been incurred in accordance with the JOA and that will ultimately be 
paid to settle its obligations in this regard. To the extent additional amounts have been claimed by the operator, such amounts are disclosed 
unless the probability of payment is considered remote.
Contingent liability (Note 32)
The Group’s subsidiary, Wester Ord Oil & Gas (Nigeria) Limited may become, subject to certain conditions (see below), ultimately liable to 
pay a production bonus of $3 million to All Grace Energy Limited in respect of the transfer of a 40% interest in the Ubima Field. The payment 
is contingent on both receiving Nigerian Ministerial Consent to the transfer and attaining production volume of 2,000 barrels gross of crude 
oil per day on average over a thirty day period. Management consider that the asset is still in the exploration and evaluation stage, the Group 
is required to obtain DPR approval for a field development plan (“FDP”) and subsequently, be successful in developing and reaching 
production for the above obligation to arise. These events are not within the control of the Group and further, it is not uncommon in the oil 
and gas industry for these contingent events/milestones not to be achieved on any given E&E project. On this basis management has 
disclosed this amount as a contingent liability. Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
56
Notes to the Financial Statements continued
Year ended 31 December 2014
3. Critical accounting judgements and estimates continued
Estimates
The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that may have a 
significant risk of carrying a material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed 
below.
Carrying value of oil and gas assets (Note 12)
The carrying value of oil and gas assets is subject to judgement over their recoverable value. The calculation of recoverable value requires 
estimates of future cash flows within complex value-in-use models. Key assumptions and estimates in the cash flow models relate to 
commodity prices, discount rates that are adjusted to reflect risk specific to individual assets, commercial reserves and the related cost and 
production profiles.
Management assesses the Group’s oil and gas assets for indicators of impairment at least annually with reference to indicators as defined in 
IAS 36. Note 12 discloses the carrying value of tangible oil and gas assets. Due to the prevailing low oil prices, management have performed 
a full impairment review of the carrying value of the Group’s interest in OML 40 as at 31 December 2014 assuming a life of field to 2026, an 
oil price profile benchmarked to ICE commodity forward prices at 31 December 2014, management’s best estimates of proved and probable 
reserves and a 10% post-tax discount rate. On this basis, there was no indication of impairment of the carrying value of the Group’s oil and 
gas assets as at 31 December 2014.
Decommissioning provision (Note 19)
The Group has significant obligations to decommission and remove oil and gas facilities from its OML 40 licence at the end of the production 
period currently estimated to be 2026 – see the note on OML 40 licence extension above. Legal and constructive obligations associated with 
the retirement of non-current assets are recognised at their fair value at the time the obligations are incurred. Upon initial recognition of a 
liability, that cost is capitalised as part of the related non-current asset and allocated to expense over the useful life of the asset. 
Management apply judgement in deciding on an appropriate inflation rate to estimate costs in the future and also apply judgement in 
selecting a discount rate that reflects the time value of money and the risks specific to the liability, and in estimating the likelihood that the 
licence will be extended after its initial period, as further described in note 19.
The costs of decommissioning are reviewed annually. A review of all decommissioning cost estimates was undertaken by an independent 
specialist in 2013. This has been reassessed by the same independent specialist in early 2015, at the request of the Directors, and updated for the 
purposes of the 2014 financial statements. Provision for environmental clean-up and remediation costs is based on current legal and constructive 
requirements, technology and price levels.
It is difficult to estimate the costs of these decommissioning and removal activities, which are based on current regulations and technology, 
considering relevant risks and uncertainties. Most of the removal activities will be undertaken many years into the future and the removal 
technology and costs are constantly changing. As a result, the initial recognition of the liability and the capitalised cost associated with 
decommissioning and removal obligations, and the subsequent adjustment of these balance sheet items, involve the application of 
significant accounting judgement, further details of which are provided in note 19. 
Commercial reserves
Proved and probable reserves are estimates of the amount of oil and gas that can be economically extracted from the Group’s oil and gas 
assets. The Group estimates its reserves using standard recognised evaluation techniques. The estimate is reviewed annually.
Proved and probable reserves are determined using estimates of oil and gas in place, recovery factors and future commodity prices, the 
latter having an impact on the total amount of recoverable reserves. Future development costs are estimated taking into account the level of 
development required to produce the reserves by reference to operators, where applicable, and internal engineers. 
Reserves estimates are inherently uncertain, especially in the early stages of a field’s life, and are routinely revised over the producing lives of 
oil and gas fields as new information becomes available and as economic conditions evolve. Such revisions may impact the Group’s future 
financial position and results, in particular, in relation to D,D&A and impairment testing of oil and gas property, plant and equipment. Financial Statements
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
57
4. Revenue
An analysis of the Group’s revenue is as follows:
Continuing operations
Group
2014
$’000s
Group
2013
$’000s
Sale of oil 11,698 –
11,698 –
Total revenue derives from a single customer.
5. Loss for the year (Group)
The loss before taxation for the year has been arrived at after charging/(crediting):
2014 
$’000s
2013 
$’000s
Depreciation on property, plant and equipment (note 12) 1,440 186
Amortisation of other intangible assets (note 11) 531 –
Net foreign exchange (gains)/losses (141) 1,405
Wages, salaries and other employment costs* 9,086 6,642
(Reversal of accruals)/accruals** (8,250) 8,250
Provision** 2,250 –
*  Includes costs of $1,050,000 (2013: $839,000) relating to Non-Executive Directors’ fees and other temporary employment costs not included in note 7 below.
**  Reversal of accruals relates to the revision of estimated accrued amounts under an agreement with a service provider for logistical and general support services for which no 
invoices have been received by the Group since 2011. Furthermore, under the agreement any invoices which might be received would need to be approved by the Group at its 
sole discretion before payment. Having reviewed the services provided to date, management believe that the value of the services provided is much less than the figure 
previously accrued and that a provision of $2.25 million from inception of the agreement in 2011 to 31 December 2014, would be sufficient to cover the cost of services provided. 
Accordingly, the accrual of $8.25 million recognised in trade and other payables at 31 December 2013 has been reversed and a provision of $2.25 million (see note 17) has been 
made as at 31 December 2014.
6. Auditor’s remuneration
The analysis of auditor’s remuneration is as follows:
2014
$’000s
2013
$’000s
Fee payable to the Company’s auditor for the audit of the Company’s annual accounts 209 165
The audit of the Company’s subsidiaries pursuant to legislation 126 93
Total audit fees 335 258
2014
$’000s
2013
$’000s
Fees payable to the Company’s auditor and their associates for other services to the Group:
Tax compliance services 28 29
Tax advisory services 32 61
Other assurance services 25 59
Total non-audit fees 85 149
The tax services relate to UK and overseas tax advice, income tax advice and structuring advice.
