Annual Report and
Financial Statements
2016
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 2016 Communiqué Associates Limited, Edinburgh www.communique-associates.co.uk
2016 OPERATIONAL HIGHLIGHTS
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.
UBIMA FIELD CPR PUBLISHED APRIL 2016
2.4
***
mmbbl (gross) 2P Reserves
31.1
***
mmbbl (gross) 2C Resources
* Initial Opuama-3 daily flow rate, April 2016 which stabilised at 8,500 bopd in 2017.
**  Source: Independent Report by Netherland Sewell & Associates Inc. June 2015.
***  Source: Independent Report by AGR TRACS April 2016.
****  Source: Independent Report by Netherland Sewell & Associates Inc. April 2016 and April 2017.
$2m
Cost of  
Opuama-3 workover
10,500
*
bopd (gross)
Opuama-3 flow-rate
83.2
**
mmbbl (gross) 2P Reserves
Opuama and  
Gbetiokun Fields
41.2
**
/
****
mmbbl (gross) 2C Resources
OML 40
OML 40 IN NIGERIA IS ELAND’S CORE ASSET Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
1 Strategic Report Governance Financial Statements Other information
●     Challenging year due to prolonged Forcados shut-in and reduced 
revenues, requiring careful working capital management.
●     Cash currently at $6 million with active working capital management  
to bridge return to Forcados pipeline cash flows.
●    Successful equity placing in April 2016 raised $18.5 million (gross) to 
support the planned work programme.
●    $15m of the Reserve Based Lending (“RBL”) facility with Standard 
Chartered Bank had been drawn down by 31 December 2016. The 
borrowing base amount was $25 million in 2016 with $3.5 million 
held in reserve until return to production. The facility underwent a 
redetermination in early 2017 with the borrowing base confirmed at  
$23.9 million, and the $3.5 million reserve requirement released.
●    Elcrest continues to benefit from Pioneer Tax status in respect of  
OML 40. Elcrest is exempt from paying Petroleum Profits Tax during  
the Pioneer period and in addition has an estimated $433 million tax loss 
pool subject to agreement by the Nigerian tax authorities to be utilised to 
offset future taxes.
●    Elcrest has recognised a $17.25 million liability to its local shareholder 
for management fees accruing since inception and invoiced subsequent 
to the period. Elcrest’s liability to Eland for the same had already been 
recorded. Therefore, Eland, through its subsidiary Westport, now has an 
amount to recover from Elcrest of $380.2 million in principal and interest 
as at 31 December 2016 and remains the sole secured creditor.
Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
2
2016 HIGHLIGHTS AND 2017 DEVELOPMENTS
100
%
 