The other assurance services relate to review of the Group’s Interim financial information. Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
58
Notes to the Financial Statements continued
Year ended 31 December 2014
7. Staff costs
The average monthly number of employees (including Executive Directors) was:
2014
No.
2013
No.
Management 3 3
Technical 9 4
Administration 19 11
31 18
Their aggregate remuneration comprised:
2014
$’000s
2013
$’000s
Wages and salaries 5,315 3,279
Social security costs 752 574
Share-based payments 1,508 1,457
Pension costs 461 493
8,036 5,803
The average monthly number of employees has been restated for 2013 to reclassify Technical employees previously included in the 
Administration line and to exclude temporary employees. A breakdown of Directors’ remuneration is included in the Remuneration Report.
The Group operates a defined contribution pension scheme, and has no obligation to pay any amounts other than the contributions. 
Obligations are recognised as staff costs and are expensed to the income statement in the periods during which related services are 
rendered by employees. Contributions owed to the scheme at 31 December 2014 amounted to $21,000 (2013: $14,000).
8. Finance costs
2014
$’000s
2013
$’000s
Unwinding of discount on decommissioning provision (note 19) 328 906
Other interest expense 11 12
Cost of obtaining loan finance facility* 1,173 –
Interest and fees charged on JV billings (9) –
1,503 918
* Relates to historical fees associated with obtaining and extending the Bridge loan facility which are being expensed over the availability period of the facility.
9. Tax
2014
$’000s
2013
$’000s
Current tax charge 215 315
Deferred tax credit (784) –
Total tax (credit)/charge for the year (569) 315
The standard rate of tax for the year is 65.75% (2013: 65.75%), being Nigerian Petroleum Profits Tax.
The total tax (credit)/charge can be reconciled to the loss per the income statement as follows:
2014
$’000s
2013
$’000s
Loss before tax on continuing operations (16,866) (25,827)
Loss on activities multiplied by the relevant rate of tax of 65.75% (2013: 65.75%) (11,089) (16,981)
Impact of tax rate differences (23,529) (21,206)
Temporary differences on which no deferred tax is recognised 1,359 40
Non-deductible expenses for tax purposes 215 4,542
Brought-forward losses utilised in the year – (125)
Losses not utilised in the period on which no deferred tax is recognised 33,044 34,045
Adjusted in respect of prior years 215 –
Recognition of previously unrecognised deferred tax asset (784) –
Total taxation (569) 315 Financial Statements
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
59
The following are the major deferred tax assets recognised by the Group and movements thereon during the current and prior reporting 
period:
Other 
Group
temporary 
difference 
$’000s
As at 1 January and 31 December 2013 –
Credit to income 784
As at 31 December 2014 784
Pioneer tax relief
When granted, Pioneer tax relief provides relief from Petroleum Profits tax for an initial period of three years and can be extended on an 
annual basis, at the agreement of the tax authorities, for an additional two years. Net aggregate tax losses arising in the pioneer relief period 
are available for carry forward to offset taxable profits arising in future periods, whilst losses generated prior to commencement of 
production and Pioneer tax status must be utilised to offset taxable profits generated prior to claiming the benefit of Pioneer tax relief. 
Management has made a judgement in relation to the Pioneer tax relief period in that they are confident the Group will be successful in 
obtaining the two annual extensions to the Pioneer tax relief period when the initial 3 year period expires in May 2017. However, this does not 
impact the 2014 results including in particular management’s decision to not recognise deferred tax on losses as at 31 December 2014 as 
forecasts supporting future profitability indicate that the asset will be utilised within three years i.e. by 31 December 2017. On expiry of 
Pioneer tax status, Elcrest is expected to be paying tax at 65.75% for five years and at 85% thereafter.
The Group has recognised a deferred tax asset of $784,000 as at 31 December 2014 in relation to the temporary difference that arises 
between the net book value and the tax written down value of the oil and gas assets. Capital allowances can be deferred during the Pioneer 
tax relief period and will be available following the tax relief period, whilst the book value of the asset is depreciated following 
commencement of production.
As at 31 December 2014, the Group has taxable losses of $130 million (2013: $77 million) for which no deferred tax asset has been 
recognised as it is not probable that there will be future taxable profits against which the asset will be offset. In particular, Elcrest Exploration 
and Production Nigeria Limited, which accounts for the majority of these tax losses ($119 million), was granted Pioneer tax status on OML 40 
during 2014. The company benefits from a three year tax relief period, with two further one year extension periods available on successful 
application. During the Pioneer tax relief period accumulated tax losses are required to be offset against taxable profits prior to applying the 
benefit of the tax relief period. The Group expects that the available tax losses will be fully utilised during the relief period and therefore no 
deferred tax asset has been recognised on the taxable losses. 
10. Earnings per share
Earnings per share (‘EPS’) is the amount of post-tax profit attributable to each ordinary share.
Diluted EPS takes into account the dilutive effect of share options being exercised.
From continuing operations
The calculation of the basic and diluted earnings per share is based on the following data:
Earnings
2014
$’000s
2013
$’000s
Earnings for the purpose of the basic earnings per share being net profit attributable to owners of the Company 10,671 1,923
Earnings for the purposes of basic and diluted earnings per share 10,671 1,923
Number of shares
2014
000s
2013
000s
Weighted average number of Ordinary Shares for the purposes of basic earnings per share 147,882 135,263
Equity options 201 3,040
Weighted average number of Ordinary Shares used in the calculation of diluted earnings per share 148,083 138,303
From continuing operations
Year ended
2014
$
Year ended
2013
$
Basic 0.07 0.01
Diluted 0.07 0.01
All activities relate to continuing operations.
For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potentially 
dilutive ordinary shares. The Company has one class of potential ordinary shares being share options. Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
60
Notes to the Financial Statements continued
Year ended 31 December 2014
11. Intangible oil and gas assets
Group
Exploration 
and evaluation 
assets
$’000s
Other 
intangible 
assets
$’000s
Total 
$’000s
Cost
At 1 January 2013 and 31 December 2013 – – –
Additions 7,950 3,936 11,886
At 31 December 2014 7,950 3,936 11,886
Amortisation
At 1 January 2013 and 31 December 2013 – – –
Charge for the year – (531) (531)
At 31 December 2014 – (531) (531)
Carrying amount
Balance at 1 January and 31 December 2013 – – –
Balance at 31 December 2014 7,950 3,405 11,355
The Group’s oil and gas exploration and evaluation assets at 31 December 2014 relate to the Group’s interest in the Ubima marginal field 
in Nigeria.
In August 2014, the Group’s subsidiary Wester Ord Oil & Gas (Nigeria) Limited (‘Wester Ord’) acquired a 40% participating interest in the 
Ubima field from All Grace Energy Limited (“All Grace”). Wester Ord paid a signature bonus of $7 million at completion and, contingent on 
both gross production of 2,000 bopd over thirty days and receipt of Nigerian Ministerial Consent to the transfer, a production bonus of $3 
million will become payable. This amount has not been provided in the financial statements as at 31 December 2014. It has been disclosed 
as a contingent liability (note 32). 
The Group has considered the definitions set out in IFRS 3 ‘Business Combinations’, and has concluded that a business has not been 
acquired and has accounted for the transaction as an asset acquisition as set out in the significant accounting policies on page 52.
Wester Ord has agreed to fund 100% of the initial work programme and will be entitled to 88% of production cash flow until the partner costs 
have been recovered. This carried interest arrangement represents, in substance, a disposal of exploration risks and rewards by All Grace.
The additions of $7.95 million recognised by the Group during the period from acquisition to 31 December 2014, therefore includes both the 
carried interest, amounting to $0.6 million, and the Group’s own costs.
The other intangible asset relates to the approval fee paid on grant of Pioneer tax status during 2014 (note 9). The cost is being amortised on 
a straight line basis over the maximum expected tax relief period of three years with two further annual periods of extension (note 3), and the 
charge for the year has been included within operating expenses in the income statement for the year ended 31 December 2014 (2013: nil).  Financial Statements
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
61
12. Property, plant and equipment
Group Note
Oil and gas 
development 
and 
production 
assets
$’000s
Fixtures and 
equipment
$’000s
Motor 
vehicles
$’000s
Total
$’000s
Cost
At 1 January 2013 174,777 174 95 175,046
Additions 6,541 513 – 7,054
Effect of changes to decommissioning estimates 19 (6,663) – – (6,663)
At 31 December 2013 174,655 687 95 175,437
Additions 14,139 299 – 14,438
Disposals – (88) – (88)
At 31 December 2014 188,794 898 95 189,787
Accumulated depreciation
At 1 January 2013 – (78) (54) (132)
Charge for the year – (156) (30) (186)
At 31 December 2013 – (234) (84) (318)
Charge for the year (1,193) (240) (7) (1,440)
Eliminated on disposal – 85 – 85
At 31 December 2014 (1,193) (389) (91) (1,673)
Carrying amount
At 31 December 2014 187,601 509 4 188,114
At 31 December 2013 174,655 453 11 175,119
The Group’s oil and gas development and production assets at 31 December 2014 and 31 December 2013 relate to the Group’s interest in 
OML 40 in Nigeria. An amount of $6.3 million (2013: $174.7 million) was classified as under development in relation to this asset as at the year 
end.
Production substantially commenced from the Group’s interest in OML 40 in July 2014 and accordingly the Group has recognised a depletion, 
depreciation and amortisation charge for the year of $1.2 million (2013: nil).
Company – Fixtures and equipment
Total
$’000s
Cost
At 1 January 2013 109
Additions 306
At 31 December 2013 415
Additions 226
Disposals (88)
At 31 December 2014 553
Accumulated depreciation
At 1 January 2013 (40)
Charge for the year (108)
At 31 December 2013 (148)
Charge for the year (133)
Eliminated on disposal 85
At 31 December 2014 (196)
Carrying amount
At 31 December 2014 357
At 31 December 2013 267 Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
62
Notes to the Financial Statements continued
Year ended 31 December 2014
13. Investments in Group undertakings
Company
$’000s
Cost and net book value at 1 January 2013 154,097
Additions 13,130
At 1 January 2014 167,227
Additions 14,187
At 31 December 2014 181,414
The additions in the year relate to the Company’s investment in Westport Oil Limited, Wester Ord Oil & Gas (Nigeria) Limited, Wester Ord Oil 
& Gas Limited and Tarland Oil Holdings Limited. 
The Group’s principal subsidiaries are listed below:
Nature of entity
Place of 
incorporation 
and operation
Proportion 
of ownership 
interest
Proportion of 
voting power 
held
Eland Oil & Gas (Nigeria) Limited Oil and gas exploration and production Nigeria 100% 100%
Elcrest Exploration and Production Nigeria Limited Oil and gas exploration and production Nigeria 45% 45%
Elstar Exploration and Production Nigeria Limited Dormant Nigeria 100% 100%
Wester Ord Oil & Gas (Nigeria) Limited Oil and gas exploration and production Nigeria 100% 100%
Westport Oil Limited Financing Jersey 100% 100%
Tarland Oil Holdings Limited Holding company Jersey 100% 100%
Wester Ord Oil & Gas Limited Holding company Jersey 100% 100%
In accordance with the Group’s accounting policy on page 50, Elcrest Exploration and Production Nigeria Limited has been consolidated 
because it is controlled by the Company. The Company has the power to affect the amount of returns for the following reasons:
• the Company is entitled to appoint a number of Directors to the Board such that it can control decision making; and
• in the event of disagreement amongst the Board of Directors, decisions are reached by shareholder vote and the Company has the 
ability, through the combined effect of a Shareholder Agreement, Loan Agreement and Share Charge, to direct the votes of the 55% 
shareholding that it does not own.
14. Inventory
Group
2014
$’000s
Group
2013
$’000s
Spare parts 353 –
353 –
15. Trade and other receivables
Group
2014
$’000s
Company
2014
$’000s
Group
2013
$’000s
Company
2013
$’000s
Amounts due from Group undertakings (note 31) – 48,009 – 40,289
Other debtors 433 401 2,039 1,986
Prepayments 3,997 1,484 2,155 1,370
4,430 49,894 4,194 43,645
The Directors consider that the carrying value of trade and other receivables is approximately equal to their fair value. Financial Statements
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
63
16. Trade and other payables
Group
2014
$’000s
Company
2014
$’000s
Group
2013
$’000s
Company
2013
$’000s
Amounts due to Group undertakings (note 31) – 444 – 356
Trade creditors 1,079 549 1,659 418
Accruals and deferred income 28,718 2,843 13,424 1,563
Corporation tax 214 214 315 315
Joint venture creditors 1,220 – – –
Other creditors (note 22) 5,000 5,000 5,000 5,000
36,231 9,050 20,398 7,652
Trade and other payables principally comprise amounts outstanding for trade purchases and ongoing costs. The Directors consider that the 
carrying amounts of trade and other payables are approximate to their fair values. All trade and other payables are denominated in Sterling, 
US dollars, Euros or Nigerian Naira.