of Opuama crude lifted by Shell 
from Forcados in 2016
11,500
current production,  
May 2017 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
3 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
3
OUTLOOK CONTENTS
Strategic Report
Highlights and Developments ...........2
Outlook ......................................................3
Chairman’s Statement ..........................4
Chief Executive Officer’s Report ......6
Eland at a Glance ...................................8
A Year of Challenges  
and Development .................................10
Market Overview .................................. 11
Strategy in Action .................................12
Financial Review ...................................22
Key Performance Indicators............ 24
Corporate Social Responsibility .....25
Principal Risks and Uncertainties .. 26
Governance 
Board of Directors ...............................28
Senior Management ...........................30
Directors’ Report ..................................32
Corporate Governance Report ...... 34
Directors’ Responsibility  
Statement................................................37
Directors’ Remuneration Report ... 38
Financial Statements
Independent Auditor’s Report ....... 42
Consolidated Income Statement ..44
Consolidated Balance Sheet ........... 45
Company Balance Sheet ..................46
Consolidated Statement of 
Changes in Equity ................................47
Company Statement of
Changes in Equity ............................... 48
Consolidated Cash Flow  
Statement............................................... 49
Company Cash Flow Statement ....50
Notes to the  
Financial Statements ...........................51
Other Information
Forward-looking Statements .......... 83
Shareholder Information .................. 84
Directors and Advisers ...................... 85
Glossary .................................................. 86
●    The Opuama field in OML 40 recommenced production in January 
2017 at initial rates of c.10,000 bopd from a single well before 
stabilising at 8,500 bopd. 
●    Updated CPR for four wells in OML 40 which trebled gross 2P 
reserves to 33mmbbl of oil.*
●    Eland has reacted decisively to the shut-in at Forcados by developing 
an alternative export solution, with c.500k barrels of crude having 
been exported via shipping to an offshore FPSO. Multiple cargoes 
have been delivered in the year to date. This followed an 11-month 
hiatus for the field caused by the shut-down of the Forcados terminal. 
●    Eland has recently returned to production in May 2017 via Forcados 
with c.11,500 bopd produced from 2 wells (Opuama-1 and Opuama-3). 
●    Following the highly successful workover on Opuama-3 in April 
2016, Eland now plans to perform a sidetrack on Opuama-7 in early 
H2 2017, potentially boosting production from the field by a further 
6,000 bopd gross.**
●    The company also plans to complete an Early Production System 
(EPS) on Gbetiokun-1 in OML 40 with a well recompletion planned 
for H2 2017. This could contribute an initial gross 7,800 bopd to OML 
production.**
●    An EPS on the Ubima field is planned to follow with the re-entry  
and completion of Ubima-1 potentially contributing production of 
2,500 bopd.**
●    Expected 2017 near-term production rate of 17,500 bopd, which will 
be driven by the phasing of, and flow rates from, Opuama-7. Further 
upside remains after Gbetiokun-1 and Ubima-1 brought on stream.
●    Continue to focus on cost reductions and working capital 
management as further discussed in the CFO statement.
*  Source: Independent Report by Netherland Sewell & Associates Inc. April 2016 and April 2017.
** Subject to available capital. Strategic Report Governance Financial Statements Other information
Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
4
CHAIRMAN’S STATEMENT
2016 was again a challenging year for the Nigerian oil 
industry despite the increase in the oil price. Eland 
responded very well to this situation by developing 
alternative export routes for the companies crude, 
whilst also delivering its best production test rates 
todate from OML 40. I believe that the Company is now 
in its strongest operational and production position 
to date to enable further growth and value for our 
shareholders to be delivered, but there are short term 
working capital challenges to be navigated which are 
discussed further in the CFO’s report. 
A difficult start to 2016 saw oil prices reaching 13-
year lows below $30 per barrel, although subsequent 
concerns about a supply squeeze led to a recovery 
throughout the remainder of the year. As a result, Brent 
ultimately doubled from its lows to end the year at $57 
per barrel. A perceived slowdown in US shale supplies 
because of the lack of investment and critically low rig 
utilisation rates was coupled with OPEC announcing 
a reduction in production quotas. Whilst this was 
reflected positively in commodity prices, it did little 
to reinvigorate investment in the oil and gas industry 
globally, including Nigeria. Ongoing sabotage activities 
within the country further impacted the oil industry and 
Eland was not immune to this, with the Shell-operated 
Forcados oil terminal being shut-in from February for 
the remainder of the year. 
Considering these circumstances, I believe that Eland 
had a very good year. In April, despite Forcados being 
shut-in, we performed a successful workover and a 
production test on our Opuama field in OML 40, with 
the Opuama-3 well producing in excess of 10,500 
barrels of oil per day, the highest rate ever recorded 
from a single well in OML 40. 
With the Forcados terminal being shut-in in February 
after militant activity in the Niger Delta, and a lack of 
clarity throughout last year as to when it may come 
back on-line, we took the decision to investigate 
alternative export routes for our crude rather than 
to simply evacuate it via pipeline. We commenced 
the development of a shipping option, involving 
transporting our oil to a secure offshore facility via the 
Benin River. I am extremely proud of this achievement 
and in particular the speed with which this project was 
completed. This is a testament both to the quality of 
our team and the relationship with our joint venture 
partner.
As a result of this very successful work, production 
from OML 40 recommenced in 2017 at initial rates 
of 10,000 barrels of oil per day, and is currently at a 
stabilised rate of 11,500 bopd, which compares to the 
rates of 4,400 barrels of oil per day that the field was 
producing at prior to being shut-in in February 2016. I 
believe this highlights the prodigious nature of these 
world-class reservoirs and gives me great confidence in 
the growth potential of our asset base. 
We continue into 2017 confident in the next phase 
of our growth with plans for additional field work 
which has the potential to more than double current 
production.
On the financing side of the business, Eland 
successfully completed an equity placing in April 2016 
to raise funds of $18.5 million at a price of 34 pence  
per share.
Russell Harvey
Chairman
We continue into 2017 confident 
in the next phase of our growth 
with plans for additional field 
work which has the potential 
to more than double current 
production. OUR BUSINESS 
MODEL
Expertise
Experienced management 
team with over 100 years of 
in-country experience
+ 
Track record
A team with a history of 
success in identifying and 
developing oil and gas assets
+ 
Local footprint
Operational senior 
management based in Nigeria 
with strong relationships and 
local knowledge
+ 
High quality 
assets
Significant development 
and exploration upside 
on OML 40 and OML 17 as 
well as attractive growth 
opportunities in Nigeria
= 
Maximised 
production
Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
5
During the year there were a number of changes to the board. In May, 
Louis Castro retired from his role as Chief Financial Officer, and was 
replaced by Olivier Serra. In July we also announced the appointment of 
Henry Obi to the Board as a Non-Executive Director representing Helios 
Natural Resources, a significant shareholder in Eland. Henry replaced 
Richard Norris who had been Helios’ representative on the Board since 
September 2014.
Eland has weathered the unforeseen events of 2016 and is now enjoying 
a period of stabilised oil prices and the recommencement of production 
at OML 40. The planned 2017 work program should provide a further 
step change in production growth with a low level of associated capital 
expenditure. I remain confident that both the team and asset base will 
deliver in 2017.
Russell Harvey 
Chairman
6 June 2017
“In April we performed a successful 
workover and production test on our 
Opuama field in OML 40, with the 
Opuama-3 well producing in excess  
of 10,500 barrels of oil per day, the  
highest rate ever recorded from a single 
well in OML 40.” Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
6
Strategic Report Governance Financial Statements Other information
CHIEF EXECUTIVE OFFICER’S REPORT
George Maxwell  
Chief Executive Officer
The prospects for Eland have 
never been more exciting.  
Eland’s value will be delivered 
from ongoing investment in our 
drilling programme.
Despite the enforced closure of the Forcados terminal 
in February, Eland ended 2016 on a highly positive 
note and has since, through Elcrest, reached record 
production levels from OML 40 onshore Nigeria. The 
business model has been validated with the result of 
two separate workover wells which boosted gross 
production from c3,000 bopd in late 2015 to 8,500 
bopd during shipping and current levels of 11,500 bopd. 
Furthermore, two additional near term workovers are 
planned on OML 40, production could potentially more 
than double again during 2017 subject to sustained 
production and capital availability. While the outlook on 
our opportunities look very promising, 2016 has been 
a very difficult year. Low oil prices combined with the 
production shutdown for over 10 months, resulted in a 
variety of measures being put in place to reduce cash 
expenditures and closely manage our working capital 
situation. This was a very ‘hands on’ approach by the 
management of Eland and Elcrest. With production 
now re-started our working capital management 
continues as crude oil receipts continue to build.
Opuama-1 production restart and Forcados 
Following a highly successful and low cost workover 
of Opuama-1 in late 2015, gross production from the 
field increased by more than 50% to 4,500 bopd, and 
remained at these higher levels heading into 2016. It 
was therefore frustrating for Eland and its shareholders 
when the Forcados terminal, the primary destination 
for its crude, had a pipeline sabotaged by militants 
in February. The resulting closure and force majeure 
remained in place for the rest of the year, despite a brief 
reopening in November. 
Opuama-3 workover and production test
If a single well could be shown to prove that the well 
re-entry strategy works, then it would be the Opuama-3 
workover. The $2 million workover, which was prognosed 
to deliver 2,000 to 4,000 bopd from the D1000 and 
D2000 reservoir intervals, was completed in April. The 
workover produced oil at rates of more than 10,500 
bopd during a short-term test, vastly outperforming 
initial expectations. Since coming onstream in early 2017, 
stabilised rates of around 8,500 bopd from Opuama-3 
alone have been achieved.
Equity raise to bolster operations 
With the lack of cash flow as a result of the Forcados 
terminal being shut in, and a lack of clarity on when 
it might reopen, the decision was made by Eland to 
bolster the balance sheet via an equity raise in April 
2016. The Company felt it was important to have the 
funding in place to provide funding initially designated 
for near term Gbetiokun 1 workover, and subsequently 
utilised in part to develop a supplementary export 
route for OML 40 production, especially after such a 
positive result on Opuama-3. The accelerated book-
build was very successful, raising $18.5 million gross in 
an oversubscribed placing.  
Oil price fluctuations in 2016
The oil price experienced significant volatility during 
2016, declining to a 10-year low of $27 per barrel in 
February before a sustained recovery throughout 
the remainder of the year saw it more than double. 
Volatility has reduced in the first few months of 2017 
with a relatively stable Brent price within the $50 to 
$55 per barrel range. 
Planning and contracting for tankering and 
engineering of tie in point
Throughout the summer work continued on two 
supplementary and independent export routes from 
OML 40 to diversify crude deliveries. Barging proposals 
were reviewed with options for logistics, storage and 
offtake all finalised. Preparation for the installation of a 
dedicated 6 km pipeline extension directly into a nearby 
terminal also continued. A tie-in point into the OML 40 
export line for barging operations and Gbetiokun crude 
injection point was also completed. Barging of OML 40 
crude commenced in late January 2017. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
7
The planning required to contract the barging solution 
included both the logistical and engineering solutions 
required to facilitate such a complex operation. Late 
in 2016 when it became clear that Forcados terminal 
would remain unavailable to Elcrest, the planning work 
completed earlier in the year allowed an acceleration 
of the execution phase. Contracting on Tankers and 
off take agreements were completed within six weeks 
which linked well with the completion of engineering 
works on the Benin river.
The operation, and in particular, the aspects under 
Elcrest control have performed extremely well, with 
limited downtime or interruption. However, the FPSO 
system has suffered some difficulties and downtime 
associated with the discharge of crude oil, and 
approximately $8 million of receivables are pending 
subject to technical resolution. The Group has managed 
this delay by agreeing the deferral of a number of 
creditors, and linking their final settlement to the 
final discharge date. The shipping system is readily 
repeatable as and when required, with a review of the 
ultimate point of crude oil discharge being a key focus 
of any future operation. Many opportunities exist in 
OML 40 for accelerated production from stranded 
fields through shipping operations.
CPR update commissioned and trebles reserves
In early 2017 we commissioned a Competent Person’s 
Report (CPR) on the Opuama-1, Opuama-3, Opuama-7 
and Gbetiokun-1 wells. This was done with a view to 
confirming our internal view that these reserves were 
better than previously anticipated. In the event we were 
proved correct as the CPR returned with a trebling of 
its estimate of recoverable reserves from these four 
wells alone. This is highly encouraging and an extremely 
positive indication of the potential upside within the 
rest of OML 40. 
Planning Opuama-7 rig access and workover operations
Looking to 2017 plans, Eland is currently preparing for 
the next workover on the Opuama field. Drilling of the 
well should commence early in the second half of the 
year, with a CPR forecasting initial production rates of 
6,000 bopd, therefore potentially boosting near term 
overall production from OML 40 to around 17,500 bopd.
The contract for the rig and services has been 
fully negotiated and mobilisation is expected to be 
approximately one month from final execution.
Ubima well access and road construction
The work late in 2016 to prepare the well site and site 
road access involved considerable community contractor 
involvement. This work will continue when the season 
allows to enable the continued development of the 
Ubima 1 EPS.
Elcrest and Shareholder Agreement
Although 2016 had the positives of a very successful 
workover of Ouama-3 and the launch of Elcrest’s 
secondary export route from OML 40, due to Elcrest 
only producing for one and a half months in the year, 
Elcrest still made a significant operating loss. Therefore, 
Eland, through our subsidiary Westport, now has an 
amount to recover from Elcrest of $380.2 million as at 
31 December 2016 in principal and interest and remains 
the sole secured creditor.
Subsequent to year end, Elcrest received a fee 
invoice from its local shareholder. This fee related 
to management charges agreed at the onset of the 
joint venture of $3m per annum for each shareholder, 
which by the end of 2016 totalled $17.25 million per 
shareholder. In prior periods Eland and Elcrest had 
understood that Elcrest’s local shareholder would not 
exercise its ability to levy these charges. Eland has now 
also formally invoiced the corresponding amounts. The 
payment profile for settlement of these liabilities is yet 
to be agreed, but it is intended this will be settled from 
free cash generated from increasing OML 40 production.
CSR projects
Elcrest has continued with a number of CSR projects 
during the year within OML 40. The construction of 
a walkway in Tsekelewu community to allow ease of 
movement between the community during the wet 
season and also the completion of a wharf and market 
area within the Opuama community, allowing market 
and fishing enterprises to flourish.
In both Opuama and Ubima we continued with our 
medical outreach program, ensuring free health check 
within the communities.
Outlook
The prospects for Eland have never been more exciting. 
The prolonged shut in to Forcados and the interruptions 
and delays experienced during the shipping period and 
transition back to Forcados have necessitated and will 
continue to require careful working capital management. 
Eland’s value will be delivered from ongoing investment 
in our drilling programme. Whilst 2017 will not be 
without its challenges and availability of capital will 
dictate the timing and schedule of our investment 
programme, the opportunity to more than double 
production once again at limited cost and without any 
exploration risk is very attractive.
George Maxwell 
Chief Executive Officer 
6 June 2017 Strategic Report Governance Financial Statements Other information Strategic Report Governance Financial Statements Other information
OML 40
Warri
Bayelsa
Imo
Onitsha
Port Harcourt
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 knowledge and understanding of 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.
0 10 20 30 km
* Source: Netherland, Sewell & Associates Inc. June 2015.
**  Source: Independent Report by AGR TRACS April 2016.
***  Source: Netherland, Sewell & Associates Inc. April 2016 
and April 2017.
OUR ASSETS
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 
can be exported by two routes: (i) via the Shell-
operated Trans Escravos Pipeline network running 
from the Opuama field south along the coastline 
to the Forcados Oil Terminal, (ii) via shipping to an 
offshore FPSO.
Production was suspended in February 2016 due to 
sabotage by militants. Following the installation of 
offshore storage facilities, production resumed in 
January 2017.
The OML 40 licence area holds gross 1P reserves 
of 32.9 mmbbls, gross 2P reserves of 83.2 mmbbls, 
gross 2C contingent resources of 41.2 mmbbls and 
a best estimate of 254.5 mmbbls of gross unrisked 
prospective resources.*
A Competent Persons Report (CPR) on Opuama-1, 
Opuama-3, Opuama-7 and Gbetiokun-1 in early 
2017 resulted in a trebling of 2P reserves from these 
wells from 11 mmbbls to 33 mmbbls***.
Ubima Field
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.
 Updated CPR for Ubima published April 2016.
 Gross 2P reserve estimate of 2.4 mmbbl of oil**
 Gross 2C resource estimates of 31.1 mmbbl of oil.** 
  Significant upside gross 3C resource estimate of  
66.0 mmbbl of oil**
 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.
Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
8 OML 40
Warri
Bayelsa
Imo
Onitsha
Port Harcourt
Ubima
Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
9
2012
7.0
2012
27.2
2013
45.4
2013
119.4
2014
75.2
2015
72.3*
2016
72.3*
2014
254.5
2015
254.5
2016
254.5
Unrisked Gross Prospective Oil Resources mmbbl
*  2.4 mmbbl in Ubima field moved from Contingent Resources to Proved Plus 
Probable Reserves
OFFICE LOCATIONS
 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  
our London office in early 2013.
 Lagos, Nigeria
Our operational management team 
is based in Lagos. From there we 
manage our operations and work 
closely with our partners in OML 
40, NPDC and Starcrest as well 
as our Ubima partner, All Grace 
Energy Ltd.
FACTS
Gross Contingent Resources mmbbl (OML 40 plus Ubima) Strategic Report Governance Financial Statements Other information
A YEAR OF CHALLENGES  
AND DEVELOPMENT
Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
10
Excellent production rates in OML 40 have been accompanied by the 
development of alternative export routes providing diversification for 
crude oil evacuation, offset by the prolonged shutdown of Forcados.
2016 was a year of challenges 
and development for Eland, both 
with the Opuama oilfield and 
with infrastructure. Whilst the 
Forcados oil terminal was shut 
down in February due to attacks by 
militants, the company continued 
with its workover activities on 
Opuama, recording its best ever 
flow test from a single well. 
Production started off strongly in 
2016, maintaining the strong end to 
the previous year, with the Opuama 
field in OML 40 running at gross 
rates in excess of 4,400 bopd gross. 
During the period, total liftings 
were 38,200 barrels of oil. In April 
2016 Eland undertook a workover 
on Opuama-3, which proved even 
more successful than the Opuama-1 
re-entry, which was completed in 
2015. The Opuama-3 well tested at 
extrapolated rates of 10,548 bopd 
from two new zones, the D1000 
Upper and D2000 reservoirs. 
The workover also removed over 
1,000 barrels of water production 
from the well, significantly reducing 
the well’s water cut. The Opuama-3 
rigless re-entry and associated 
production cost less than $2.0 
million (gross) to complete.
Elcrest Exploration and Production 
Nigeria Ltd, Eland’s joint venture 
company, completed a crude oil 
sale of 45,000 barrels from the 
Forcados terminal in October. In 
addition to the production from 
the recent Opuama-3 well test of 
33,900 barrels gross of oil, the 
6,000 barrels gross of stored crude 
from the Opuama-3 production test 
in April 2016 has also been injected 
into the OML 40 export line for 
future liftings.
The Opuama-7 sidetrack planned 
for early H2 2017 is expected 
to flow at initial rates of around 
6,000 bopd gross. The workover 
on Gbetiokun-1 is planned for H2-
2017 subject to stable production 
and capital availability, and is 
expected to produce at around 
7,800 bopd gross.  * Source: Energy Information Administration.
11
■  NIGERIA  
37.1 billion bbls
■  SUDAN  
1.5 billion bbls
■  SOUTH SUDAN  
3.5 billion bbls
■  CHAD  
1.5 billion bbls
■  EQUATORIAL 
GUINEA  
1.1 billion bbls
■  GABON  
2.0 billion bbls
■  CONGO 
BRAZZAVILLE  
1.6 billion bbls
■  ANGOLA  
12.7 billion bbls
Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
PRODUCTION (2015)
2.4
mmbbl
RESERVES (end 2015) 
37.1
billion bbls
NIGERIA IS AFRICA’S 
LARGEST OIL 
PRODUCER AND ONE 
OF THE LARGEST IN 
THE WORLD.
MARKET OVERVIEW
●  Nigeria became a member of the Organisation 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*.
●  According to the BP Statistical Review of World 
Energy 2016, Nigeria has an estimated 37.1 billion 
barrels of proved crude oil reserves as of  
January 2016.
●  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.
Source: BP Statistical Review of World Energy 2016.  
Benin River
N
OMURO-1
KOKO
TOWN
Oil Field
Shallow
Intermediate
Deep
Gas Field
OML 40 (498  sq.km)
Area of Eastern 3D seismic (1994-95)
Area with no 
3D seismic data is
136 sq.km.
OJUMOLE-1
POLOBO-1
TSEKELEWU-1
GWATTO-1
GWAT-2
AGAGBASSA-1
AMAKUBU-1
UGBO-1
ABIALA-1
TONGARAFA-1
Obagnoro N
Obagnoro
OPUAMA FIELD
Amobe
Polobo N
POLOBO
Polobo SE
Adagbassa-Updip
Ebrohimi
Amakubo W
Ugbo
North
Ugbo
Old Nana 
Dudu
Town E
Gbeokun W
GBETIOKUN FIELD
Tongarafa
SE
Abiala South
Abiala North
Tongarafa
N
Abiala
NE
OML 40 
Prospects and Leads
Depth of
reservoir interval Dominant 
hydrocarbon type
Fields and Discoveries
Field
Discovery
Prospect
Lead
Gulf of Guinea
Tebu
Seismic data
Area covered by 3D seismic data Oil Well Gas Well Well - no data Dry Hole
Wells (predominant result)
Area of Western 3D seismic (1990-91)
Polobo NE
Gbeokun Deep
0     4 km
oil pipeline
Strategic Report Governance Financial Statements Other information
Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
12
STRATEGY IN ACTION
OML 40 IS ELAND’S CORE ASSET WITH OPUAMA PRODUCING  
AT RECORD LEVELS AND ADDITIONAL NEAR TERM PRODUCTION  
EXPECTED FROM OPUAMA-7 SIDETRACK AND GBETIOKUN-1.
OUR STRATEGY FOR GROWTH
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  
Benin River
N
OMURO-1
KOKO
TOWN
Oil Field
Shallow
Intermediate
Deep
Gas Field
OML 40 (498  sq.km)
Area of Eastern 3D seismic (1994-95)
Area with no 
3D seismic data is
136 sq.km.
OJUMOLE-1
POLOBO-1
TSEKELEWU-1
GWATTO-1
GWAT-2
AGAGBASSA-1
AMAKUBU-1
UGBO-1
ABIALA-1
TONGARAFA-1
Obagnoro N
Obagnoro
OPUAMA FIELD
Amobe
Polobo N
POLOBO
Polobo SE
Adagbassa-Updip
Ebrohimi
Amakubo W
Ugbo
North
Ugbo
Old Nana 
Dudu
Town E
Gbeokun W
GBETIOKUN FIELD
Tongarafa
SE
Abiala South
Abiala North
Tongarafa
N
Abiala
NE
OML 40 
Prospects and Leads
Depth of
reservoir interval Dominant 
hydrocarbon type
Fields and Discoveries
Field
Discovery
Prospect
Lead
Gulf of Guinea
Tebu
Seismic data
Area covered by 3D seismic data Oil Well Gas Well Well - no data Dry Hole
Wells (predominant result)
Area of Western 3D seismic (1990-91)
Polobo NE
Gbeokun Deep
0     4 km
oil pipeline
Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
13
OML 40 RESERVES*
Gross Oil Reserves (mmbbl)
Proved Reserves (1P)
Proved + Probable Reserves (2P)
Proved + Probable + Possible (3P)
32.9
83.2
106.5
A Portfolio in a Licence
The OML 40 licence has been producing light oil with 
a low GOR for over two years since production was 
re-started. The field has a very strong aquifer drive 
which contributes to high recovery factors which could 
ultimately lead to increases in recoverable reserves.
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 wells. Sustained 
production commenced in the autumn of 2014.
Two successful well interventions were completed in 
2015 (Opuama-1) and 2016 (Opuama-3) which materially 
increased production while preparing for the OML 40 
drilling campaign.
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 2015.
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
●   Licence area of 498 km
2
, 
located in the Niger Delta, 
approximately 75 km  
north-west of Warri.
●  Gross 2P oil reserves of  
83.2 mmbbl (net 
22.5 mmbbl) are found 
in the Opuama and 
Gbetiokun fields.*
●  Primary gross contingent 
resources amount to  
41.2 mmbbl. Polobo and  
Abiala together total  
33.4 mmbbl (gross).*
●  Eland is entitled to 100% 
of production cashflow 
from Elcrest until costs 
have been recovered.
●  Crude from Opuama is 
transported via either 
a dedicated export line 
injected into the Trans 
Escravos pipeline network 
to the Forcados terminal  
or via shipping to an  
offshore FPSO.
HIGHLIGHTS Strategic Report Governance Financial Statements Other information
Benin River
200m
Gbetiokun-2
Gbetiokun-1
G
Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
14
STRATEGY IN ACTION
OML 40 RESERVES*
OPUAMA
Overview
The Opuama field was discovered in 
1972 and a total of 10 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. 
Highlights
●  The two production wells on the 
Opuama field are Opuama-1 and 
Opuama-3.
●  Initial production of around 
10,500 bopd gross was 
achieved before stabilising at 
8,500 bopd following a workover 
on Opuama-3 in April 2016. This 
contributed to materially higher 
rates from the Opuama field 
when production recommenced 
via shipping in January 2017. 
●  An additionaLworkover is planned 
on Opuama-7 which is expected 
to add a further 6,000 bopd gross 
to field production.
●  Four new infill wells are planned, 
including deviated wells with dual 
completion and horizontal wells 
with single completion. The wells 
are expected to deliver high flow- 
rates and high oil recoveries.
●  Each new infill well is expected  
to produce 4,500 to 5,500  
bopd gross.
●  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.
*  A summary of the full field development 
plan which is subject to substantial capital 
investment.
GBETIOKUN
Overview
The Gbetiokun field was discovered 
in 1987 and is located 63 km 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. A total of 20 hydrocarbon 
reservoirs have been identified in the 
Gbetiokun field with the majority of 
the OOIP estimated to be in eight 
reservoirs.
Workover operations are planned 
for Gbetiokun 1 in the current Field 
Development Plan (FDP), with 
Gbetiokun-1. Seven additional wells are 
also planned for the development of 
the Gbetiokun field.
Highlights
●  Detailed geological studies, 
supplemented with development 
studies were used for the Field 
Development Plan (FDP). 
●  The field is planned to be 
produced initially through  
an early production facility. 
Oil export would be by shuttle 
tanker via the Benin River to the 
Adagbassa Manifold on the Opuama 
to Forcados system. 
●  A CPR by NSAI was published  
for Gbetiokun-1 in April 2016,  
with gross 2P reserves of 10.8 
mmbbls, net to Eland of 3.9 mmbbls 
(after royalties). Initial flow-rates of 
7,800 bopd gross are expected.
●  Eland has carried out a complete 
re-evaluation of the field and 
has constructed a numerical 
geological model which includes 
all the reservoirs. Two of the 
reservoirs, E2000 and E6000, will 
be completed and produced in 
Gbetiokun-1 during the EPS.
●  Given that NSAI has significantly 
increased its estimate of STOIIP in 
the E2000 and E6000 reservoirs 
in its March 2016 Report, Eland 
expects its estimate of full field 
STOIIP and Reserves to also 
increase when NSAI updates its 
assessment of Gbetiokun as a 
whole later this year. Eland expects 
its estimate of full field STOIIP and 
Reserves to also increase when 
NSAI updates its assessment of 
Gbetiokun as a whole later this year.
OPUAMA
Gross Oil Reserves (mmbbl)*
GBETIOKUN
Gross Oil Reserves (mmbbl)*
Proved Reserves (1P)
Proved Reserves (1P)
Proved + Probable  
Reserves (2P)
Proved + Probable  
Reserves (2P)
Proved + Probable +  
Possible (3P)
Proved + Probable +  
Possible (3P)
28.2
4.7
57.4
25.8
74.3
32.2
*  Source: Netherland, Sewell & Associates Inc. 
June 2015. Benin River
200m
Gbetiokun-2
Gbetiokun-1
G
Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
15
Discovered: 1972
Gross 2P reserves: 57.4 mmbbl* 
Location: 92 km NW of Warri 
Reservoir Depth: 7,600 – 8,900ft
Opuama Gross 2P Oil Reserves
57.4
*
mmbbl
Discovered: 1987
Gross 2P reserves: 25.8 mmbbl* 
Location: 63 km NW of Warri 
Reservoir Depth: 4,500 – 10,000ft
Gbetiokun Gross 2P Oil Reserves
25.8
*
mmbbl
NEW DREDGING 7-8ft dredging
required
for barge
7-8ft dredging required for HWU
FLOW LINES
STORAGE/
OFF-TAKE
VESSEL
WHARF
BARGING
PRODUCTION
BARGE
EXIST.
SLOT
PROPOSED GBETIOKUN 
PRODUCTION FACILITIES
OPUAMA  
HIGHLIGHTS
GBETIOKUN  
HIGHLIGHTS Strategic Report Governance Financial Statements Other information
In the interests of enhanced security and 
delivery to market and to overcome issues 
such as the shut-down at Forcados, in 2016 
Eland commenced the development of an 
alternative export route, supplementary to 
the existing Forcados terminal.
In February 2016, the Forcados terminal was shut-in following an attack 
by militants, necessitating alternate export routes for OML 40 crude. 
In H2 2016, Eland and its partners commenced the development of a 
diversified route whereby oil from the Opuama field is transported from 
the wellhead to an 80,000 barrel capacity storage tanker and then onto 
one of two shuttle tankers, each of which hold 40,000 barrels of oil. 
These then undertake continuous 4-day round trips to a 300,000 barrel 
floating, production, storage and offloading (FPSO) facility, from where 
the crude is offloaded and sold. 
Shuttle tanker efficiencies exceeded our expectations. Overall, the 
system has had some difficulties relating to the capability within the 
offshore storage and production facility, and the downtime associated 
with the discharge of the crude oil and resulted in a receivable of  
$8 million pending ultimate discharge from the FPSO. 
The Gbetiokun-1 well location near the Benin River Production allows for 
anticipated new production to be exported down the river to a new tie-in 
point to be injected into the export pipeline system. Notably, Eland and 
the licence partners also plan to develop an additional export route by 
way of shuttle tankers and storage facilities to a supplementary export 
facility as well as a pipeline extension from Otumara to the Escravos 
Terminal. The diversification of oil export from OML 40 to both Forcados 
and Escravos terminals will enhance the resilience of the Company 
should any one of the two export routes be unavailable in the future.
STRATEGY IN ACTION
DIVERSIFYING EXPORT OPTIONS
Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
16
OPUAMA WELLHEAD
PRODUCTION OFFLOADED FOR 
TRANSPORT TO MARKET
SHIPPING PRODUCTION TO MARKET
FPSO 
CAPACITY : 300,000 BBL
CONTINUOUS SHUTTLE LOOP TO FPSO
STORAGE TANKER 
CAPACITY : 80,000 BBLS ●  Increased capacity to 
accommodate higher 
cumulative production 
volumes
●  Demons tr a t ed e xport 
route
● Risk diversification 
●  Impr o v ed c onsis t enc y  
of delivery to market
500k+ 
barrels produced
20k 
 bopd capacity  
when optimised
KEY BENEFITS
Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
17
2 SHUTTLE TANKERS 
CAPACITY EA: 40,000 BBLS Strategic Report Governance Financial Statements
Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
18
STRATEGY IN ACTION
OPUAMA-3 WORKOVER
The Opuama-3 workover well 
provided the strongest evidence 
to date of the exceptional 
deliverability of the OML 40 licence. 
2.  Perforated 28 feet 
of D1000 Upper 
in LS (orientated 
perforating).
1.  Punched hole 
in LS and 
spotted cement 
across D5000 
perforations, 
shutting off water
3.  Perforated 20 feet 
interval in D2000 
in SS orientated 
perforating
BACKGROUND
Opuama-3 was originally drilled 
in 1975 and encountered seven 
reservoirs. The well was completed 
using two production strings, in the 
E2000 and the D5000 reservoirs. 
The well was re-entered in 1995 
after the E2000 had watered-out. 
The D1000 Lower reservoir was 
then brought on stream. In addition, 
a shallower part of the D5000 
reservoir was perforated, as the 
deeper part of the D5000 sands 
had largely watered out. Production 
continued with this completion 
arrangement until 2016.
ELCREST WORKOVER RATIONALE
By Q1 2016 the D5000 had largely 
watered out, and was producing 
only 200 barrels of oil per day 
(bopd gross) but 1,150 or more 
barrels of water per day (bwpd). 
In contrast, the D1000 Lower sand 
was still producing about 1,050 
bopd gross and 530, or less, bwpd. 
The D2000 and D1000 Upper 
reservoirs had not been produced.
The well was re-entered in early 
Q2 2016, with the objectives of 
a) ensuring the deep E2000 
reservoir was properly isolated; 
b) shutting off water production 
from the D5000 reservoir; c) and 
establishing production from the 
D2000 reservoir and D1000 Upper 
reservoir. This was to be achieved 
at low cost by avoiding the use of a 
drilling rig and instead carrying out 
the operations using wireline and 
coiled tubing. Orientated perforating 
was to be used to allow the D2000 
and D1000 Upper intervals to be 
perforated without damaging the 
other production string.
EXCEPTIONAL RESULT
Eland worked closely with its 
contractors in designing and 
carrying out the work, the results 
of which were a great success. 
The D5000 reservoir was isolated 
by punching a hole in the LS and 
setting a cement plug across the 
D5000 perforations. A twenty feet 
interval in the D2000 reservoir 
was then perforated in the SS 
and a twenty eight feet interval in 
D1000 Upper in the LS. On test, the 
well produced over 10,000 bopd 
gross of dry oil. The operation 
has stabilised at 8,500 bopd and 
reduced water production by about 
1,500 bwp at a cost of $2 million.
Other information Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
19
STRATEGY IN ACTION
OPUAMA-7 PLANNED WORKOVER 
Following the success of the Opuama-3 workover, it is now intended 
to drill a sidetrack on Opuama-7 in H2 2017, further enhancing the 
near-term production from the field at minimal cost (subject to 
capital availability). 
BACKGROUND
Opuama-7 was drilled in 1980, encountering oil in four 
reservoirs, and was initially completed in the D2000 reservoir.  
It was shut-in in 1990 due to low production levels. 
PLANNED SIDETRACK
Eland had originally planned to re-enter Opuama-7 and drill 
a horizontal sidetrack in the D2000 reservoir at the end of 
the planned Opuama, seven well, infill drilling programme. 
However the success of the Opuama-3 workover in 2016 
demonstrated high flow-rates from vertical wells in D1000 and 
D2000. Interpretation of seismic data indicates that the D1000 
reservoir is present a short distance from the existing Opuama-7 
well location. Hence Opuama-7 is planned as a near-vertical 
sidetrack penetrating a full un-faulted D1000 and D2000 
sequence, with expected initial flow-rates of 6,000 bopd gross. 
LOW COST DEVELOPMENT
Opuama-7 and Opuama-3 should eliminate the need for  
two of four originally planned infill wells targeting the  
D1000 and D2000 thereby increasing economics of the full  
field development.  Strategic Report Governance Financial Statements Other information
The Ubima Field licence area covers 65 km
2
. It has been carved out of 
OML 17 which is operated by Shell Petroleum Development Company. 
Eland plans to workover Ubima-1 and initiate an Early Production 
System in late 2017 (subject to capital availability).
STRATEGY IN ACTION
UBIMA
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 payment 
of $3 million payable following 
production of 2,000 bopd gross 
over a thirty day period.
●  Eland is the Technical and 
Financial Partner on the field 
development and production 
operations.
●  Eland is entitled to 88% of 
production cash flow from 
Ubima field until costs have 
been recovered.
Ubima Opportunity
●  2C resources of 31.1 mmbbl 
gross*, with net resources of  
13.1 mmbbls to Eland
●  A CPR published in April 2016 
assumes an early production 
system (EPS) on Ubima with 
gross 2P reserves of 2.4 mmbbls, 
net to Eland of 1.1 mmbbls.
●  Well appraised field with four 
wells drilled: Ubima 1, 2, 3 & 4.
●  Licence fully covered by 3D 
seismic which was acquired 
in 1997 over target reservoirs, 
covering 64% of the total area.
●  Excellent infrastructure with 
nearby roads, airport and oil and 
gas pipelines. Low entry cost for 
land based operations using  
conventional technology.
Ubima Development Plan
●  Eland has proposed a phased 
development approach with 
plans to do; 
 –   Ubima 1 Re-entry: Planned 
dual string completion and an 
early production system (EPS) 
to be installed at the Ubima 1 
well site. Evacuation will be 
via trucking. 
 –   Full Field Development: The 
results of the EPS will be used 
to optimise this development; 
four wells are planned to 
develop the main reservoirs.* 
●  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.
*  Source: Independent Report by AGR TRACS  
April 2016.
20 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016 Discovered: 1964
Gross 2P contingent resources: 31.1 mmbbl* 
Location: 14 km North of Port Harcourt 
UBIMA CONTINGENT GROSS RESOURCES* (mmbbl)
low estimate (1C)
best estimate (2C)
high estimate (3C)
20.6
31.1
66.0
Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
21
* Independent Report by AGR TRACS April 2016.
UBIMA 
HIGHLIGHTS
40
%
interest acquired  
August 2014 
88
%
initial production cash  
flow entitlement 
13.1
mmbbl net contingent 
resource to Eland
OBELE
OGBODO
ISU
OTAMINI
UMUECHEM
OLO
MINI NTA
OGBELLE
EGBOLOM
IMO RIVER
NKALI
AGBADA
OBIGNO NORTH
OBIGBO 
UKPICHI
AMAPU
AHIA
EREMA
EREMA EAST 1
RUMUEKPE
AKPOR
APARA
Izomini 1
Nroo 1
Obuor 1
Amadioha 1
Onyika 1
Alaoma 2
Alaoma 1
Owu 1
Ikwegbu 1
Apani 1
Alubi 1
Ogwugwu 1
4
3
Elele 1
2
Umuanwa 1
Walima 1
Ola 2
Ola 1
Odagwa 1
Nkali 3
Isoba 1
Emohua 1
Odegu 1
Ndele 1
Ogbakiri 1
Tema 1
Tema 2
Isia 1
Ebubu 10
Tai 3
Bangham 2
1
Evo 1
23
Nzuaku 1
7
Umuechem 6,23 46
17
OML 17
OML 11
OML 53
OML 23
OPL 2006
NIGERIA
Olo 3
Olo 2
Ihugbogo 1
Achira 1
Erema East 1
Erema West 1
7 13
3
1
2 ST 2
Alimini 1
OML 22
OML
58
OPL 234
OML
21
OML
16
UBIMA FIELD
PORT HARCOURT
2
1
Omerelu 1
Ahia
Flow-station
0 10 Kms Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
22
Strategic Report Governance Financial Statements Other information
Eland completed a successful 
equity placing in April 2016 raising 
$18.5 million despite a challenging 
environment, supported by the 
successful workover of OP3. 
The Company then restarted 
production and cash flow via 
shipping operations in early 2017.
FINANCIAL REVIEW
Review of 2016
2016 was a challenging year for Eland due to the 
sabotage and prolonged outage of the Forcados 
terminal. Against a challenging environment Eland was 
nonetheless able to raise $18.5 million (gross) in April 
2016 which, combined with a substantial reduction in 
cash operating expenditure, enabled Eland to end the 
year with a cash balance of over $11 million (including 
$4.0 million in restricted cash) and no additional 
debt drawn in the period. As a result of the Forcados 
interruption, revenue for the year was significantly 
lower at $2.4 million (down from $18.1 million) which 
reflected a partial year of production with only two 
liftings completed.
Operating expenses of $25.5 million (2015: $18.0 
million) were impacted by a liability for $17.25 million 
(2015 release of $2.25 million). Subsequent to year end, 
Elcrest received a fee invoice for such liability from 
its local shareholder. This fee related to management 
charges agreed at the onset of the joint venture of 
$3m per annum for each shareholder, which by the 
end of 2016 totalled $17.25 million per shareholder. 
In prior periods Eland had understood that Elcrest’s 
local shareholder would not exercise its ability to levy 
these charges. Eland has now also formally invoiced 
the corresponding amounts. The payment profile for 
settlement of these liabilities is yet to be agreed, but it 
is intended this will be settled from free cash generated 
from increasing OML 40 production. 
Excluding the above, operating expenses were 
$8.2 million (down from $20.2 million) reflecting 
reduced operations and benefiting from FX gains on 
NGN depreciation. While operating expenses incurred 
are mostly fixed, it is important to note however that 
as the Company produces at higher rates following 
the successful workover of well Opuama-3, operating 
expenses per barrel reduce significantly.
Administrative expenses of $5.8 million declined by a 
further 9% compared with $6.4 million in the previous 
year, reflecting a continued effort to target corporate 
savings as well as covering indirect operating expenses 
as the Company continues to operate key projects for 
the JV with its local partner.
The adjusted loss before interest, tax and DD&A was 
$8.8 million compared to $2.5 million in the previous year, 
after adjusting for the amounts set out above. Finance 
costs amounted to $2.5 million (down from $3.3 million) 
reflecting the costs of carry of the reserves based loan 
(“RBL”) from Standard Chartered Bank (“SCB”). Overall, 
this resulted for the Group in a loss of $30.4 million for 
the year before exclusion of non-controlling interest.
The Group’s consolidated balance sheet shows net 
assets of $155.7 million ($168.0 million). Within this total, 
non-current assets represented $206.4 million ($198.2 
million), current assets were $13.1 million ($13.8 million), 
current liabilities $40.4 million ($20.8 million) and 
non-current liabilities $23.4 million ($23.2 million). 
Hence, net current liabilities stood at $27.3 million 
($7.0 million). 
Although the Group has a significant net current 
liability position this includes the aforementioned  
$17.25 million Elcrest charge towards which Elcrest have 
paid $1 million, with the remainder to be discharged as 
free cash is generated through increasing production 
in OML40, and $10.4 million of accrual balances due to 
our OML 40 partner, NPDC, which the Group plans to 
settle by carrying NPDC’s share of capital expenditures 
as we deliver the work programme. Eland has 
reported such liabilities to its lender and how it plans 
to take them into consideration when determining its 
covenants, as per the procedures set out in the facility. 
To date, the Group has reported compliance with 
covenants to the lender.
The Group began the year with consolidated cash 
and cash equivalents of $8.4 million and finished the 
year with $11.1 million, without any further amounts 
drawn under the RBL facility. In May 2016 the Company 
completed a placing of $18.5 million gross with existing 
and new investors. The placing was done at a premium 
to the prevailing share price and was over-subscribed. 
Olivier Serra
Chief Financial Officer Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
23
Key Strengths
●    Technical and operational 
capability to increase production 
significantly through lower capex 
workovers. 
●     Extensive reserves and resources 
which will produce further 
capacity to fund the future 
development of the Group’s 
assets.
●    Strong banking and offtake 
relationships.
●     Supportiv e shar eholder base .
Key Financial Highlights
●    Cash and cash equivalent balance 
of $11.1 million at 31 December 
2016. Current cash of $6 million.
●    The Borrowing Base Amount 
under the Reserve Based Lending 
facility with Standard Chartered 
Bank had been confirmed at 
$23.9 million as at 31 December 
2016 and release of restricted cash 
of $3.5 million.
●    During 2016 Eland continued its 
cost reduction programme in 
response to lower oil prices and 
production, leading to reduction 
in operating and administrative 
expenses.
●    In 2016, the Group recorded only 
two liftings due to sabotage of 
SPDC-operated export pipeline 
at the Forcados terminal but 
returned to production in January 
2017 with active working capital 
management.
●    The consolidated loss  
before tax for the year was  
$30.4 million largely impacted 
by recognition of Elcrest’s 
shareholder management  
fee accrual.
The cash was invested during the period as $7.5 million in operating 
activities and $6.9 million on enhancing the Group’s assets through 
development and evaluation expenditure.
In addition, to support working capital during the prolonged interruption 
at the Forcados Terminal, in May 2016 the Company also made forward 
sales to its offtake partner, Shell Western Supply and Trading Limited, of 
a further $3 million. 
The RBL, on which SCB has committed an initial $35.0 million, has a 
maturity of four and a half years from 31 December 2014. The amount 
available to Eland under the RBL is subject to a cap determined by six-
monthly reviews and calculated on OML 40 production. The borrowing 
base amount at the end of 2016 was $25m, but $3.5m was required 
to be held in reserve by the lenders until the return to production. The 
facility underwent a redetermination in early 2017, with the borrowing 
base amount confirmed at $23.9m, and the $3.5m reserve requirement 
released. Drawdowns to date amount to $15.0 million and, as such, 
headroom under the facility is reducing over time in accordance with the 
terms of the RBL. The next redetermination is due in September for the 
period ending as at end of June 2017.
2017 financial developments
The Company entered into alternative export arrangements to the 
Forcados export pipeline and terminal by chartering shuttle tankers 
and entering into handling agreements with an FPSO, which allowed to 
restore production and sales in January 2017. Shipping operations were 
funded from cash on hand and working capital management and will be 
completed upon collection of the $8 million receivable balance as noted 
in the CEO’s report.
The Company continues to actively manage its working capital, 
including shipping receivables and vendor payment. It has plans to 
settle the overlift position resulting from shipping operations (in which 
Elcrest’s JV partner did not participate) and the Shell prepayment 
by offsetting amounts due from sale revenues to be collected from 
Forcados over the next few months. 
Going concern
As set forth in the Going Concern note on page 32, there remains risks 
to mitigate and material uncertainties which could affect the ability of 
the Company to manage its working capital position or remain compliant 
with its loan covenants, such as stability of oil prices, sustained access to 
export routes and collection/settlement of receivables/payables.
Outlook
The Company held its first Capital Markets Day on 27 April 2017 and 
reported on operational progress, technical development, CPR update, 
with particular focus on the near term work program and financial 
development, as well as the value of its assets. The Company pointed 
out that it expects that increased production levels will allow it to gain 
access to further debt financing and support the 2017 work programme 
designed to materially increase production and cash flow.
In May 2017, the Forcados export terminal was re-opened and production 
has been restored back through the Forcados export line, at 11,500 bopd. 
Whilst the transition back to Forcados will require careful working capital 
management, it offers the potential for immediately higher production 
levels at improved margin and netbacks. Notwithstanding the near 
term challenges it is against this backdrop that we anticipate further 
investment and increasing cashflows as 2017 progresses. 
Olivier Serra 
Chief Financial Officer
6 June 2017 Strategic Report Governance Financial Statements Other information
Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
24
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.
The Group has 
outlined below  
the Key Performance 
Indicators which are 
used to provide an 
understanding of  
the development  
and performance of 
the business.
Since its flotation on the London 
Stock Exchange in late 2012, the 
Group has been tracking the 
growth of its reserves and resources 
base for OML 40 via independent 
third party consultants. We 
continued to re-evaluate this data 
through detailed study, seismic 
re-processing and drilling and 
workover operations during 2016. 
We also include reserves and 
resources estimates for the Ubima 
field, which has 1P, 2P and 3P 
classified reserves. 
These indicators highlight the 
increase in the gross reserves and 
resources in both OML 40 and the 
Ubima field. 
The key financial metrics for the 
business include comparison for 
Production/Liftings, Revenue 
and adjusted EBITDA. The tables 
alongside show the comparison 
between 2015 and 2016 Actual 
Performance.
OUR VALUES
RESERVES AND RESOURCES
OML 40
LIFTINGS
ADJUSTED EBITDA*
FINANCIAL REVENUE
UBIMA
2016
(8.8)
2016 2016
83,200 2.4
2015 2015
32.9 106.6
2016 2016
32.9 106.6
2015 2015
83.2 41.2
2016 2016
83.2 41.2
2015
(2.5)
2015 2015
 340,809 18.1
2015 2015
31.1 2.4
2016 2016
31.1 2.4
Gross 1P Oil Reserves (mmbbl)
(mmbbl)
 ($US million)
 ($US million)
Gross 1P Oil Reserves (mmbbl)
Gross 2P Oil Reserves (mmbbl)
Gross 2P Oil Reserves (mmbbl)
Gross 3P Oil Reserves (mmbbl)
Gross 3P Oil Reserves (mmbbl)
Gross 2C Oil Resource (mmbbl)
Gross 2C Oil Resource (mmbbl)
2015 2015 3.3 0.8
2016 2016 3.3 0.8
*  Adjusted loss before interest, tax and DD&A 
after adjusting for release of provisions  
(see Financial Statements, Note 5)
KEY PERFORMANCE INDICATORS Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
25
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.
CORPORATE SOCIAL RESPONSIBILITY
Elcrest Exploration & Production Nigeria Limited, in partnership with both NPDC is successfully 
carrying out the following projects to the host communities (Opuama and Tsekelewu) in line 
with the Corporate Social Responsibilities (CSR) policy of the joint venture in OML 40.
Tsekelewu
Tsekelewu has also been provided 
with portable water, overhead steel 
storage tank and water treatment 
plant to service the community.
There has been the successful 
assembly of a Civic Centre for the 
area, as well as the completion of a 
walkway for this area.
Opuama
Within the Opuama community 
there has been the successful 
provision of portable water via 
the drilling of a borehole and the 
construction of an overhead steel 
storage tank and water treatment 
plant. There has been further 
work within the area with the 
construction of a Cottage Hospital 
and the completion of a permanent 
jetty for the residents. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
26
Strategic Report Governance Financial Statements Other information
PRINCIPAL RISKS AND UNCERTAINTIES
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 
judgements and estimates which are set out in note 3 to the Financial Statements.
Principal Risk Detail Mitigation
Geo-political risk Nigeria continues to face political and security issues, legal 
uncertainties and threats such as terrorism aimed at de-
stabilising and undermining the orderly operations of producers 
and the effective rule of central government.
The Group closely monitors these issues and threats to minimise 
the impact upon our operations as much as possible. We monitor 
the situation from the perspective of safety and security, with 
contingency plans in place and tested regularly. Through our 
contacts in governments and industry, as well as through specialist 
advisors, we continuously monitor and evaluate the potential 
impacts on our business arising from changes in the geo-political 
environment.
Production 
Operations
Production operations involve risks common to the industry, 
including oil spills, shipping, pipeline or terminal disruption 
such as the recent shut-down of Forcados, 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 such as forward sales or alternative evacuation 
routes could be put in place to allow oil production and revenue 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. At 
the date of this report given the current liquidity position it is 
likely the Group will seek additional funding in order to meet its 
planned work programme.
The Group plans to access sufficient cash resources and debt to 
commence the workovers of OML 40. Full syndication and increase 
of the borrowing base as 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. Given the 
fall in oil prices, the group has identified and pursued lower capex 
developments to increase production which do not require higher 
levels of debt or other financing. 
Under or over 
accrual of 
amounts due to 
the JV partner
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. At the date of this 
report balances are in dispute with NPDC dating back to 2014, 
with little cash settlement having occurred in 2016.
Management continually monitor the amounts being incurred or 
proposed by the JV partner to be incurred on OML 40. 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 year end, therefore, reflect 
management’s best estimate of amounts that have been incurred in 
accordance with the JOA and that will ultimately be paid to settle its 
liabilities in this regard.
Eland and 
Elcrest’s 
relationship 
with Elcrest’s 
indigenous 
shareholder
The Company is working with a third-party indigenous 
shareholder in the operation of Elcrest which in turn enables 
Elcrest to be treated as an indigenous company under Nigerian 
law. Any misalignment of strategy or common objectives has 
the ability to cause delays which are inherent in multi-party 
relationships. Recently, the shareholder has looked to exercise its 
rights to amounts owed to it by Elcrest covered in more detail in 
the Post Balance Sheet Events note of this report.
The Elcrest Shareholders’ Agreement provides for default and 
deadlock situations where Eland may buy the shareholder’s interest 
in Elcrest or vice versa. In the event that Eland were to acquire the 
interest of the shareholder, Eland wold still intend to maintain the 
status of Elcrest as an indigenous Company by ensuring any sale 
of shares was to another indigenous company. Further, as Eland 
has funded Elcrest through a formal Loan agreement agreed by 
both shareholders this substantially provides the rewards to Eland 
until such time as this funding has been fully repaid. This therefore 
limits the rewards which can be returned to the shareholder, at least 
until the OML 40 work programme developing the Opuama and 
Gbetiokiun fields has been executed.
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, storage and lifting 
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. The licence for Ubima is life of field.  Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
27
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.
A full programme of compliance and training for the UK Bribery Act 
and the US FCPA has been implemented by the group.
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.
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.
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
Olivier Serra 
Chief Financial Officer
6 June 2017 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
28
Strategic Report Governance Financial Statements Other information
BOARD OF DIRECTORS
Audit committee
Remuneration committee
Nomination committee 
Technical and Reserves committee
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.
George Maxwell
Chief Executive Officer
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 and moved to the role of Chairman in December 2015.
Russell Harvey
Chairman
Olivier has over 23 years of investment banking and corporate finance experience in 
Europe and overseas, during which time he has been responsible for a number of oil 
and gas fundraisings, mergers and acquisitions.
Olivier was previously an independent advisor to oil & gas companies with SPTEC. 
He also acted as CFO and Director of Sea Dragon Energy, a Canadian listed E&P 
company for 5 years. Prior to this role, he spent 18 years in investment banking, 
primarily focused on the energy industry. He was Head of the Oil and Gas reserves 
based lending and acquisition finance at BNP Paribas, where he supported the 
growth of Independent Oil Companies.
Olivier holds an MBA, finance major, from Columbia University. He was appointed as 
Chief Financial Officer in May 2016.
Olivier Serra
Chief Financial Officer Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
29
Henry has worked in financial services since 1996, with a focus on equity capital 
markets. Having spent the majority of his career advising growth companies within 
investment banking, he switched to investment management when he joined 
Henderson Global Investors in 2015. In 2017, the funds managed by Volantis were 
transferred by Henderson to Lombard Odier Investment Management. Henry was an 
original investor in Eland and prior to joining the board as a Non-Executive Director  
in January 2015 he had advised the Company from its seed funding to its listing on 
AIM in 2012.
Henry graduated with an MA (Hons) in Modern Languages from Edinburgh University 
and is a Member of the Securities Institute.
Henry is a representative of Lombard Odier, one of the Company’s largest 
shareholders.
Henry Turcan
Non-Executive Director
Henry Obi has over 15 years’ experience in private equity sector and is currently a 
Partner and Chief Operating Officer at Helios Investment Partners LLP (“Helios”) 
where he is responsible for its operations and serves on Helios’ Equity and Credit 
Investment Committees.  Prior to joining Helios in 2006, Henry was a Partner at 
Aureos Advisers Limited where he was responsible for monitoring the performance 
of the firm’s funds in Africa and Central America and their compliance with 
investment policy. Prior to Aureos, Henry worked for Actis, CDC Group Plc and 
Dynegy, a US energy trader.
Henry holds a BSc. Architecture and MSc. Architecture from University of Nigeria, 
a B.Arch. from University of Nottingham and an MBA in Finance from the London 
Business School. Henry was appointed to the Board as Non-Executive Director in  
July 2016 and is a representative of Helios, one of the Company’s largest shareholders.
Henry Obi
Non-Executive Director
Grégory has over 25 years of Investment Banking experience in the
natural resources and related sectors. He held senior positions with Bear Stearns and 
Morgan Stanley in London, Moscow and New York. More recently, he worked with 
CIS Capital and Renaissance Capital providing advisory services to small companies 
and institutions involved with oil, gas and power assets in geographies across Russia, 
Kazakhstan and Sub-Saharan Africa.
He is a member of the Advisory Board of the Graduate School of International and 
Public Affairs at Columbia University in NY and is active with the University’s Centre 
for Global Energy Policy. He has a BA and a MA from Columbia University.
Grégory was appointed to the Board as Non-executive Director in January 2016.
Grégory Stoupnitzky
Senior Independent Director Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
30
Strategic Report Governance Financial Statements Other information
SENIOR MANAGEMENT
Pieter van der Groen
Chief Operating Officer
 