Other creditors relates to a forward purchase arrangement, see note 22.
The Company has financial risk management policies in place with the aim that all payables to third parties are settled within the credit 
timeframe and no interest has been charged by any suppliers as a result of late payment of invoices during the period.
17. Other provisions
Group
2014
$’000s
Company
2014
$’000s
Group
2013
$’000s
Company
2013
$’000s
At 1 January – – – –
Provision in the year 2,250 – – –
At 31 December 2,250 – – –
The short-term provision as at 31 December 2014 of $2.25 million (2013: nil) represents management’s best estimate of the Group’s liability 
under an agreement with a service provider for logistical and general support services from 2011 to 31 December 2014 (see note 5) and is 
expected to be settled within 12 months.
18. Borrowings
Group
2014
$’000s
Group
2013
$’000s
Secured bank loan facilities with maturity date 24 February 2015:
Amount used – –
Amount unused 22,000 22,000
22,000 22,000
The $22 million loan facility (the ‘Facility’) with Standard Chartered Bank, which the Company initially entered into on 24 August 2012 for an 
18 month period, was extended for a further 12 months and expired on 24 February 2015. The Facility was available to the Group principally 
to allow Elcrest to meet its capital expenditure requirements. Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
64
Notes to the Financial Statements continued
Year ended 31 December 2014
18. Borrowings continued
Interest was payable on amounts outstanding from time to time at a rate equivalent to USD Libor plus a margin of 9%. All conditions 
precedent to access the Facility were met during December 2014. No amounts had been drawn by 31 December 2014 or at expiry on  
24 February 2015. As at 31 December 2014, the Group has also entered into a reserve-based facility as follows:
Group
2014
$’000s
Group
2013
$’000s
Reserve-based facility agreement with maturity date 30 June 2019:
Amount used – –
Amount unused 35,000 –
35,000 –
 
The RBL facility of up to $75 million with Standard Chartered Bank (SCB), which Westport (the Group’s finance vehicle) entered into on 31 
December 2014 is available to the Group to fund, amongst other things, capital expenditure obligations in respect of Elcrest’s participating 
interest in OML 40 and for the Group’s working capital purposes up to $5 million. The facility has a maturity of four and a half years from 31 
December 2014 and is repayable semi-annually from September 2016. 
 
The Facility, to which SCB has committed an initial $35 million, is a secured revolving loan facility and SCB has been mandated to syndicate 
a further $40 million to take the total of the facility to $75 million in 2015. Interest is payable on amounts outstanding on a quarterly basis at a 
rate equivalent to USD Libor plus a margin of 7.75%.
The facility is secured over the Company’s shares in Elcrest, and by way of a debenture which creates a charge over certain assets of the 
Group, including its bank accounts.
The size of the facility is subject to a cap determined by the borrowing base of OML 40 and the cap, which is currently $75 million, is 
re-determined every six months.
The facility has a maturity of four and a half years from 31 December 2014 repayable semi-annually from September 2016.
19. Decommissioning provision
2014
$’000s
2013
$’000s
At 1 January 11,978 17,735
Unwinding of discount (note 8) 328 906
Effect of changes to decommissioning estimates (note 12) – (6,663)
At 31 December 12,306 11,978
The provision for decommissioning is in respect of the Group’s interest in OML 40. The provision represents the present value of amounts 
that are expected to be incurred in 2026, discounted to the present value using a 2.75% discount rate (2013: 2.75%).
A corresponding amount equivalent to the initial provision is recognised as part of the cost of the related property, plant and equipment. The 
amount recognised is the estimated cost of decommissioning, discounted to its net present value, and is reassessed each year in 
accordance with local conditions and requirements, reflecting management’s best estimates.
The unwinding of the discount on the decommissioning is included in the Income Statement as a finance cost.
Changes in the estimated timing of decommissioning or decommissioning estimates are dealt with prospectively by recording an adjustment 
to the provision and a corresponding adjustment to property, plant and equipment.
During 2013, an independent specialist evaluated the decommissioning costs for the licence and the study led to the adjustment of the 
amounts previously provided for. The effect of this change along with revisions to the assumed inflation and discount rates, is reflected in the 
2013 comparative in the above table. The same independent specialist carried out a further validation in early 2015 of the assumptions and 
data contained within the 2013 report and confirmed there was no material change to the position. Management believes the estimates 
continue to form a reasonable basis for the expected future costs of decommissioning.
Prior to 2013, it was assumed that costs would be incurred at the expiry of the licence in 2019. In line with the licence agreement, the Group 
has an option to request an extension of up to 20 years on the OML 40 licence at the current licence expiry date of June 2019, at additional 
cost, provided the terms of OML 40 have been complied with. There is precedent for extension of licences in Nigeria and management 
believe it is more likely than not that an extension can be obtained. The date the costs are expected to be incurred has therefore been 
retained as 2026. Financial Statements
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
65
20. Share capital 
The authorised share capital of the Company at 31 December 2013 and 2014 was 175,000,000 ordinary shares of £1 each.
2014
$’000s
2013
$’000s
Authorised:
175,000,000 ordinary shares of £1 each 284,463 284,463
Allotted, issued and paid:
145,263,214 ordinary shares of £1 each (2013: 135,263,214) 231,391 214,768
10,000,000 non-voting shares of £1 each (2013: nil) 16,648 –
248,039 214,768
On 27 February 2014, the Company partially exercised options for 3,000,000 Ordinary Shares and 3,000,000 Non-Voting Shares in the 
Company under the Solstice Option Agreement and the Helios Option Agreement (‘the Agreements’), raising £6 million in total, at 100 pence 
per share.
Pursuant to the Helios Option Agreement, Helios Natural Resources Limited (‘Helios’) subscribed for 3,000,000 Non-Voting Ordinary Shares 
(‘Non-Voting Shares’) at a subscription price of 100 pence per share on 6 March 2014. The Non-Voting Shares rank pari passu in all respects 
with the existing Ordinary Shares save that the holders do not have the right to vote at any general meeting of the Company. The Non-Voting 
Shares are convertible to Ordinary Shares, on a one-for-one basis, subject to the restrictions contained in the articles of association. Under 
the articles of association, Helios may not convert its holding of Non-Voting Shares to Ordinary Shares if doing so were to increase its 
holding of Ordinary Shares, when taken together with any of its affiliates or persons acting in concert, to equal to or more than 30% of the 
current voting share capital of the Company. Following allotment of the outstanding share options from Solstice, some of the Helios Non-
Voting Shares may convert to Ordinary Shares up to a maximum holding of 29.6%.