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.
Pieter then moved to Amerada Hess initially as a 
Petrophysicist in the international team, then to technical 
and management roles.
Pieter worked briefly with Gulfsands Petroleum in Syria as 
Deputy General Manager.
In Nigeria he spent 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 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.
Adebayo Ayorinde
Managing Director, Nigeria
 
Adebayo has over 30 year’s diversified experience in the 
upstream oil and gas industry from oil and gas field
development, Administration and Business development.
Adebayo started his career with Ashland and rose to the 
level of onshore Production Manager before leaving for 
texaco overseas where he served as Head of HR in Warri.
Afterwards, he worked for Moni Pulo ltd and allied energy 
as Executive Director and COO before joining Afren in 
2009. He was the Managing Director at Afren from 2011 
before joining Oriental Energy O&M Services in 2015. He 
joined Eland as Managing Director of Nigerian operations.
Adebayo has a degree in Chemical Engineering from the 
University of Ife and completed a GMP from Harvard.
John Downey
Chief Technical Officer
 
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.
Gafar Olagunju
General Manager, Human Resources & Services
 
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.
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.
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 has a Masters degree in Mechanical Engineering and 
has been a registered Professional Engineer in British 
Columbia since 1974.
Gilles Krijger
Technical Director
 
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. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
31
Hilary Azoba
Drilling Manager
 
Hilary Azoba is a versatile Petroleum Engineer and 
Petroleum Projects Development Manager with 27 years’ 
experience working for major energy companies in Nigeria, 
Oman, Gabon, UK, USA, Russia, and Canada among other 
countries. He 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. 
Edward Cozens
General Manager, Commercial
 
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 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.
Emmanuel Ikechukwu Iwunze
General Manager, Finance
 
Emmanuel 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 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.
Theophilus O. Odigie
Operations Manager
 
Theophilus O.Odigie holds B.Sc. (Hons) in Instrumentation 
and Systems Engineering obtained in 1980 from Teeside 
Polytechnic now Teeside University, Middlesbrough, UK.
He has over 34 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.
Steven Archibald
Manager, Treasury & Corporate Finance
 
Steven has more than 12 years’ experience in a diverse 
range of roles and organisations. Prior to joining Eland 
in February 2011, Steven was based in Oslo as Finance 
Manager for Dana Petroleum, Norway. Prior to that he 
fulfilled a number of Financial Analyst, Management 
Accountant and Treasury roles with several oil & gas 
operator and service companies, including BP, Baker 
Hughes, Schlumberger and Transocean, as well as several 
SME service companies in the Aberdeen Area.
Steven graduated from the Robert Gordon University with 
a BA (Hons) degree in Business Studies. He is a Chartered 
Management Accountant and a Chartered Global 
Management Accountant.
Michael Cameron
Head of Finance
 
Michael has over 20 years’ oil and gas industry experience 
primarily with Operator companies. After qualifying with 
KPMG Michael gained oil industry experience first with 
Transocean before moving to Hess where he latterly 
headed up the Budgeting and Forecasting team for the 
North West Europe region. Michael joined Dana Petroleum 
in 2003 where he spent over 10 years covering a variety 
of increasingly senior financial and management roles, 
during which time Dana expanded both within the UK and 
internationally into Africa. Prior to his departure he held the 
position of Country Finance Manager for the UK Business 
Unit and was a member of the Senior Management Team. 
Michael joined Eland in June 2016 from the Parkmead 
Group where he was Group Financial Controller.
Michael graduated from the University of Aberdeen with 
a BA (Hons) degree in Accounting. He is a Chartered 
Accountant having qualified with KPMG. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
32
Strategic Report Governance Financial Statements Other information
DIRECTORS’ REPORT
Results and Dividend
The group consolidated loss after tax for the year was $30,412,000 (2015: loss of $6,762,000). The Directors do not 
propose a dividend (2015: $nil).
Details of significant events affecting the Company and Group since the balance sheet date are given in note 34 to 
the financial statements. 
A fair and balanced review of the business including future developments is included in the Strategic Report on 
pages 1 to 27.
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 21 of the consolidated financial statements. The Company has 
employee share option plans in place, full details of which can be found in note 30 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 31 to the financial statements.
Directors
Biographies of the present Directors of the Company are listed on pages 28 and 29.
Henry ‘Harry’ Wilson retired from his role as Chairman of the Company on 31 December 2015, and Robert Lambert 
retired from his role as Non-executive director on that same date. Also on that date, the Company appointed 
Grégory Stoupnitzky to the Board as a Non-executive Director. Following Mr Wilson’s retirement, Russell Harvey 
assumed the role of Non-executive Chairman, with effect from 31 December 2015. In May 2016, Olivier Serra was 
appointed as CFO-designate and was subsequently appointed as CFO and executive director on 31 May 2016.  
On the same date, Louis Castro retired from the Board. On 9 July 2016, Richard Norris resigned and Henry Obi 
replaced him as a non-executive director.
In accordance with the Company’s Articles of Association, Henry Obi retires at the AGM and, being eligible, offers 
himself for re-election. In addition, having served longest in office of the remaining directors and last re-elected 
George Maxwell is required to retire, and being eligible, offers himself for re-election.
Details of the remuneration of the Directors is disclosed in the Remuneration Report on pages 38 to 41.
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. 
Given the current focus in the sector to manage costs, the Group intends to undertake an audit tender process in 
2017. Pending the results of this process, Deloitte LLP has agreed to be reappointed at the forthcoming Annual 
General Meeting.
Going Concern
In assessing its conclusion on going concern, the Group has prepared cash, funding and liquidity forecasts 
through this year and next, which forecast that the group will remain compliant with its covenants. In making this 
assessment, the Directors note that in May 2017 the Forcados export terminal was re-opened and production has 
been restored back through the Forcados export line. 
However, the sustained closure of the Forcados terminal from February 2016 has placed working capital pressure 
on the Group and consequently, as at the date of issue of the Annual Report the Group has net current liabilities 
of $49.0 million, including cash of $6 million, which will require careful working capital management in the coming 
months to unwind.  Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
33
As such, the Directors have concluded that material uncertainties exist any of which could lead to a liquidity 
shortfall or the Company becoming non-compliant with its loan covenants in the near term, including:
1)  Operational performance – where a further sustained period of closure of the Forcados terminal, or operational 
issues at the Opuama field, would lead to a period where the Group is unable to produce and/or lift crude oil, or 
would require to resume shipping operations;
2)  Oil prices – a deterioration of Brent crude prices would lead to reduced cash flows from operations;
3)  Completion of shipping operations – further delays to expected cash receipts from shipping operations, 
where as mentioned in the CEO statement, the Group’s crude buyer will settle outstanding invoices totalling 
approximately $8 million once the FPSO’s technical capacity to export is confirmed. The Group has to date 
mitigated this risk by managing vendor payments, and linking them to the expected dates of cash inflows, but 
any further delay would require further agreement from suppliers to defer payment;
4)  Shareholder Management Fees – the Group currently holds liabilities to Elcrest’s indigenous shareholder of 
$17.25 million for which the timing of cash outflows has not yet been agreed. This liability reflects a $17.25 million 
invoice received by Elcrest against which a payment of $1m has been made, with no further settlement included 
in the Group’s current 12 month forecast. There is a risk that the local shareholder of Elcrest will request from 
Elcrest an acceleration of payments beyond the funding available to Elcrest. In making a determination with 
respect to payment settlement plan, Elcrest shall continue to exercise its fiduciary duty towards its board and 
shareholders, taking into account the objectives to continue to develop OML40 and preserve the integrity of all 
its agreements in place, including similar levels of management fees payable from Elcrest to Eland and Elcrest’s 
loan payable to an Eland subsidiary. The Group shall carry out the same duties via its participation in Elcrest, 
with all the means, remedies and loan security available to it;
5)  NPDC – the Group currently holds liabilities to NPDC of $14.0 million, and the intention is to settle this liability 
through funding NPDC’s share of future capital projects, subject to capital availability. In addition, there are 
rejected cash call amounts in issue, disclosed in note 33, which are subject to JV audit. As such, there is a risk 
that NPDC seek payment for amounts, or the JV audit does not support Elcrest’s position, and funding might 
not be available to Elcrest to settle amounts then being called;
6)  Covenant compliance – the Group’s historic and forecast covenant calculations exclude the Elcrest shareholder 
management fee, overlift position and NPDC liabilities. The details and assumptions to be used in the covenant 
calculations are disclosed and discussed with the lender, Standard Chartered Bank. Maintaining covenant 
compliance through the coming 12 months will be reliant on both increased production and cashflow, and 
agreement to exclude these liabilities from covenant calculations determined and submitted by the Group to its 
lender as per the terms of the facility. The covenant calculations as at 31 December 2016 were submitted prior 
to recognition of the Shareholder Management Fee noted above, and therefore excluded this amount. Should 
Eland be required to resubmit its covenant calculations, the Company would remove these charges from its 
determination in order to preserve compliance with the covenant in accordance with its interpretation of the 
facility agreement. Maintaining covenant compliance therefore requires the lender to accept the adjustments to 
the calculation, as per the terms of the facility. There is no guarantee that the lender will approve the covenant 
calculation at the time it is made.
The Directors have assessed a number of potential mitigating actions if any one or more of the above uncertainties 
crystallises, which include the recommencement of shipping activities, seeking credit agreements to defer 
cash outflows, and capital markets funding. As such, the Directors acknowledge the above risks are material 
uncertainties which could cast significant doubt on the Group’s ability to continue as a going concern and 
therefore, the Group may be unable to realise its assets and discharge its liabilities in the normal course of business, 
but believe mitigating actions are in place to counter those risks. 
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 Group 
has 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. 
The financial statements do not include the adjustments that would result if the Company does not continue as a 
going concern.
Further information on 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 pages 26 to 27. Analysis of the Group’s financial position, its cash flows, liquidity position, cost 
estimates and borrowing facilities are described in the Financial Review on pages 22 and 23, and in notes 3 and 33 
of the Financial Statements.
Approved by the Board of Directors and signed on behalf of the Board.
Olivier Serra 
Chief Financial Officer
6 June 2017 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
34
Strategic Report Governance Financial Statements Other information
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. 
The guidelines and the code are complied with 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 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, Russell Harvey and Grégory Stoupnitzky. 
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. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
35
Remuneration Committee
The Remuneration Committee consists of Russell Harvey as Chairman, Henry Turcan and Henry Obi. 
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. 
For each such plan, the Committee 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.
Technical and Reserves Committee
The Technical and Reserves Committee consists of Russell Harvey as Chairman, and Henry Obi.
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 Russell Harvey as Chairman, Grégory Stoupnitzky and Henry Turcan.
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 2016*
Board In 
Attendance
Audit 
Committee
In Attendance
Remuneration 
Committee
In Attendance
Reserves 
Committee
In Attendance
Nomination
Committee
In Attendance
Executive Directors
George Maxwell 7 1 – – –
Louis Castro (resigned 31 May 2016) 4 1 – – –
Olivier Serra (appointed 31 May 2016) 4 3 – – –
Non-Executive Directors
Russell Harvey 7 3 1 2 2
Richard Norris (resigned 9 July 2016) 4 1 1 2 –
Henry Turcan** 7 3 1 – –
Henry Obi (appointed 9 July 2016) 3 – 1 – –
Grégory Stoupnitzky 7 3 – – 2
*    During 2016, there were 7 Board meetings, 3 Audit Committee meetings, 1 Remuneration Committee meeting, 2 Reserves Committee 
meetings and, 2 Nomination Committee meetings.
**  Joined the Nomination Committee in May 2017. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
36
Strategic Report Governance Financial Statements Other information
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.
Russell Harvey 
Chairman
6 June 2017
CORPORATE GOVERNANCE REPORT continued Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
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  Olivier Serra
Chief Executive Officer Chief Financial Officer
6 June 2017  6 June 2017 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
38
Strategic Report Governance Financial Statements Other information
DIRECTORS’ REMUNERATION REPORT 
for the year ended 31 December 2016
The Remuneration Committee (the ‘Committee’) consists of Russell Harvey as Chairman, Henry Turcan and Henry 
Obi. 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.
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 2016 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 cash generation and budget performance. 
The Group continues to monitor key metrics on absolute and relative 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 2016 
and as a result, in light of the low oil price environment, certain steps were taken as deemed appropriate by the 
Board, in order to reduce or defer salary costs across the Group.  Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
39
Employee Benefits
Of the Executive Directors, George Maxwell, Louis Castro and Olivier Serra received car allowances in the period. 
In 2016, pension contributions totaling £59,000 (2015: £66,000) were made in respect of the current year. 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 41 and in note 32 of the 
Financial Statements.
The Company provides the Company’s Directors and Officers with third party indemnity insurance.
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’). Since June 2012 
a total of 14,393,263 options have been granted under the Plans to employees and Directors over the Ordinary 
Shares of the Company. As at 31 December 2016 a total of 6,968,738 options remain outstanding with 3,824,252 
of these options available to the current Directors. Details of the terms of the options awarded to Directors and 
employees under the Plan are set out in note 30 to the Financial Statements.
The grant of options to Directors under the Plan results in the following position at the date of this report. 
Director
Position as at 
1 January 2016
New options
 granted in 2016
Lapsed * 
in 2016
New options
 granted in 2017
Total number 
of options held 
at the date of 
this report
George Walter Mitchell Maxwell 3,765,667 500,000 (941,415) – 3,324,252
Louis Emmanuel Castro (retired 31 May 2016) 130,000 200,000 (330,000) – –
Russell Seth Harvey – 500,000 – – 500,000
 
* This also includes shares forfeited in exchange for a hurdle rate reduction in the exercise price of the remaining shares.
Any director not listed above hold no options at the date of this report.
The Board intends to implement a new performance based LTIP.   Any grants will be made within the existing 
scheme limits.  Whilst neither the quantum of any award nor the identity of individual beneficiaries has been 
decided, it is envisaged that the initial awards will be based upon the following criteria:
• Minimum 3 year vesting period with a nominal exercise price of 10p per share
•  Up to 60% of any award will vest subject to achievement of Total Shareholder Return (“TSR”).  TSR will be 
measured on a straight line basis from a Base Price of 50p per share for the volume weighted average price 
(“VWAP”) for 20 trading days post the release of the audited accounts for the year ended 31st December 2019 
or post 3 years from grant, whichever is the longer (“VWAP Period”). 0% will vest at 50p and the target price 
for full vesting will be an increase of 300% from the Base Price to 200p.
•  Up to 15% of any award will vest if the TSR is deemed to have outperformed any contribution from an increase 
in the oil price.  For this purpose it will be calculated as having been achieved if the VWAP is greater than the 
average Brent oil price during the VWAP period.
•  Up to 25% of any award will vest subject to achieving production growth from existing assets.  Vesting 
commences on average sales volumes being achieved of 25,000 bopd over any consecutive 3 month period 
during the 3 year vesting period and will vest in a straightline base to full vesting at average sales volumes of 
40,000 bopd.
It is envisaged that the quantum of individual awards will be influenced by the extent to which existing share 
options, save for those granted in the year ended 31st December 2016, are relinquished. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
40
Strategic Report Governance Financial Statements Other information
Performance Graph
The following graph shows the Company’s total shareholder return (TSR) from January 2016 to May 2017, against 
the FTSE AIM All-Share Index and the FTSE AIM Oil & Gas index (re-based to 100):
50
70
90
110
130
150
170
190
210
230
Eland share price Aim All Share Aim E&P Index
Jan-16
 
Source: Canaccord Acuity 
DIRECTORS’ REMUNERATION REPORT continued 
for the year ended 31 December 2016 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
41
Directors’ Remuneration
The remuneration of the Directors who held office in the year ended 31 December 2016, payable by Group 
companies, was as follows:
Directors
Fees and 
salary
£000
Deferred
9 
salaries
and fees
£000
Pension
£000
Benefits 
in kind
£000
Total 
2016
£000
Total 
2015
£000
Executive Directors
George Walter Mitchell Maxwell 335 52 38 3 428 497
Olivier Serra
1
156 – 10 1 167 –
Henry George Wilson
2
16 – – 1 17 194
Louis Emmanuel Castro
3
130 – 11 3 144 334
Non-Executive Directors
Russell Seth Harvey
4
113 14 – – 127 57
Gregory Stoupnitzky
5
46 10 – – 56 –
Henry Obi
6
19 3 – – 22 –
Henry Turcan 39 10 – – 49 48
Richard Norris
7
21 – – – 21 49
Robert Alexander Lambert
8
13 – – – 13 51
Total 888 89 59 8 1,044 1,230
1 Olivier Serra was appointed to the Board on 1 May 2016, and appointed CFO on 31 May 2016.
2 Henry George Wilson stood down from the Board on 31 December 2015.
3  In addition to the above amounts, Louis Castro received compensation for loss of office amounting to £212,000 in 2016. Louis Castro 
stood down from the Board on 31 May 2016.
4  Russell Seth Harvey was appointed non-executive Chairman of the Board on 1 January 2016. He was previously a non-executive director.
5 Gregory Stoupnitzky was appointed to the Board on 1 January 2016.
6 Henry Obi was appointed to the Board on 9 July 2016.
7 Richard Norris stood down from the Board on 9 July 2016.
8 Robert Alexander Lambert stood down from the Board on 31 December 2015.
9  The deferred salaries and fees relate to amounts payable in respect of 2016, but which were not paid as at 31 December 2016. Deferred 
amounts relating to Executive Directors were paid in Q1 2017, whereas amounts relating to Non-Executive Directors remain unpaid as at 
the date of publication.
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 
6 June 2017 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
42
Strategic Report Governance Financial Statements Other information
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 2016, which 
comprise the Group Income Statement, the Group and Parent Company Balance Sheets, the Group and Parent 
Company Statements of Changes in Equity, the Group and Parent Company Cash Flow Statements, and the related 
notes 1 to 34. 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 2016 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. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
43
Emphasis of Matter – Going Concern
In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the 
disclosure made in note 2 to the financial statements concerning the Group’s ability to continue as a going concern. 
The Group have identified material uncertainties in relation to operational performance, oil prices, completion of 
shipping operations, the settlement of shareholder management fees, the settlement of amounts due to NPDC, 
and current and future covenant compliance, any of which could lead to a liquidity shortfall or the Group being 
or becoming non-compliant with its covenants. These conditions, along with the other matters explained in note 
2 to the financial statements, indicate the existence of a material uncertainty which cast significant doubt on the 
Group’s ability to continue as a going concern. The financial statements do not include the adjustments that would 
result if the Group was unable to continue as a going concern. 
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•  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; and
•  the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal 
requirements.
In the light of the knowledge and understanding of the company and its environment obtained in the course of the 
audit, we have not identified any material misstatements in the Strategic Report or the Directors’ Report.
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.
Jon Thomson FCA (Senior statutory auditor)
for and on behalf of Deloitte LLP
Statutory Auditor, London, United Kingdom
6 June 2017 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
44
Strategic Report Governance Financial Statements Other information
CONSOLIDATED INCOME STATEMENT 
for the year ended 31 December 2016
Note
2016
$000’s
Represented*
2015
$000’s
Revenue 4 2,373 18,108
Cost of sales (8,197) (20,237)
Shareholder management fee 18 (17,250) 2,250
Gross (loss)/profit (23,074) 121
Administrative expenses (5,832) (6,386)
Operating loss (28,906) (6,265)
Finance income 8 306 153
Finance costs 8 (2,842) (3,462)
Loss before tax 5 (31,442) (9,574)
Income tax credit 9 1,030 2,812
Loss after tax for the year from continuing operations (30,412) (6,762)
Profit/(loss) attributable to:
Owners of the Company 16,881 20,404
Non-controlling interests 26 (47,293) (27,166)
(30,412) (6,762)
Earnings per share Note
2016
$
2015
$
From continuing operations:
Basic 10 0.09 0.13
Diluted 10 0.09 0.13
 
There were no items of comprehensive income in the current or prior year, other than the loss for the year. 
Accordingly, no statement of comprehensive income is presented.
All activities relate to continuing operations.
The notes on pages 51 to 83 form part of these financial statements.
* The prior year comparative for cost of sales has been represented to split out the Shareholder management fee 
separately to aid comparability with 2016. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
45
CONSOLIDATED BALANCE SHEET 
as at 31 December 2016
Note
2016
$000’s
2015
$000’s
Non-current assets
Intangible oil and gas assets 11 12,200 11,052
Property, plant and equipment 12 190,005 183,585
Deferred tax asset 9 4,195 3,596
206,400 198,233
Current assets
Inventory 14 353 353
Trade and other receivables 15 1,213 5,006
Current tax 426 –
Cash and cash equivalents 16 11,144 8,461
13,136 13,820
Total assets 219,536 212,053
Current liabilities
Trade and other payables 17 (23,156) (20,835)
Other payable – shareholder management fee 18 (17,250) –
(40,406) (20,835)
Net current liabilities (27,270) (7,015)
Non-current liabilities
Decommissioning provision 20 (10,120) (9,809)
Bank loan 19 (13,334) (13,367)
(23,454) (23,176)
Total liabilities (63,860) (44,011)
Net assets 155,676 168,042
Shareholders’ equity
Share capital 21 253,497 248,039
Share premium 22 12,452 –
Other reserve 23 (10,542) (10,542)
Retained earnings 24 46,429 29,412
Translation reserve 25 1,429 1,429
Equity attributable to the owners of the Company 303,265 268,338
Non-controlling interests 26 (147,589) (100,296)
Total equity 155,676 168,042
 
The notes on pages 51 to 83 form part of these financial statements.
The financial statements of Eland Oil & Gas PLC, registered number SC 364753, were approved and authorised for 
issue by the Board of Directors on 6 June 2017.
George Maxwell   Olivier Serra
Chief Executive Officer  Chief Financial Officer Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
46
Strategic Report Governance Financial Statements Other information
COMPANY BALANCE SHEET 
as at 31 December 2016
Note
2016
$000’s
2015
$000’s
Non-current assets
Investments in group undertakings 13 191,915 189,250
Property, plant and equipment 12 334 565
192,249 189,815
Current assets
Trade and other receivables 15 58,223 49,011
Current tax 426 –
Cash and cash equivalents 16 5,456 753
64,105 49,764
Total assets 256,354 239,579
Current liabilities
Trade and other payables 17 (3,782) (3,357)
Net current assets 60,323 46,407
Net assets 252,572 236,222
Shareholders’ equity
Share capital 21 253,497 248,039
Share premium 22 12,452 –
Other reserve 23 (10,542) (10,542)
Retained losses 24 (3,906) (2,346)
Translation reserve 25 1,071 1,071
Equity attributable to the owners of the Company 252,572 236,222
The Company only loss for the year was $1,696,000 (2015: $4,062,000).
The notes on pages 51 to 83 form part of these financial statements.
The financial statements of Eland Oil & Gas PLC, registered number SC 364753, were approved by the Board of 
Directors on 6 June 2017.
George Maxwell   Olivier Serra
Chief Executive Officer  Chief Financial Officer Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
47
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
year ended 31 December 2016
Share 
capital
$000’s
Share
premium
$000’s
Other
reserve
$000’s
Retained
losses
$000’s
Translation
reserve 
$000’s
Total
$000’s
Non–
controlling
interests
$000’s
Total 
equity
$000’s
Balance at 1 January 2015 248,039 – (15,542) 8,470 1,429 242,396 (73,130) 169,266
Profit/(loss) for the year and total 
comprehensive profit/(loss)
– – – 20,404 – 20,404 (27,166) (6,762)
Cancellation of forward purchase 
arrangement of shares (note 23)
– – 5,000 – – 5,000 – 5,000
Share-based payments (note 30) – – – 812 – 812 – 812
Other adjustments – – – (274) – (274) – (274)
Balance at 31 December 2015 248,039 – (10,542) 29,412 1,429 268,338 (100,296) 168,042
Profit/(loss) for the year and total 
comprehensive profit/(loss)
– – – 16,881 – 16,881 (47,293) (30,412)
Share-based payments (note 30) – – – 136 – 136 – 136
Issue of share capital (note 21) 5,458 12,452 – – – 17,910 – 17,910
Balance at 31 December 2016 253,497 12,452 (10,542) 46,429 1,429 303,265 (147,589) 155,676
 
The notes on pages 51 to 83 form part of these financial statements. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
48
Strategic Report Governance Financial Statements Other information
COMPANY STATEMENT OF CHANGES IN EQUITY 
year ended 31 December 2016
Share 
Capital
$000’s
Share
 Premium
$000’s
Other
 Reserve
$000’s
Retained
(losses)/ 
Earnings
$000’s
Translation
Reserve
$000’s
Total 
Equity
$000’s
Balance at 1 January 2015 248,039 – (15,542) 904 1,071 234,472
Loss for the year and total comprehensive loss – – – (4,062) – (4,062)
Share-based payments (note 30) – – – 812 – 812
Cancellation of forward purchase arrangement of shares 
(note 23)
– – 5,000 – – 5,000
Balance at 31 December 2015 248,039 – (10,542) (2,346) 1,071 236,222
Loss for the year and total comprehensive loss – – – (1,696) – (1,696)
Share-based payments (note 30) – – – 136 – 136
Issue of share capital (note 21) 5,458 12,452 – – – 17,910
Balance at 31 December 2016 253,497 12,452 (10,542) (3,906) 1,071 252,572
 
The notes on pages 51 to 83 form part of these financial statements. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
49
CONSOLIDATED CASH FLOW STATEMENT
year ended 31 December 2016
Note
2016
$000’s
2015
$000’s
Cash used in operating activities 27 (5,057) (3,565)
Interest and financing fees paid (2,449) (3,210)
Income tax paid – (214)
Net cash used in operating activities (7,506) (6,989)
Investing activities
Development expenditure (5,122) (11,212)
Exploration and evaluation expenditure (1,758) (1,102)
Purchases of fixtures and equipment (25) (741)
Net cash used in investing activities (6,905) (13,055)
Financing activities
Net proceeds on issue of shares 17,910 –
Net proceeds from borrowings – 13,525
Net cash from financing activities 17,910 13,525
Net increase/(decrease) in cash and cash equivalents 3,499 (6,519)
Cash and cash equivalents at the beginning of the year 8,461 15,017
Effect of foreign exchange rate changes (816) (37)
Cash and cash equivalents at the end of the year 16 11,144 8,461
 
The notes on pages 51 to 83 form part of these financial statements. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
50
Strategic Report Governance Financial Statements Other information
COMPANY CASH FLOW STATEMENT
year ended 31 December 2016
Note
2016
$000’s
2015
$000’s
Cash used in operating activities 27 (8,621) (1,376)
Interest and financing fees paid (117) (1,197)
Income tax receivable/(paid) – (214)
Net cash used in operating activities (8,738) (2,787)
Investing activities
Investment in Group undertakings (2,665) (7,836)
Purchases of fixtures and equipment (6) (442)
Proceeds from sale of fixtures and equipment – –
Net cash used in investing activities (2,671) (8,278)
Financing activities
Net proceeds on issue of shares 17,910 –
Net cash from financing activities 17,910 –
Net increase/(decrease) in cash and cash equivalents 6,501 (11,065)
Cash and cash equivalents at the beginning of the year 753 11,857
Effect of foreign exchange rate changes (1,798) (39)
Cash and cash equivalents at the end of the year 16 5,456 753
 