Pursuant to the Solstice Option Agreement, Solstice International Investments Inc. (‘Solstice’) subscribed for 3,000,000 Ordinary Shares in 
the Company (‘Ordinary Shares’) at a subscription price of 100 pence per share on 12 March 2014.
On 26 March 2014, the Company exercised the remaining balance of the Options under the Agreements, raising a further £14 million in total 
at 100 pence per share. 
Pursuant to the Solstice Option Agreement, Solstice subscribed for 7,000,000 Ordinary Shares in the Company at a subscription price of 
100 pence per share. 3,000,000 of these shares were allotted on 30 April 2014. A further 4,000,000 shares subscribed for by Solstice were 
allotted on 18 November 2014.
The new Ordinary Shares rank pari passu in all respects with the existing Ordinary Shares.
Pursuant to the Helios Option Agreement, Helios subscribed for a further 7,000,000 Non-Voting Shares at a subscription price of 100 pence 
per share, on 4 April 2014.
Following the admission of the New Ordinary Shares and the issue of Non-Voting Shares in 2014, the Company’s issued share capital 
consists of 145,263,214 Ordinary Shares and 10,000,000 Non-Voting Shares.
21. Equity reserve
Group and Company
Equity
reserve
$’000s
Balance at 31 December 2013 8,008
Transfer to retained earnings/(losses) (8,008)
Balance at 31 December 2014 –
This reserve represented the equity component of convertible debt instruments that had been repaid or converted to equity in the previous 
periods and has been transferred to retained earnings during 2014.
22. Other reserve
Group and Company
Other reserve
$’000s
Balance as at 1 January 2013 (10,542)
Forward purchase arrangement over the shares of a subsidiary (5,000)
Balance as at 31 December 2013 and 31 December 2014 (15,542)
This reserve relates primarily to costs incurred in relation to funds raised on AIM in 2012. Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
66
Notes to the Financial Statements continued
Year ended 31 December 2014
22. Other reserve continued
The forward purchase arrangement relates to an agreement between the Company and Starcrest Nigeria Energy Limited for the purchase of 
an additional 4% share capital in Elcrest Exploration and Production Nigeria Limited.
23. Retained earnings/(losses)
Group
$’000s
Company
$’000s
Balance at 1 January 2013 (15,096) (3,631)
Profit for the year 1,923 799
Credit to equity-settled share-based payments 1,456 1,456
Balance as at 1 January 2014 (11,717) (1,376)
Profit/(loss) for the year 10,671 (7,236)
Credit to equity-settled share-based payments (note 29) 1,508 1,508
Transfer from equity reserve (note 21) 8,008 8,008
Balance as at 31 December 2014 8,470 904
24. Translation reserve
Prior to 1 January 2013 exchange differences relating to the translation of the net assets of the Company from its functional currency 
(British pounds sterling) to the Group’s presentation currency, US Dollars, were recognised directly in the translation reserve. From 
1 January 2013 the Company’s functional currency changed to US Dollars. As a result there is no movement on the reserve in the current 
year or the prior year.
Group
$’000s
Company
$’000s
Balance at 31 December 2013 and 31 December 2014 1,429 1,071
25. Non-controlling interests
Summarised financial information in respect of each of the Group’s subsidiaries that has material non-controlling interests is set out below. 
The summarised financial information below represents amounts before intragroup eliminations.
Elcrest Exploration and Production Nigeria Limited
2014
$’000
2013
$’000
Current assets 4,137 590
Non-current assets 191,828 174,657
Current liabilities (316,556) (247,134)
Non-current liabilities (12,306) (11,979)
Equity attributable to owners of the Company 59,767 37,704
Non-controlling interests 73,130 46,162
Revenue 11,698 -
Expenses (60,729) (51,029)
Loss for the year (49,031) (51,029)
Loss attributable to owners of the Company (22,063) (22,964)
Loss attributable to the non-controlling interests (26,968) (28,065)
Total comprehensive loss attributable to owners of the Company (22,063) (22,964)
Total comprehensive loss attributable to the non-controlling interests (26,968) (28,065)
Total comprehensive loss for the year (49,031) (51,029)
Dividends paid to non-controlling interests - -
Net cash inflow (outflow) from operating activities 3,170 (1,716)
Net cash outflow from investing activities (7,613) (4,631)
Net cash inflow from financing activities 7,187 6,696
Net cash inflow 2,744 349 Financial Statements
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
67
Group $’000s
Balance at 1 January 2013 (18,097)
Share of loss for the year (28,065)
Balance at 1 January 2014 (46,162)
Share of loss for the year (26,968)
Balance as at 31 December 2014 (73,130)
26. Notes to the cash flow statement
Group
2014
$’000s
2013
$’000s
Loss for the year before tax (16,866) (25,827)
Adjustments for:
Increase in provisions (note 17) 2,250 –
Share-based payments (note 29) 1,508 1,456
Finance costs (note 8) 1,503 918
Amortisation of intangible assets (note 11) 531 –
Depreciation of property, plant and equipment (note 12) 1,440 186
Unrealised foreign exchange losses on operating activities 238 1,234
Loss on sale of property, plant and equipment 1 –
7,471 3,794
Operating cash flows before movements in working capital (9,395) (22,033)
Increase in trade and other operating payables 4,645 10,813
Increase in trade and other operating receivables (589) (2,114)
4,056 8,699
Net cash used in operating activities (5,339) (13,334)
Company
2014
$’000s
2013
$’000s
(Loss)/profit for the year before tax (7,021) 1,114
Adjustments for:
Depreciation of property, plant and equipment (note 12) 133 108
Net finance income (1,818) (9,849)
Share-based payments (note 29) 1,508 1,456
Unrealised foreign exchange losses on operating activities 222 1,222
Loss on sale of property, plant and equipment 1 –
46 (7,063)
Operating cash flows before movements in working capital (6,975) (5,949)
Increase in trade and other operating payables 809 713
Increase in trade and other operating receivables (3,393) (8,046)
(2,584) (7,333)
Net cash used in operating activities (9,559) (13,282)
27. Segmental information 
The Directors believe that the Group has only one reportable operating and geographic segment, which is the exploration and production of 
oil and gas reserves in Nigeria. All operations are classified as continuing. The Board monitors the operating results of its operating segment 
for the purpose of making decisions and performance assessment. Segmental performance is evaluated based on operating profit or loss 
and is reviewed consistently with operating profit or loss in the consolidated financial statements.  Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
68
Notes to the Financial Statements continued
Year ended 31 December 2014
28. Operating lease arrangements
Group
2014
$’000s
Company
2014
$’000s
Group
2013
$’000s
Company
2013
$’000s
Minimum lease payments under operating leases recognised as an expense in the year 961 311 653 116
At the balance sheet date, the Group and Company had outstanding commitments for future minimum lease payments under non-
cancellable operating leases, which fall due as follows:
2014
$’000s
2013 
(restated)
$’000s
Within one year 347 223
In the second to fifth years inclusive 1,311 792
After five years 753 962
2,411 1,977
Operating lease payments represent rentals payable by the Group for certain of its office properties and staff residences. The 2013 number 
has been restated to exclude operating lease payments of $0.5 million that do not represent cash commitments at the year end.