The notes on pages 51 to 83 form part of these financial statements. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
51
NOTES TO THE FINANCIAL STATEMENTS
year ended 31 December 2016
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 (the “Company”, together with its subsidiaries and controlled entities, the “Group”) is a 
company incorporated in Scotland, 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 2016.
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 EU  
IFRS Regulation.
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 2016 of $1,696,000 (2015: loss of $4,062,000).
Going concern
In assessing its conclusion on going concern, the Group has prepared cash, funding and liquidity forecasts 
through this year and next, which forecast that the group will remain compliant with its covenants. In making this 
assessment, the Directors note that in May 2017 the Forcados export terminal was re-opened and production has 
been restored back through the Forcados export line. 
However, the sustained closure of the Forcados terminal from February 2016 has placed working capital pressure 
on the Group and consequently, as at the date of issue of the Annual Report the Group has net current liabilities 
of $49.0 million, including cash of $6 million, which will require careful working capital management in the coming 
months to unwind. 
As such, the Directors have concluded that material uncertainties exist any of which could lead to a liquidity 
shortfall or the Company becoming non-compliant with its loan covenants in the near term, including:
1)  Operational performance – where a further sustained period of closure of the Forcados terminal, or operational 
issues at the Opuama field, would lead to a period where the Group is unable to produce and/or lift crude oil, or 
would require to resume shipping operations;
2)  Oil prices – a deterioration of Brent crude prices would lead to reduced cash flows from operations;
3)  Completion of shipping operations – further delays to expected cash receipts from shipping operations, 
where as mentioned in the CEO statement, the Group’s crude buyer will settle outstanding invoices totalling 
approximately $8 million once the FPSO’s technical capacity to export is confirmed. The Group has to date 
mitigated this risk by managing vendor payments, and linking them to the expected dates of cash inflows, but 
any further delay would require further agreement from suppliers to defer payment;
4)  Shareholder Management Fees – the Group currently holds liabilities to Elcrest’s indigenous shareholder of 
$17.25 million for which the timing of cash outflows has not yet been agreed. This liability reflects a $17.25 million 
invoice received by Elcrest against which a payment of $1m has been made, with no further settlement included 
in the Group’s current 12 month forecast. There is a risk that the local shareholder of Elcrest will request from 
Elcrest an acceleration of payments beyond the funding available to Elcrest. In making a determination with 
respect to payment settlement plan, Elcrest shall continue to exercise its fiduciary duty towards its board and 
shareholders, taking into account the objectives to continue to develop OML40 and preserve the integrity of all 
its agreements in place, including similar levels of management fees payable from Elcrest to Eland and Elcrest’s 
loan payable to an Eland subsidiary. The Group shall carry out the same duties via its participation in Elcrest, 
with all the means, remedies and loan security available to it;
5)  NPDC – the Group currently holds liabilities to NPDC of $14.0 million, and the intention is to settle this liability 
through funding NPDC’s share of future capital projects, subject to capital availability. In addition, there are 
rejected cash call amounts in issue, disclosed in note 33, which are subject to JV audit. As such, there is a risk 
that NPDC seek payment for amounts, or the JV audit does not support Elcrest’s position, and funding might 
not be available to Elcrest to settle amounts then being called; Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
52
Strategic Report Governance Financial Statements Other information
2. Significant accounting policies continued
6)  Covenant compliance – the Group’s historic and forecast covenant calculations exclude the Elcrest shareholder 
management fee, overlift position and NPDC liabilities. The details and assumptions to be used in the covenant 
calculations are disclosed and discussed with the lender, Standard Chartered Bank. Maintaining covenant 
compliance through the coming 12 months will be reliant on both increased production and cashflow, and 
agreement to exclude these liabilities from covenant calculations determined and submitted by the Group to its 
lender as per the terms of the facility. The covenant calculations as at 31 December 2016 were submitted prior 
to recognition of the Shareholder Management Fee noted above, and therefore excluded this amount. Should 
Eland be required to resubmit its covenant calculations, the Company would remove these charges from its 
determination in order to preserve compliance with the covenant in accordance with its interpretation of the 
facility agreement. Maintaining covenant compliance therefore requires the lender to accept the adjustments to 
the calculation, as per the terms of the facility. There is no guarantee that the lender will approve the covenant 
calculation at the time it is made.
The Directors have assessed a number of potential mitigating actions if any one or more of the above uncertainties 
crystallises, which include the recommencement of shipping activities, seeking credit agreements to defer 
cash outflows, and capital markets funding. As such, the Directors acknowledge the above risks are material 
uncertainties which could cast significant doubt on the Group’s ability to continue as a going concern and 
therefore, the Group may be unable to realise its assets and discharge its liabilities in the normal course of business, 
but believe mitigating actions are in place to counter those risks. 
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 Group 
has 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. 
The financial statements do not include the adjustments that would result if the Company does not continue as a 
going concern.
Further information on 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 pages 26 to 27. Analysis of the Group’s financial position, its cash flows, liquidity position, cost 
estimates and borrowing facilities are described in the Financial Review on pages 22 and 23, and in notes 3 and 33 
of the Financial Statements.
Basis of consolidation
The Group’s 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 the 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, none of which 
have a material impact on the Group’s annual results.
• IAS 1 (amendments) Disclosure initiatives
• IFRS 10, IFRS 12 and IAS 28 (amendments) Investment Entities: Applying the Consolidation Exception
• IFRS 11 (amendments) Accounting for Acquisitions of Interests in Joint Operations
• IAS 16 and IAS 38 (amendments) Clarification of Acceptable Methods of Depreciation and Amortisation
• IAS 16 and IAS 41 (amendments) Agriculture: Beaver Plants
• IAS 27 (amendments) Equity Method in Separate Financial Statements
•  Annual Improvements to IFRSs: 2012-14 Cycle; Amendments to: IFRS 5 Non-current Assets Held for Sale and 
Discontinued Operations, IFRS 7 Financial Instruments: Disclosures, IAS 19 Employee Benefits and IAS 34 
Interim Financial Reporting
NOTES TO THE FINANCIAL STATEMENTS
year ended 31 December 2016 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
53
2. Significant accounting policies continued
At the date of approval 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 9 Financial Instruments
• IFRS 14 Regulatory Deferral Accounts
• IFRS 15 Revenue from Contracts with Customers
• IFRS 16 Leases
•  IFRS 10 and IAS 28 (amendments) Sale or Contribution of Assets between an Investor and its Associate  
or Joint Venture
• IAS 12 (amendments) Recognition of Deferred Tax Assets for Unrealised Losses
• IAS 7 (amendments) Disclosure Initiative
• IFRS 2 (amendments) Classification and Measurement of Share-based Payment Transactions
• IFRS 4 (amendments) Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts
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, IFRS 15 may have an impact on revenue 
recognition and related disclosures. IFRS 16 is likely to require a change in the treatment of our lease agreements. 
IFRS 9 will affect both the measurement of and disclosures relating to financial instruments. Beyond the 
information above, it is not practicable to provide a reasonable estimate of the effect of IFRS 15, IFRS 16 and  
IFRS 9 until a detailed review has been completed.
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 joint operations 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 
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.
Intangible oil and gas assets – Pioneer tax
Amounts paid for the approval of Pioneer tax status are initially capitalised and then amortised on a straight-line-
basis over the expected tax relief period.
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-licensing 
expenditures on oil and gas assets are recognised as an expense within the income statement when incurred. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
54
Strategic Report Governance Financial Statements Other information
2.  Significant accounting policies continued
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 value 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 the impairment test. Development and production assets are 
accumulated generally on a field-by-field basis and represent the full 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 purchase 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
All classes of other property, plant 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.
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 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.
Impairment of exploration and evaluation assets
Exploration and evaluation (“E&E”) costs are not amortised prior to conclusion of appraisal activities.  Once 
active exploration is completed the asset is assessed for impairment.  If commercial reserves are discovered then 
the carrying value of the E&E asset is reclassified as a development and production (“D&P”) asset, following 
development sanction, but only after the carrying value is assessed for impairment and where appropriate its 
carrying value adjusted.  If commercial reserves are not discovered the E&E asset is written off to the income 
statement.
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.
NOTES TO THE FINANCIAL STATEMENTS
year ended 31 December 2016 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
55
2.  Significant accounting policies continued
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. Under the terms of the Reserves Based Lending facility, the Company is required to set aside as Restricted 
Cash amounts to cover the costs of servicing the debt and stamp duty. As at 31 December 2016, under the terms of 
the RBL facility, the balance of restricted cash amounted to $3,986,000. A re-determination of the facility amount 
was undertaken in April 2017, and consequently the required amount of restricted cash was reduced to $1,106,000. 
See account note 16 for further details.
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 of the receivable can be measured reliably.
Decommissioning provision
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 income statement. 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 income statement as 
finance costs.
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.
Finance income and costs
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. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
56
Strategic Report Governance Financial Statements Other information
2.  Significant accounting policies continued
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.
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.
During the year the Group adopted the use of the parallel exchange rate in Nigeria, which more closely reflects the 
rate at which the Group converts US Dollars to Nigerian Naira. Further details of the resulting exchange impact are 
provided in note 5.
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 initially measured at fair value and subsequently measured at amortised cost. The exception 
to this is underlift which is valued at market value. Further details can be found on page 68.
Trade and other payables
Accounts payable are initially measured at fair value and subsequently measured at amortised cost. The exception 
to this is overlift which is valued at market value. Further details can be found on page 69.
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 account note 31 to the financial statements.
NOTES TO THE FINANCIAL STATEMENTS
year ended 31 December 2016 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
57
2.  Significant accounting policies continued
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.
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.
Share-based payments
Equity settled share-based payments are measured at the fair value of the equity instruments at the grant date. 
The fair value excludes 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 account note 30.
The fair value determined at the grant date 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 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 scheme are charged as an expense as they fall due. The Group 
had no defined benefit schemes in place during the years presented.
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.
3. Critical accounting judgements
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. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
58
Strategic Report Governance Financial Statements Other information
3. Critical accounting judgements continued
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 capital 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.
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 carrying value of the Group’s PPE balance, the 
estimated level of reserves and resources and hence the Group’s ability to generate revenue beyond June 2019.
Amounts payable to partners in oil and gas arrangements (Note 17)
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. From time to time, management disputes 
such expenditures on the basis that they do not meet these criteria, and when this occurs management accrues at 
the period end for its best estimate of the amounts payable to the operator. Consequently, the amounts recognised 
as accruals as at 31 December 2016 reflect 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 which are being disputed, management consider any 
liability in this respect to be remote. Further details can be found in Note 33.
Contingent liability (Note 33)
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 $3,000,000 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 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.
NOTES TO THE FINANCIAL STATEMENTS
year ended 31 December 2016 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
59
3. Critical accounting judgements continued
Critical accounting 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, compared to the date of the acquisition of the OML40 licence, together with the 
disruption experiences at Forcados terminal in 2016 management have performed a full impairment review of the 
carrying value of the Group’s interest in OML 40 as at 31 December 2016. The impairment review assumes a life of 
field to 2026, an oil price profile benchmarked to ICE commodity forward prices to end 2018 and thereafter based 
on analysts’ forecasts (specifically $56/bbl in 2017, $60/bbl in 2018, $64/bbl in 2019 rising steadily to $77/bbl by 
2022 and held consistent thereafter), management’s best estimates of proved and probable reserves and a 12% 
post-tax discount rate. Based on this calculation, no impairment of the carrying value of the Group’s oil and gas 
assets was identified as at 31 December 2016.
Decommissioning provision (Note 20)
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 20.
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. An updated decommissioning review is likely to be undertaken during 
2017. 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 20.
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 and changes are reflected prospectively. 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 DD&A 
and impairment testing of oil and gas property, plant and equipment. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
60
Strategic Report Governance Financial Statements Other information
4. Revenue
An analysis of the group’s revenue is as follows:
Group
2016
$000’s
Group
2015
$000’s
Sale of oil 2,373 18,108
2,373 18,108
Revenue derives from an offtake contract with its partner, Shell Western Supply and Trading Limited. See note 28 
on segmental analysis.
5. Loss for the year
The loss before tax for the year is stated after charging/(crediting):
2016
$000’s
Restated
2015
$000’s
Depreciation on property, plant and equipment (note 12) 1,320 4,657
Amortisation of other intangible assets (note 11) 1,500 1,404
Net foreign exchange gains
1
(6,511) (389)
Royalties 609 3,313
Wages, salaries and other employment costs
2
9,722 11,756
Shareholder management fee
3
17,250 (2,250)
Adjusted EBITDA
Adjusted EBITDA is a non-IFRS measure that represents net income before additional specific items that are 
considered to impact the comparability of the Group’s performance in each period or with other businesses.  
The Group defines Adjusted EBITDA as the operating result for the year excluding depreciation, amortisation  
and shareholder management charges. The items excluded are non-cash in the year, and individually or  
collectively material.
The Group believes that Adjusted EBITDA is an important indicator of the operational strength and the 
performance of the business, and provides a meaningful performance indicator of underlying operating  
cash generation.
Adjusted EBITDA is calculated as follows:
2016
$000's
2015
$000's
Operating Loss (28,906) (6,265)
Add:
Depreciation on Property, Plant and Equipment 1,320 4,657
Amortisation of other intangibles 1,500 1,405
Shareholder management fee 17,250 (2,250)
Adjusted EBITDA (8,836) (2,453)
1
  The large foreign exchange gain above totaling $6,511,000 principally reflects the significant drop in the value of the Nigerian currency, Naira (NGN). The NGN: 
USD rate moved from NGN198: US$1 at 2015 year-end to NGN487: US$1 at 2016 year-end. The Naira liabilities of the Group, particularly OML 40 liabilities, have 
been devalued in USD terms resulting in a large foreign exchange gain. All Naira exchange revaluations are classified within operating expenses. As noted in 
the accounting policies the Group adopted the use of the parallel rate in the year, the 2016 year end rate quoted above being the parallel rate. 
2
   Includes costs of $816,000 (2015: $880,000) relating to non-executive directors’ fees/employee benefits and other temporary employment costs not included 
in note 7 below. See account note 7 for further details on the 2015 restatement.
3
  The management fee charge above is in relation to a local Nigerian partner who provides logistical and support services. Full details are disclosed in note 18.
NOTES TO THE FINANCIAL STATEMENTS
year ended 31 December 2016 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
61
6. Auditor’s remuneration
The analysis of auditor’s remuneration is as follows:
2016
$000’s
2015
$000’s
Fee payable to the Company’s auditor for the audit of the Company’s annual accounts 246 314
The audit of the Company’s subsidiaries pursuant to legislation 167 128
Total audit fees 413 442
2016
$000’s
2015
$000’s
Fees payable to the Company’s auditor and their associates for other services to the Group 
Tax compliance services 12 15
Tax advisory services 13 41
Other assurance services 67 43
Total non-audit fees 92 99
The tax services predominantly relate to UK and overseas tax advice, controlled foreign company rules and transfer 
pricing advice.
The other assurance services relate to non-audit procedures on the Interim financial statements.
7. Staff costs
The average monthly number of employees (including Executive Directors) was:
Group Company
2016
No.
2015
No.
2016
No.
2015
No.
Management 4 4 3 3
Technical 20 19 6 5
Administration 22 19 13 11
46 42 22 19
Group Company
Their aggregate remuneration comprised:
2016
$000’s
Restated
2015
$000’s
2016
$000’s
2015
$000’s
Wages and salaries* 7,903 8,690 4,277 3,682
Social security costs* 414 882 345 474
Share-based payments 136 812 137 812
Pension costs* 452 493 281 275
8,905 10,877 5,040 5,243
* 2015 has been restated to remove $130,000 of non-staff related costs.
The Group operates a defined contribution pension scheme, and has no obligation to pay amounts other than 
the contributions. Obligations are recognised as staff costs and are expensed to the income statement in the 
periods during which services are rendered by employees. Contributions owed to the scheme at 31 December 2016 
amounted to $8,000 (2015: $37,000).  Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
62
Strategic Report Governance Financial Statements Other information
8. Finance income and costs
2016
$000’s
2015
$000’s
Interest and fees charged on JV billings (note 11) 306 153
Total finance income 306 153
RBL interest and fees (2,366) (1,481)
Unwinding of discount on decommissioning provision (note 20) (311) (265)
Interest on unpaid preference shares dividend (115) (10)
Cost of obtaining loan finance facility* – (1,706)
Bank charges (50) –
Total finance costs (2,842) (3,462)
 
* Relates to historical fees associated with obtaining and extending the Bridge loan facility which were expensed over the period of the facility.
9. Tax
2016
$000’s
2015
$000’s
Current tax
Adjustments in respect of prior year 431 –
Deferred tax
Origination and reversal of temporary differences 599 2,812
Total tax credit for the year 1,030 2,812
The standard rate of tax for the year is 65.75% (2015: 65.75%), being the current applicable rate of Nigerian 
Petroleum Profits Tax.
The total tax credit can be reconciled to the loss per the income statement as follows:
2016
$000’s
2015
$000’s
Loss before tax on continuing operations (31,442) (9,574)
Loss on activities multiplied by the relevant rate of tax of 65.75 % (2015: 65.75%) 20,673 6,295
Tax deducation on intercompany financing costs 38,355 30,479
Temporary differences on which no deferred tax is recognised (939) (3,160)
Non-deductible expenses for tax purposes (130) (120)
Losses not utilised in the period on which no deferred tax is recognised (57,959) (33,494)
Adjustments in respect of prior years 431 –
Recognition of deferred tax asset 599 2,812
Total tax credit 1,030 2,812
NOTES TO THE FINANCIAL STATEMENTS
year ended 31 December 2016 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
63
9. Tax continued
The following is the deferred tax asset recognised by the Group and movements thereon during the current and 
prior reporting period. 
Depreciation in excess 
of capital allowances
$’000s
As at 1 January 2015 784
Credit to income 2,812
As at 31 December 2015 3,596
Credit to income 599
As at 31 December 2016 4,195
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, in addition to losses generated prior to Pioneer, are available for carry forward 
to offset taxable profits arising in future periods, however this is subject to agreement of the quantum of losses with 
the Nigerian tax authorities. There is no time restriction in the utilisation of these losses.
Elcrest Exploration and Production Nigeria Limited (“Elcrest”) was granted Pioneer status in 2014 and thus 
benefits from this three year tax relief period, with two further one year extension periods available on successful 
application. The initial 3 year period expired in May 2017, and Elcrest has recently requested re-confirmation of 
the additional two years of Pioneer being available, although at the date of this report we still await confirmation 
to our request. We still believe there is a strong likelihood the application will be successful. Even in the event the 
application is unsuccessful Elcrest has significant taxable losses available to offset against future taxable profits.
As at 31 December 2016, the Group has taxable losses of $271,400,000 (2015: $194,119,000) for which no 
deferred tax asset has been recognised as there is not sufficient certainty at this time regarding the utilisation 
of these losses. In particular, Elcrest accounts for the majority of these tax losses totalling $244,900,000 (2015: 
$176,800,000). On expiry of Pioneer tax status, and following the full utilisation of available tax losses (which have 
no time restriction) and $188,200,000 of capital allowances, 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 $4,195,000 as at 31 December 2016 (2015: $3,596,000) 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. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
64
Strategic Report Governance Financial Statements Other information
10. Earnings per share
Earnings per share (‘EPS’) is the amount of post-tax profit attributable to each share.
Diluted EPS takes into account the dilutive effect of share option plans being exercised.
From continuing operations
The calculation of the basic and diluted earnings per share is based on the following data:
Earnings
2016
$000’s
2015
$000’s
Earnings for the purpose of the basic earnings per share being net profit attributable  
to owners of the Company
16,881 20,404
Earnings for the purposes of basic and diluted earnings per share 16,881 20,404
Number of shares
2016
000’s
2015
000’s
Weighted average number of Ordinary Shares for the purposes of basic earnings  
per share
180,540 155,263
Equity options 1,830 –
Weighted average number of Ordinary Shares used in the calculation of diluted  
earnings per share
182,370 155,263
From continuing operations
Year 
ended
2016
$
Year 
ended
2015
$
Basic 0.09 0.13
Diluted 0.09 0.13
 
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 dilutive potential ordinary shares. The Company only has one class of ordinary share which have 
the potential to be dilutive, being the share options issued to employees and Directors (see note 30 for details).  
At the end of 2016 only the share options issued in January 2016 totalling 1,830,000 shares are considered dilutive. 
However, this has no material impact on the EPS between basis and diluted EPS noted above. 
Shares issued in 2016 are detailed in note 21.
NOTES TO THE FINANCIAL STATEMENTS
year ended 31 December 2016 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
65
11. Intangible oil and gas assets
Group
Exploration 
and 
evaluation 
assets
$000’s
Other 
intangible 
assets
$000’s
Total 
$000’s
Cost
At 1 January 2015 7,950 3,929 11,879
Additions 886 – 886
Effect of changes to decommissioning estimates (note 20) 216 – 216
At 31 December 2015 9,052 3,929 12,981
Additions 2,648 – 2,648
At 31 December 2016 11,700 3,929 15,629
Amortisation
At 1 January 2015 – (525) (525)
Charge for the year – (1,404) (1,404)
At 31 December 2015 – (1,929) (1,929)
Charge for the year – (1,500) (1,500)
At 31 December 2016 – (3,429) (3,429)
Carrying amount
Balance at 1 January 2015 7,950 3,404 11,354
Balance at 31 December 2015 9,052 2,000 11,052
Balance at 31 December 2016 11,700 500 12,200
The Group’s oil & gas exploration and evaluation assets at 31 December 2016 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. A production bonus of $3,000,000 may become payable in the future. Further 
details are disclosed in note 33.
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. The above exploration and evaluation balance includes 100% of 
the initial work programme, together with interest charged to All Grace as detailed in note 8.
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 minimum expected tax relief period of three years.  
The charge for the year has been included within operating expenses in the income statement for the year ended 
31 December 2016 $1,500,000 (2015: $1,404,000). Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
66
Strategic Report Governance Financial Statements Other information
12. Property, plant and equipment
Group Note
Fixtures and
equipment
$000’s
Motor vehicles
$000’s
Oil and gas
 development
assets
$000’s
Total
$000’s
Cost
At 1 January 2015 898 95 188,794 189,787
Additions 651 90 2,364 3,105
Disposals – – (2,977) (2,977)
At 31 December 2015 1,549 185 188,181 189,915
Additions 25 7,715 7,740
At 31 December 2016 1,574 185 195,896 197,655
Accumulated depreciation
At 1 January 2015 (389) (91) (1,193) (1,673)
Charge for the year (358) (23) (4,276) (4,657)
Elimination on disposal – – – –
At 31 December 2015 (747) (114) (5,469) (6,330)
Charge for the year (382) (27) (911) (1,320)
At 31 December 2016 (1,129) (141) (6,380) (7,650)
Carrying amount
At 31 December 2016 445 44 189,516 190,005
At 31 December 2015 802 71 182,712 183,585
The Group’s oil and gas development and production assets at 31 December 2016 and 31 December 2015 relate 
to the Group’s interest in OML 40 in Nigeria. In respect to the oil and gas development and production assets 
the Group has recognised a depletion, depreciation and amortisation charge for the year of $911,000 (2015: 
$4,276,000).
In prior periods, the Group has paid amounts totalling $2.1 million, on behalf of the OML 40 joint operation, as part 
of the continuing development of the assets which are included within PP&E. The Group is seeking reimbursement 
for these amounts, but the timing of recovery is uncertain and as such no debtor has been recognised.
NOTES TO THE FINANCIAL STATEMENTS
year ended 31 December 2016 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
67
12. Property, plant and equipment continued
The Company – Fixtures and equipment
Total
$000’s
Cost
At 1 January 2015 553
Additions 442
Disposals –
At 31 December 2015 995
Additions 6
At 31 December 2016 1,001
Accumulated depreciation
At 1 January 2015 (196)
Charge for the year (234)
At 31 December 2015 (430)
Charge for the year (237)
At 31 December 2016 (667)
Carrying amount
At 31 December 2016 334
At 31 December 2015 565
13.  Investments in Group undertakings
Company
$000’s
Cost and net book value at 1 January 2015 181,414
Additions 7,836
At 1 January 2016 189,250
Additions 2,665
At 31 December 2016 191,915
The additions in the year relate to the Company’s investment in Westport Oil Limited being subscription for shares 
in cash.  Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
68
Strategic Report Governance Financial Statements Other information
13.  Investments in Group undertakings continued
The Group’s 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
1
Oil and Gas Exploration  
and Production
Nigeria 100% 100%
Elcrest Exploration and Production Nigeria Limited
1
Oil and Gas Exploration 
and Production
Nigeria 45% 45%
Wester Ord Oil & Gas (Nigeria) Limited
1
Oil and Gas Exploration 
and Production
Nigeria 100% 100%
Westport Oil Limited
2
Financing Jersey 100% 100%
Tarland Oil Holdings Limited
2
Holding Company Jersey 100% 100%
Wester Ord Oil and Gas Limited
2
Holding Company Jersey 100% 100%
Registered addresses for the above listed subsidiaries are as follows:
1
   Plot 1384 Tiamiyu Savage Street, Victoria Island, Lagos, Nigeria
2  
2nd Floor, The Le Gallais Building, 54 Bath Street,  St Helier, Jersey JE1 1FW 
In accordance with the Group’s accounting policy on page 52, Elcrest Exploration and Production Nigeria Limited 
has been consolidated because it is controlled by the Company. The Company has the power to govern the 
financial and operating policies 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.
14. Inventory
Group
2016
$000’s
Group
2015
$000’s
Spare parts 353 353
353 353
 
Inventory relates to equipment which will be used in future drilling campaigns.
15. Trade and other receivables
Group 
2016
$000’s
Company
2016
$000’s
Group 
2015
$000’s
Company
2015
$000’s
Trade receivables 28 – 1,719 –
Amounts due from Group undertakings (note 32) – 57,830 – 48,530
Other receivables 353 77 2,314 78
Prepayments 832 316 973 403
1,213 58,223 5,006 49,011
The Directors consider that the carrying value of trade and other receivables is approximately equal to their fair value.
NOTES TO THE FINANCIAL STATEMENTS
year ended 31 December 2016 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
69
16. Cash and cash equivalents
Group 
2016
$000’s
Company
2016
$000’s
Group 
2015
$000’s
Company
2015
$000’s
Unrestricted cash in bank accounts 7,158 5,456 7,430 753
Restricted cash 3,986 – 1,031 –
11,144 5,456 8,461 753
 
Under the terms of the reserve based lending facility (“RBL”), the group is required to set aside amounts to cover 
the servicing of the debt and stamp duty costs in restricted cash accounts. The restricted amount increased during 
2016 pending the outcome of the re-determination process and the return to production, which determines the 
size of facility available to the Group. The facility underwent a redetermination in early 2017, with the borrowing 
base amount confirmed at $23,900,000 and the $3,500,000 reserve requirement released. See further details in 
account note 19.
17. Trade and other payables
Group 
2016
$000’s
Company
2016
$000’s
Group 
2015
$000’s
Company
2015
$000’s
Trade payables 1,074 140 193 197
Amounts due to group undertakings (note 32) – 904 – 903
Accruals 13,538 2,455 12,886 1,875
Joint venture creditor 1,935 – 5,263 –
Overlift 2,067 – 693 –
Other payables 4,542 283 1,800 382
23,156 3,782 20,835 3,357
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 or Nigerian Naira.
The accruals balance includes estimates due under the OML 40 Joint Operating Agreement (“JOA”) which are 
either not yet invoiced or agreed with our partner on the licence. The joint venture creditor includes amounts which 
have been billed and agreed upon. See note 33 for further details. 
Other payables relates principally to amounts due to our Forcados offtake partner, Shell Western Supply and 
Trading Limited, in respect of a prepayment made to the Company in 2016 of $3,000,000 outstanding at year-end. 
The remaining balance within other payables relates to employment taxes, VAT and withholding tax liabilities.
The Company has financial risk management policies in place to ensure that all payables to third parties are paid 
within the credit timeframe and no interest has been charged by any suppliers as a result of late payment of 
invoices during the period. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
70
Strategic Report Governance Financial Statements Other information
18. Other payable – shareholder management fee
Group
2016
$000’s
Company
2016
$000’s
Group
2015
$000’s
Company
2015
$000’s
At 1 January – – 2,250 –
Movement in the year 17,250 – – –
Release of provision – – (2,250) –
At 31 December 17,250 – – –
The Group has provided for an amount due from Elcrest to its indigenous shareholder in Nigeria, for a liability due 
under a shareholders’ agreement signed in March 2011. The management fees payable under the agreement are 
$3 million per annum. Due to the fact the fees had never been invoiced from commencement of the agreement and 
Eland had understood that Elcrest’s local shareholder would not exercise its ability to levy these charges, the Group 
was of the opinion that cash outflows were remote at 2015 year-end and therefore released the provision.
However, following recent communications and commercial discussions with the shareholder, Elcrest has fully 
provided for the maximum liability under the agreement at the year-end. See note 34 for post-balance sheet 
events, as noted the above balance has subsequently been invoiced in 2017. The timing of the cash outflows has 
not yet been agreed.
19. Borrowings
Reserves based lending facility:
2016
$000’s
2015
$000’s
Reserve based facility agreement with maturity date 30 June 2019:
Amount used 15,000 15,000
Amount unused 10,400 10,400
 25,400 25,400
The reserves based lending facility with Standard Chartered Bank (SCB), which Westport (the Group’s finance 
vehicle) entered into on 31 December 2014 (the “RBL”) 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 RBL, to which SCB has committed an initial $35 million, has a maturity of four and a half years from  
31 December 2014 and is repayable as set out in note 31 on page 80. Interest is payable on amounts outstanding  
on a quarterly basis at a rate equivalent to USD LIBOR plus a margin of 7.75%.
The amount available under the RBL is subject to a cap determined by the lower of the borrowing base amount 
and the committed facility amount. The borrowing base amount is calculated on OML 40 production and is  
re-determined every six months in accordance with the terms of the RBL.
As at 31 December 2016 the most recently concluded borrowing base review was calculated at $25.4 million. 
During 2016 both Eland and SCB agreed to defer the June 2016 review until after production had recommenced in 
2017. As part of the deferral agreement Eland increased the restricted cash held as detailed in note 16, which stood 
at $3,986,000 at year end. The most recent re-determination was concluded in April 2017, where the borrowing 
base was agreed at $23.9 million and the restricted cash was reduced to $1,106,000 with the balance released to 
unrestricted accounts.
The RBL 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 RBL facility includes certain financial covenants on which the group has submitted compliance documents 
showing that it has met these requirements at all times throughout the term of the loan. However, as disclosed in 
note 2 these submissions are subject to agreement by the lender on the treatment of certain items.
NOTES TO THE FINANCIAL STATEMENTS
year ended 31 December 2016 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
71
19. Borrowings continued
The amount used under the RBL is reconciled to the carrying amount of the loan as at the Balance Sheet date  
as follows:
$000’s
Balance as at 1 January 2015 –
Amount used 15,000
Arrangement fees and costs offset (1,778)
Interest charged 1,431
Interest and fees paid (1,286)
Balance as at 31 December 2015 13,367
Arrangement fees and costs amortised in period (436)
Interest charged 2,366
Interest and fees paid (1,963)
Balance as at 31 December 2016 13,334
 
20. Decommissioning Provision
2016
$000’s
2015
$000’s
At 1 January   9,809 12,306
Unwinding of discount (note 8) 311 264
Additions (note 12) – 216
Effect of changes to decommissioning estimates (note 11) – (2,978)
At 31 December 10,120 9,809
 
The provision for decommissioning is in respect of the Group’s interest in OML 40 and Ubima. The provision 
represents the present value of amounts that are expected to be incurred in 2026 and 2034 for OML40 and Ubima 
respectively, discounted to the present value using a 2.75% discount rate (2015: 2.75%) and an inflation rate of 2% 
(2015: 2%).
A corresponding amount equivalent to the provision is recognised as part of the cost of the related intangible 
assets and property, plant and equipment for the Ubima and OML 40 licence respectively. 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 (see 
note 8).
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. Management believes the estimates continue to form 
a reasonable basis for the expected future costs of decommissioning, which are now expected to be incurred 
in 2026. Furthermore, an independent specialist carried out a further validation in 2015 of the assumptions and 
data contained within the 2013 report and confirmed there was no material change to the position. An updated 
decommissioning review is likely to be undertaken during 2017. The effect in future periods is impractical to 
calculate, as the provision in future periods may be affected by the drilling of future wells, and changes to inflation 
or discounting assumptions. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
72
Strategic Report Governance Financial Statements Other information
21. Share capital 
The Authorised share capital of the Company at 31 December 2016 was 175,000,000 ordinary shares of £0.10 each 
and 175,000,000 deferred shares of £0.90 each.
2016
$000’s
2015
$000’s
Authorised:
10,000,000 non-voting ordinary shares of £0.10 each 1,625 1,625
165,000,000 ordinary shares of £0.10 each 26,821 26,821
175,000,000 deferred shares of £0.90 each 256,017 256,017
Allotted, issued and paid:
186,319,340 (2015: 145,263,214) voting ordinary shares of £0.10 each 29,138 23,139
6,296,815 (2015: 10,000,000) non-voting ordinary shares of £0.10 each 1,124 1,665
155,263,214 deferred non-voting shares of £0.90 each 223,235 223,235
253,497 248,039
Allotted, issued and paid ordinary shares
Voting £0.10 
ordinary shares
Non-voting £0.10 
ordinary shares
Total £0.10 
ordinary shares
At 1 January 2015 and 2016 145,263,214 10,000,000 155,263,214
Conversion of non-voting to voting 4,613,685 (4,613,685) –
Issued and fully paid on equity placing 36,442,441 910,500 37,352,941
As at 31 December 2016 186,319,340 6,296,815 192,616,155
A Share Capital re-organisation was approved at the June 2015 AGM to subdivide the £1 nominal shares into voting 
ordinary shares and deferred shares.
The effect of the re-organisation was to decrease the nominal value of the voting ordinary shares of £1 to £0.10 
each. The creation of a class of deferred shares of £0.90 each is to ensure that the re-organisation does not result 
in an unlawful reduction of capital in the company.
The deferred shares do not entitle holders to receive notice of or attend and vote at any general meeting of the 
company or to receive a dividend or other distribution or to participate in any return on capital on a winding up or 
other than the nominal amount paid on such shares following a substantial distribution to the holders of ordinary 
shares in the company. As such the deferred shares do not form part of the calculation of earnings per share.
Each new voting ordinary share has the same rights and benefits as the existing voting ordinary shares.
During the year, the company issued 36,442,441 new ordinary shares and 910,500 new non-voting ordinary shares 
pursuant to the share placing announced on 29 April 2016. The company raised approximately $18,600,000 (gross) 
through the placing at 34 pence per share (representing a premium to the closing mid-market price on 28 April 
2016). Of the net proceeds received $5,458,000 has been recorded in share capital, $13,099,000 in share premium 
with expenses of $647,000 also included in share premium. 
In addition to the placing, on 23 February 2016 as a shareholder, Helios Natural Resources (“Helios”) requested the 
conversion of 4,613,685 of non-voting shares into voting shares. Following both this conversion and subsequent 
placing, as at 31 December 2016, Helios held 6,296,815 of non-voting shares, which are convertible to ordinary 
shares at no additional price following a future increase in ordinary shares.
NOTES TO THE FINANCIAL STATEMENTS
year ended 31 December 2016 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
73
22. Share premium
Company
Share 
premium
$000’s
Balance at 1 January and 31 December 2015 –
Issue of shares at a premium 13,099
Expenses related to issue of equity shares (647)
Balance at 31 December 2016 12,452
 