29. Share-based payments
Equity-settled share option scheme
The Company operates an employee share option plan. Initially, share options were granted on 3 December 2012 to all Directors and key 
personnel of the Group comprising of 2,669,763 Founder options exercisable at £1.00 each, 8,210,000 share options exercisable at £1.00 
each and 368,500 share options exercisable at £1.13 each. During 2014, 65,000 share options at £1.25 each and 1,250,000 share options at 
£1.16 each were granted to employees. The options will be exercisable in full if the average closing price per share over any continuous thirty 
(30) day period, ignoring any days which are non-dealing days for AIM, occurring wholly during the period of 10 years from the date of grant, 
is equal to or greater than one hundred and fifty percent (150%) of the Placing Price. Management has determined a 70% probability of this 
condition being satisfied. All of the share options have a vesting period of three years from the date of grant except for Founder Options 
which have a vesting period of two years. The £1.00 Founder options are exercisable for a period of eight years (less one day) from the 
second anniversary of the date of grant. The other options are exercisable for a period of seven years (less one day) from the third 
anniversary of the date of grant. If the options remain unexercised after the day preceding the tenth anniversary of the date of grant the 
options expire. Details of the share options outstanding during the year are as follows:
2014 2013
Number of 
share options
Weighted 
average 
exercise 
price (£)
Number of 
share options
Weighted 
average 
exercise 
price (£)
Outstanding at the start of the year 11,248,263 1.00 11,248,263 1.00
Granted during the year 1,315,000 1.16 – –
Outstanding at the end of the year 12,563,263 1.02 11,248,263 1.00
Exercisable at the end of the year – – – –
The options outstanding at 31 December 2014 have a weighted average exercise price of £1.02, and a weighted average remaining 
contractual life of seven years and eight months. The aggregate of the estimated fair values of the options granted in 2014 was £245,000. 
The inputs into the Black-Scholes model in respect of the options granted during 2014 were as follows:
Year-end closing share price 71p
Weighted-average exercise price 115.5p
Expected volatility 25%
Expected life 3 years
Risk-free rate 2.5%
Dividend yield nil
Expected volatility was determined by calculating the historical volatility of the Company’s share price from the date of admission to AIM to 
the date of grant. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-
transferability, exercise restrictions, and behavioural considerations.
The Group recognised total expenses of $1,508,000 (2013: $1,456,000) related to equity-settled share-based payment transactions in 2014. Financial Statements
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
69
30. Financial instruments
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising the return to 
shareholders through the optimisation of the debt and equity balance. The Group’s overall strategy remains unchanged from 2013.
The capital structure of the Group does not include any debt as at 31 December 2014. Equity attributable to equity holders of the parent 
comprises issued capital, reserves and retained earnings as disclosed in notes 20 to 24.
The Group is not subject to any externally imposed capital requirements.
Principal financial instruments
The principal financial instruments used by the Group and the Company, from which financial instrument risk arises, are as follows:
• Trade and other receivables
• Trade and other payables
• Cash and bank balances
• Bank loans
Categories of financial instruments
At 31 December 2014, the Group and Company held the following financial assets:
Group
2014
$’000s
Company
2014
$’000s
Group
2013
$’000s
Company
2013
$’000s
Trade and other receivables (note 15) 446 48,364 1,990 42,205
Cash and bank balances 15,017 11,857 3,847 3,442
15,463 60,221 5,837 45,647
Of the cash balances of $15.0 million (2013: $3.8 million), $11.3 million (2013: $1.1 million) was denominated in US Dollars and $3.7 million 
(2013: $2.7 million) was denominated in Sterling. Naira denominated balances were immaterial.
Credit risk management
Credit risk arises from cash and cash equivalents and deposits with banks. Cash balances are held with banks with an ‘A’ rating or better 
where possible. There is believed to be insignificant credit risk associated with trade, other debtors and prepayments.
At 31 December 2014, the Group and Company held the following financial liabilities at amortised cost:
Group
2014
$’000s
Company
2014
$’000s
Group
2013
$’000s
Company
2013
$’000s
Trade creditors (note 16) 1,079 549 1,659 418
Amounts due to Group undertakings (note 16) – 444 – 356
Accruals and deferred income (note 16) 28,718 2,843 13,424 1,563
Joint venture creditor (note 16) 1,220 – – –
Other creditors (note 16) 5,000 5,000 5,000 5,000
36,017 8,836 20,083 7,337
Market risk
The Group’s and Company’s activities expose them primarily to the financial risks of changes in foreign currency exchange rates. There has 
been no change to the Group’s exposure to market risk or the manner in which these risks are measured and managed.
Foreign currency risk management
With effect from 1 January 2013, the functional currency of the Company changed from Sterling to US Dollars. The functional currency of the 
Group is now US Dollars. The change was triggered by the increasing influence of the US Dollar on its operations as its borrowing facilities 
and income are borrowings denominated in US Dollars.
The Group’s income, borrowings, and the majority of its costs, are denominated in US Dollars. The remainder of the costs are denominated 
in other currencies, predominantly Sterling and Nigerian Naira. The Group also has foreign currency denominated assets and liabilities. 
Exposures to exchange rate fluctuations therefore arise. The Directors currently believe that foreign currency risk is at an acceptable level. Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
70
Notes to the Financial Statements continued
Year ended 31 December 2014
30. Financial instruments continued
Foreign currency sensitivity analysis
Although the Group reports in US Dollars, elements of its business are conducted in Sterling and Nigerian Naira. The current exposure to 
foreign currency risk is manageable due to the predictability of transactions in these currencies.
If the US Dollar had strengthened by 10% against Sterling, with all other variables held constant, the post tax loss for the year would have 
been $0.7 million lower mainly as a result of differences of translation of Sterling denominated expenditure at lower rates of exchange.
If the US Dollar had weakened by 10% against Sterling, with all other variables held constant, the post tax loss for the year would have been 
$0.8 million higher mainly as a result of translating Sterling denominated expenditure at higher rates of exchange.
If the US Dollar had strengthened by 10% against Naira, with all other variables held constant, the post tax loss for the year would have been 
$0.4 million lower mainly as a result of translating Naira denominated expenditure at higher rates of exchange.
If the US Dollar had weakened by 10% against Naira, with all other variables held constant, the post tax loss for the year would have been 
$0.3 million higher as a result of translating Naira denominated expenditure at lower rates of exchange.
Liquidity risk management
Liquidity risk is the risk that the Group or Company will encounter difficulty in meeting its financial obligations as they fall due. Ultimate 
responsibility for liquidity risk management rests with the Board of Directors. In order to mitigate this risk, management regularly reviews 
liabilities to ensure these can be met as and when they fall due.
The Group manages liquidity risk by maintaining adequate reserves and reserve borrowing facilities and by continuously monitoring forecast 
and actual cash flows. Details of undrawn facilities that the Group has at its disposal to further reduced liquidity risk are set out in note 18.
Fair value of financial instruments
The Directors consider that the carrying amounts of financial assets and financial liabilities approximate their fair values, unless otherwise 
stated.
Maturity of financial assets and liabilities
All of the Group’s and Company’s financial liabilities and financial assets as at 31 December 2014 are either payable or receivable within one 
year. On this basis no maturity analysis has been disclosed.
Financial facilities
Loan Facility
The Group has loan facilities with Standard Chartered Bank. Details are given in note 18.
Interest rate risk management
As the Group utilises the RBL facility it will become exposed to potential adverse movements in the US Dollar Libor component of the rate.
31. Related Party Transactions
Group and Company
Loans to related parties:
2014
$’000s
2013
$’000s
Loans from Eland Oil & Gas PLC to Eland Oil & Gas (Nigeria) Limited 7,742 5,233
Loans to Eland Oil & Gas (Nigeria) Limited are short term and carry interest of 5% per annum.  Financial Statements
Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
71
Other transactions between the Company and Group undertakings
Eland Oil & 
Gas (Nigeria)
Limited 
$’000s
Elcrest
$’000s
Wester Ord 
Oil & Gas Ltd
$’000s
Wester Ord 
Oil & Gas 
(Nigeria) Ltd
$’000s
Westport
$’000s
Total
$’000s
Balance at 1 January 2013 3,081 24,933 – – – 28,014
Transactions during the year ended 31 December 2013:
Management fees – 3,011 – – – 3,011
Costs recharged 2,663 70 – – 51 2,784
Exchange differences 83 1,164 – – – 1,247
Balance at 31 December 2013 5,827 29,178 – – 51 35,056
Transactions during the year ended 31 December 2014:
Management fees – 3,250 – – – 3,250
Costs recharged 2,467 2,781 16 425 86 5,775
Interest on loans to related parties 664 – – – – 664
Reimbursement of costs recharged – (4,474) – – – (4,474)
Exchange differences (1) (2) – (1) – (4)
Balance at 31 December 2014 8,957 30,733 16 424 137 40,267
Trading transactions
Purchase of 
services
2014
$’000s
Purchase of 
services
2013
$’000s
Novum Securities Ltd 200 –
200 –
Novum Securities Ltd is a related party of the Group because Henry Turcan holds directorships in both Novum Securities Ltd and Eland Oil 
& Gas PLC. 
The amount disclosed above represents outstanding amounts due to Novum Securities Ltd as at the date Henry Turcan was appointed to 
the Board of Directors of Eland Oil & Gas PLC. No further transactions have taken place with Novum Securities Ltd since his appointment.
The amounts outstanding were unsecured and have been settled as at the date of signing these accounts. 
During the year, Eland Oil & Gas (Nigeria) Limited paid costs of $116,000 (2013: $3,743) on behalf of the Company. A balance of $444,000 
(2013: $328,000) remained outstanding as at 31 December 2014.
Remuneration of key management personnel
The remuneration of the Directors, who are the key management personnel of the Group, is set out below in aggregate for each of the 
categories specified in IAS 24, Related Party Disclosures.
2014
$’000s
2013
$’000s
Wages and salaries 2,043 2,196
Pension 112 85
Social security costs 186 203
Share-based payments 1,136 1,374
3,477 3,858
Further details can be found in the Directors’ Remuneration Report on pages 38 to 40. Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
72
32. Contingent liability – Ubima production bonus
The Group’s subsidiary, Wester Ord Oil & Gas (Nigeria) Limited may become liable to pay a production bonus of $3,000,000 to All Grace 
Energy Limited in respect of the transfer of a 40% interest in the Ubima Field. The payment is contingent on both receiving Ministerial 
Consent to the transfer and attaining production volume of 2,000 barrels gross of crude oil per day on average over a thirty day period. No 
provision has been made in these financial statements as management do not consider that the payment is probable at this stage. See note 
11 for further details of the Ubima acquisition.
 
33. Post-balance sheet events 
Availability and utilisation of $35m reserve based lending (RBL) facility
In April 2015, all of the conditions precedent to the RBL facility were deemed satisfied and accordingly, the initial $35m facility became 
immediately available to the Group. Westport Oil Ltd has subsequently drawn down $10m from the facility, on the terms outlined in note 18.
Operatorship of OML 40
The Group announced on 11 May 2015 that Elcrest had received confirmation from the Department of Petroleum Resources (“DPR”) that 
Elcrest had fulfilled its obligations, including the payment of the requisite premium and fees of $2.3 million to the DPR, in relation to Elcrest’s 
appointment as operator of OML 40 for a minimum 10 year period. The Joint Operating Agreement is under review by all parties with signing 
expected in the near future.
Notes to the Financial Statements continued
Year ended 31 December 2014 Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
73
Other Information
Cautionary statement regarding forward-looking statements
This Annual Report contains forward-looking statements which are made in good faith and are based on current expectations or beliefs, as 
well as assumptions about future events. You can sometimes, but not always, identify these statements by the use of a date in the future or 
such words as ‘will’, ‘anticipate’, ‘estimate’, ‘expect’, ‘project’, ‘forecast’, ‘intend’, ‘plan’, ‘should’, ‘may’, ‘assume’ and other similar words. By 
their nature, forward-looking statements are inherently predictive and speculative and involve risk and uncertainty because they relate to 
events, and depend on circumstances, that will occur in the future. You should not place undue reliance on these forward-looking 
statements, which are not a guarantee of future performance and are subject to factors that could cause actual results to differ materially 
from those expressed or implied by these statements. The Company undertakes no obligation to update any forward-looking statements 
contained in this Annual Report, whether as a result of new information, future events or otherwise.
Forward-looking Statements Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
74
United Kingdom
Registered Office 
34 Albyn Place
Aberdeen
AB10 1FW
Head Office
Seabrokers House 
Prospect Road 
Westhill 
AB32 6FE
Tel: +44 (0)1224 737300
London 
2nd Floor
43-44 New Bond Street 
London 
W1S 2SA 
Tel: +44 (0)207 016 3180
Nigeria
Abuja
10 Osun Close 
Maitama 
Abuja
Tel: +234 9 623 3008
Email: info@elandoilandgas.com
www.elandoilandgas.com
Shareholder Information Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
75
Other Information
Directors and Advisers
Directors
George Walter Mitchell Maxwell, Chief Executive Officer
Louis Emmanuel Castro, Chief Financial Officer 
Henry George Wilson, Executive Chairman
Robert Alexander Lambert, Non-Executive Director & Senior Independent Director
Russell Seth Harvey, Non-Executive Director
Dr. Richard Norris, Non-Executive Director
Henry Turcan, Non-Executive Director
Secretary
Stronachs Secretaries Limited
34 Albyn Place 
Aberdeen 
AB10 1FW
Bankers
Standard Chartered Bank 
1 Basinghall Avenue 
London
EC2V 5DD
United Kingdom
The Royal Bank of Scotland Plc 
RBS London Corporate Bank Centre 
PO Box 39952
2 
1
/2 Devonshire Square
London, 
EC2M 4XJ 
United Kingdom
Standard Chartered Bank 
Muhammadu Buhari Way 
Garki
Area 11 
Abuja 
Nigeria
Solicitors
Bracewell & Giuliani (UK) LLP
Tower 42
25 Old Broad Street
London
EC2N 1HQ
Stephenson Harwood
1 Finsbury Circus 
London
EC2M 7SH 
United Kingdom
Streamsowers & Köhn 
16D, Akin Olugbade Street 
Victoria Island
Lagos
Nigeria
Independent Auditor
Deloitte LLP
Union Plaza
1 Union Wynd 
Aberdeen
AB10 1SL Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
76
Glossary
£ GB pounds sterling unless otherwise stated
$ US dollars unless otherwise stated
1P Proved Reserves
2P Proved and Probable Reserves
3P Proved plus Probable plus Possible Reserves
2D or 2D Seismic Seismic data which is acquired along a line with a ‘Shot and Receiver’ configuration that allows the signal-to-
noise ratio to be enhanced by linear stacking of the reflections caused by subsurface interfaces between rocks 
with different acoustic properties
3D or 3D Seismic Seismic data which is acquired in a multi-azimutual pattern and processed such that the signal-to-noise ratio is 
enhanced by three dimensional stacking of the reflections caused by subsurface interfaces between rocks with 
different acoustic properties
AIM The market of that name operated by the London Stock Exchange plc
Amocon Amalgamated Oil Company Nigeria Limited
API American Petroleum Institute
bbl/bbls Barrel/barrels
Bcf Billion standard cubic feet
bpd Barrels per day
bopd Barrels of oil per day
CGU Cash generating unit
Company Eland Oil & Gas PLC
Contingent 
Resources/CR
Those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known 
accumulations by application of development projects but which are not currently considered to be commercially 
recoverable due to one or more contingencies. Contingent Resources are a class of discovered Recoverable 
Resources.
CPR Competent Person’s Report
cu ft Cubic feet
EBITDA Earnings Before Interest, Taxes, Depreciation and Amortisation
Elcrest Elcrest Exploration and Production Nigeria Limited
EIA Environmental Impact Assessment
ENI Eni S.p.A., the parent company of NAOC
E&P Exploration and Production
FCPA Foreign Corrupt Practices Act
FDP Field Development Plan
GOR Gas Oil Ratio
Group The Company and all of its subsidiaries
IAS International Accounting Standard(s)
ICE Intercontinental Exchange
IOC International Oil Company
IFRS International Financial Reporting Standard(s)
JOA Joint Operating Agreement Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
77
Other Information
km Kilometres
km
2
Square kilometres
Lead A project associated with a potential accumulation that is currently poorly defined and requires more data 
acquisition and/or evaluation in order to be classified as a prospect
mbopd Thousands of barrels of oil per day
mmbopd Millions of barrels of oil per day
mmbbl Million barrels
mbbl Thousand barrels
NAOC Nigerian Agip Oil Company Limited
NNPC Nigerian National Petroleum Corporation
NPDC Nigerian Petroleum Development Company Ltd
NSAI Netherland, Sewell & Associates Inc.
OECD Organisation for Economic Co-operation and Development
OML 40 Oil Mining Lease 40
OML 49 Oil Mining Lease 49
OPL 452 Oil Prospecting Licence 452
PPT Petroleum Profits Tax
Prospective 
Resources/PR
Those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered 
accumulations by application of future development projects. Prospective Resources have both an associated 
chance of recovery and a chance of development. Prospective Resources are further subdivided in accordance 
with the level of certainty associated with the recoverable estimates assuming their discovery and development 
and may be sub-classified based on project maturity
Proved Developed 
Reserves
Proved Reserves that can be produced with existing wells and perforations, or from additional reservoirs where 
minimal additional capital investment is required
Proved Undeveloped 
Reserves
Proved Reserves that require additional capital investment to bring the oil to the surface
Proved Reserves 
(‘Proved’)
Those quantities of petroleum, which by analysis and geoscience, can be estimated with reasonable certainty to 
be commercially recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated 
Proved Reserves
Probable Reserves 
(‘Probable’)
Those additional reserves that are less likely to be recovered than Proved Reserves but more certain to be 
recovered than Possible Reserves. It is equally likely that actual remaining quantities recovered will be greater 
than or less than the sum of the estimated Proved plus Probable Reserves
Possible Reserves 
(‘Possible’)
Those additional reserves which analysis and geoscience and engineering data suggest are less likely to be 
recovered than Probable Reserves. The total quantities ultimately recovered from the project have a low 
probability to exceed the sum of Proved plus Probable plus Possible Reserves
PVT Pressure, volume, temperature
QCA Quoted Companies Alliance
RPS RPS Energy Consultants Limited
RFT Repeat Formation Tester
SCB Standard Chartered Bank Plc
Shell or SPDC Shell Petroleum Development Company of Nigeria Limited unless otherwise stated
tcf Trillion standard cubic feet
Total Total E&P Nigeria Limited
Glossary continued Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
78
Notes Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
79
Other Information Eland Oil & Gas PLC Annual Report 
and Financial Statements 2014
80
Notes  FSC LOGO Eland Oil & Gas PLC
Registered office:
34 Albyn Place
Aberdeen
AB10 1FW
Scotland
www.elandoilandgas.com
Eland Oil & Gas PLC Annual Report and Financial Statements 2014