As described in note 21, a total of 37,352,941 new ordinary shares were issued in April 2016 consisting of 36,442,441 
voting and 910,500 non-voting shares. The difference between the placing price of 34 pence per share and the 
share capital of 10 pence per share has been recorded in share premium at a rate of GBP:USD 1:1.46. Further, share 
premium expenses for broker and professional fees totalling $647,000 were recorded against the share premium 
account.
23. Other reserve
Group and Company
Other Reserve
$000’s
Balance as at 1 January 2015 (15,542)
Cancellation of Forward purchase arrangement over the shares of a subsidiary 5,000
Balance as at 31 December 2015 and 2016 (10,542)
 
This reserve relates to costs incurred on funds raised on AIM in 2012.
In the prior year, a forward purchase arrangement for $5,000,000 which related 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 was cancelled. Management received legal opinion that, since the 
timeline for the acquisition had expired and both parties failed to exercise any rights, the forward purchase 
agreement was null and void.
24. Retained earnings/(losses)
Group
$000’s
Company
$000’s
Balance at 1 January 2015 8,470 904
Profit/(loss) for the year 20,404 (4,062)
Credit to equity-settled share-based payments 812 812
Other adjustments (274) –
Balance as at 1 January 2016 29,412 (2,346)
Profit/(loss) for the year 16,881 (1,696)
Credit to equity-settled share-based payments 136 136
Balance as at 31 December 2016 46,429 (3,906) Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
74
Strategic Report Governance Financial Statements Other information
25.  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) into 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
$000’s
Company
$000’s
Balance at 31 December 2015 and 31 December 2016 1,429 1,071
26. Non-controlling interests
Summarised financial information in respect of each of the Group’s subsidiaries that has a material non-controlling 
interest is set out below.
The summarised financial information below represents amounts before intragroup eliminations.
Elcrest Exploration and Production Nigeria Limited
Balance Sheet
2016
$'000s
2015
$'000s
Non-current assets 194,264 188,388 
Current assets 2,475 7,847
Current liabilities (455,126) (368,939)
Non-current liabilities (9,892) (9,587)
Net liabilities (268,279) (182,291)
Equity attributable to owners of the company (120,690) (81,995)
Non-controlling interest (147,589) (100,296)
Total equity (268,279) (182,291)
Income Statement
2016
$'000s
2015
$'000s
Revenue 2,373 18,108
Expenses (88,361) (67,502)
Loss for the year (85,988) (49,394)
Total loss and comprehensive loss attributable to owners of the Company (38,695) (22,228)
Total loss and comprehensive loss attributable to the non-controlling interests (47,293) (27,166)
Cashflow
2016
$'000s
2015
$'000s
Net cash inflow/(outflow) from operating activities 800 (11,044)
Net cash outflow from investing activities (5,275) (3,945)
Net cash inflow from financing activities 2,734 15,255
Net cash (outflow)/inflow (1,741) 266
NOTES TO THE FINANCIAL STATEMENTS
year ended 31 December 2016 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
75
27. Notes to the cash flow statement
Group
2016
$000’s
2015
$000’s
Loss for the year before tax (31,442) (9,574)
Adjustments for:
Increase/(decrease) in management fee (note 18) 17,250 (2,250)
Share-based payments (note 30) 136 812
Net finance costs (note 8) 2,536 3,309
Amortisation of intangible assets (note 11) 1,500 1,404
Depreciation of property, plant and equipment (note 12) 1,320 4,657
Unrealised foreign exchange losses on operating activities 817 38
Other adjustments – (274)
Non-cash movement loan liability – (145)
23,559 7,551
Operating cash flows before movements in working capital (7,883) (2,023)
Increase/(decrease) in trade and other operating payables 570 (966)
Decrease/(Increase) in trade and other operating receivables 2,256 (576)
2,826 (1,542)
Net cash used in operating activities (5,057) (3,565)
Company
2016
$000’s
2015
$000’s
Loss for the year before tax (2,126) (4,061)
Adjustments for:
Depreciation of property, plant and equipment (note 12) 237 234
Net finance (income) (3,561) (2,306)
Share-based payments (note 30) 137 812
Unrealised foreign exchange losses on operating activities 1,794 39
(1,393) (1,221)
Operating cash flows before movements in working capital (3,519) (5,282)
Increase/(decrease) in trade and other operating payables 426 (480)
Decrease/(Increase) in trade and other operating receivables (5,528) 4,386
(5,102) 3,906
Net cash used in operating activities (8,621) (1,376) Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
76
Strategic Report Governance Financial Statements Other information
28. 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 and loss in the consolidated financial statements.
29. Operating lease arrangements
Group
2016
$000’s
Company
2016
$000’s
Group
2015
$000’s
Company
2015
$000’s
Minimum lease payments under operating leases recognised  
as an expense in the year
645 345 940 362
 
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
2016
$000’s
2015
$000’s
Within one year 202 312
In the second to fifth years inclusive 576 1,038
After five years 276 503
1,054 1,853
 
Operating lease payments represent rentals payable by the Group for certain of its office properties and staff 
residences.
30. 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 were granted to employees at £1.16 each. 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 grant price. Management has 
determined a 70% probability of this condition being satisfied. All of the share options, except for Founder Options 
which had a vesting period of two years, have a vesting period of three years from the date of grant. The £1.00 
Founder options are exercisable for a period of eight years (less one day) from the second anniversary of the date 
of the grant. The other options are exercisable for a period of seven years (less one day) from the third anniversary 
of the date of the grant. If the options remain unexercised after the day preceding the tenth anniversary of the date 
of the grant the options expire. 
 
On 8 January 2016 the Company offered employees (including directors) the chance to waive the 150% hurdle 
rate performance condition associated with their current holding. If the employee accepted the offer, they would 
relinquish their rights to 25% of their options. Several employees accepted the offer and as a result the number of 
share options decreased by 1,906,712 during the year.
NOTES TO THE FINANCIAL STATEMENTS
year ended 31 December 2016 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
77
30. Share-based payments continued
On 31 January 2016 share options were granted to certain employees of the Group comprising of 1,830,000 options 
exercisable at £0.285 each. There were no performance conditions associated with the options. 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 ten years from the date of grant, is 
equal to or greater than one hundred percent (100%) of the Placing Price. The share options, have a vesting period 
of three years from the date of grant and 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 the grant the options expire.
During the year personnel left the Company and as a result 5,517,813 share options lapsed. 
 
Details of the share options outstanding during the year are as follows:
2016 2015
Number of 
share options
Weighted
 Average 
Exercise 
Price (£)
Number of 
share options
Weighted
 Average 
Exercise 
Price (£)
Outstanding at the start of the year 12,563,263 1.02 12,563,263 1.02
Hurdle rate reduction (1,906,712) (1.02) – –
Lapsed (5,517,813) (1.00) – –
Granted during the year 1,830,000 0.29 – –
Outstanding at the end of the year 6,968,738 0.85 12,563,263 1.02
Exercisable at the end of the year 4,813,738 1.01 11,248,263 1.00
The options outstanding at 31 December 2016 had a weighted average exercise price of £0.85, and a weighted 
average remaining contractual life of 6 years and 6 months. The aggregate of the estimated fair values of the options 
granted in 2016 was £61,000 (2015: £nil). The inputs into the Black-Scholes model during 2016 were as follows:
Year-end closing share price 40.25p
Weighted-average exercise price 29p
Expected volatility 13.25%
Expected life 3 years
Risk-free rate 1.73%
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 the share options were issued. 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 
behavioral considerations.
The Group recognised total expenses of $136,000 (2015:$812,000) related to equity settled share-based payment 
transactions in 2016. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
78
Strategic Report Governance Financial Statements Other information
31. 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 2015.
The capital structure of the Group includes debt drawn down from the RBL of $15 million as at 31 December 2016. 
Equity attributable to equity holders of the parent comprises issued capital, share premium, reserves and retained 
earnings as disclosed in notes 21 to 25.
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 2016 and 2015, the Group and Company held the following financial assets:
Group
2016
$000’s
Company
2016
$000’s
Group
2015
$000’s
Company
2015
$000’s
Trade and other receivables (note 15) 304 57,830 4,075 48,530
Cash and bank balances 11,144 5,456 8,461 753
11,874 63,712 12,536 49,283
 
Of the cash balances of $11.1 million (2015: $8.5 million), $5.5 million (2015: $7.2 million) was denominated in  
US Dollars, $5.4 million (2015: $0.6 million) was denominated in Sterling and $0.2 million (2015: $0.7 million) was 
denominated in Naira.
NOTES TO THE FINANCIAL STATEMENTS
year ended 31 December 2016 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
79
31. Financial instruments continued
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 2016, the Group and Company held the following financial liabilities at amortised cost:
Group
2016
$000’s
Company
2016
$000’s
Group
2015
$000’s
Company
2015
$000’s
Trade payables 1,074 140 193 197
Amounts due to group undertakings – 904 – 903
Accruals 13,538 2,455 12,886 1,875
Joint venture creditor 1,935 – 5,263 –
Other payables 3,168 172 209 231
Shareholder management fee 17,250 – – –
Bank loans 13,334 – 13,367 –
50,299 3,671 31,918 3,206
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.
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. 
A reasonably possible exchange rate variance based on historical volatility and the impact on the financial 
statements are presented below.
If the US Dollar had strengthened by 10% against Sterling, with all other variables held constant, post tax loss for 
the year would have been $611,000 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, post tax loss for the 
year would have been $747,000 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, post tax loss for the 
year would have been $1,107,000 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, post tax loss for the 
year would have been $1,353,000 higher as a result of translating Naira denominated expenditure at lower rates 
of exchange. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
80
Strategic Report Governance Financial Statements Other information
31. Financial instruments continued
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 cash 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 reduce liquidity risk are set out in note 19.
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 assets as at 31 December 2016 are receivable within one year. On this 
basis, no maturity analysis has been disclosed.
All of the Company’s financial liabilities are payable within one year with the exception of the RBL. The following 
table as at 31 December 2016, for the years 2017 through 2021 and thereafter, shows the maturities of the Group’s 
undiscounted financial liabilities inclusive of any interest and fees associated with the RBL:
2017
$000s
2018
$000s
2019
$000s
2020
$000s
2021
$000s
Thereafter
$000s
Total
$000s
RBL interest 1,308 895 162 – – – 2,365
RBL commitment fees 74 – – – – – 74
Other fees (RBL) 150 150 75 – – – 375
Principal repayment 184 12,051 2,949 – – – 15,000
Trade and other payables 23,156 – – – – – 23,156
24,872 9,511 6,587 – – – 40,970
 
The table above excludes amounts due to Elcrest’s shareholder of $17.25 million as no payment plan has yet been 
agreed.
Under the terms of the RBL amounts repayable are first to be held in restricted accounts for principal and interest 
due six months prior to the repayment dates.
In comparison the following table as at 31 December 2015, for the years 2016 through 2020 and thereafter, shows 
the maturities of the Group’s undiscounted financial liabilities inclusive of any interest and fees associated with the 
RBL (all of the Company’s financial liabilities were payable within one year):
2016
$000s
2017
$000s
2018
$000s
2019
$000s
2020
$000s
Thereafter
$000s
Total
$000s
RBL interest 1,245 1,233 844 153 – – 3,475
RBL commitment fees 260 74 – – – – 334
Other fees (RBL) 150 150 150 75 – – 525
Principal repayment – 184 8,466 6,350 – – 15,000
Trade and other payables 20,835 – – – – – 20,835
22,490 1,641 9,460 6,578 – – 40,169
Financial facilities
Loan facility
The Group has a loan facility with Standard Chartered Bank. Details are given in note 19.
NOTES TO THE FINANCIAL STATEMENTS
year ended 31 December 2016 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
81
31. Financial instruments continued
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. Based on existing borrowings of $15 million and a reasonably possible interest rate 
variance at 31 December 2016, a 0.5 percentage point change in average interest rates over a twelve month period 
would increase or decrease net income or loss by approximately $75,000.
32. Related Party Transactions
Group and Company
Loans to related parties
2016
$000’s
2015
$000’s
Loans from Eland Oil & Gas PLC to Eland Oil & Gas (Nigeria) Limited 15,319 12,504
Loans to Eland Oil & Gas (Nigeria) Limited are short term and carry interest of 5% per annum. 
Other transactions between the Company and Group undertakings
Eland 
Oil & Gas 
(Nigeria) 
Limited
$000’s
Elcrest
$000’s
Wester Ord 
Oil & Gas Ltd
$000’s
Wester Ord 
Oil & Gas 
(Nigeria) Ltd
$000’s
Westport
$000’s
Tarland
Oil and Gas
Ltd
$000’s 
Total
$’000’s
Balance at 1 January 2015 8,957 30,733 16 424 137 – 40,267
Transactions during the year ended 
31 December 2015:
Management fees – 3,000 – – – – 3,000
Costs recharged 2,745 3,744 (5) 358 831 16 7,689
Interest on loans to related parties 504 – – – – – 504
Reimbursement of costs recharged (8,653) (5,579) – – (754) – (14,986)
Exchange differences (1) 1 – 1 – – 1
Balance at 31 December 2015 3,552 31,899 11 783 214 16 36,475
Transactions during the year ended 
31 December 2016:
Management fees – 3,000 – – – – 3,000
Costs recharged 732 3,660 23 781 2,698 25 7,919
Interest on loans to related parties 679 – – – – – 679
Reimbursement of costs recharged (2,386) (3,176) – – – – (5,562)
Balance at 31 December 2016 2,577 35,383 34 1,564 2,912 41 42,511
 
In addition the Company also has a payable balance of $904,000 (2015: $903,000) due to Eland Oil & Gas 
(Nigeria) Limited. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
82
Strategic Report Governance Financial Statements Other information
32. Related Party Transactions continued
Trading transactions
Purchase of 
services
2016
$000’s
Purchase of 
services
2015
$000’s
Henderson Global Investors 62 9
 
Henderson Global Investors is a related party of the Group because it is a substantial shareholder of Eland Oil & 
Gas plc.
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.
2016
$000’s
2015
$000’s
Short term employee benefits 1,056 1,472
Post-employment benefits 79 106
Share-based payments 39 390
1,174 1,968
 
Further details about the remuneration of individual directors is provided in the Directors’ Remuneration Report on 
pages 38 to 41.
33. Contingent liabilities
JOA accruals
As discussed in note 3, under 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 work programme and budget. From time to time, 
management disputes such expenditures on the basis that they do not meet these criteria, and when this occurs 
management accrues at the period end for its best estimate of the amounts payable to the operator. Consequently, 
the amounts recognised as accruals as at 31 December 2016 reflect 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. However, management recognise there are a range of possible outcomes, which may be higher or lower 
than the management estimate of accrued expenditure. To the extent additional amounts have been claimed by 
the operator it is estimated that around $6,300,000 remains under dispute and management consider any liability 
in this respect to be remote.
Wester Ord production bonus
As discussed in note 3, the Group’s subsidiary Wester Ord Oil & Gas (Nigeria) Limited may become, subject to 
certain conditions, ultimately 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 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, but do not consider payment of the amount to be probable.
NOTES TO THE FINANCIAL STATEMENTS
year ended 31 December 2016 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
83
FORWARD-LOOKING STATEMENTS
Cautionary statement regarding forward-looking statements
This Annual Report may contain 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”, “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.
34. Post-balance sheet events
Recommencement of production
Forcados, the main export terminal for OML 40 continued to be unavailable in the early part of 2017. As a result 
of the prolonged delay with Forcados, a decision was made to implement a shipping solution whereby crude is 
exported from the Opuama field to a storage vessel moored at the Benin River, in the Niger Delta. On 29 January 
2017 production recommenced, with gross volumes of c.10,500 barrels of oil produced over the initial 24-hour 
period before stabilising at around 8,500 bopd. The first shuttle vessel arrived on location shortly after with the 
first delivery to the Trinity Spirit FPSO mid-February followed by cash receipt for the oil sale shortly thereafter. 
The shipping solution involving one storage vessel and two shuttle vessels has continued throughout 2017 until the 
recent opening of Forcados with regular deliveries being made to the Trinity Spirit FPSO. In total revenue of around 
$25,000,000 has been earned during shipping operations with around $17,000,000 of cash receipts collected and 
amounts owing to vendors around $6,000,000 at the date of this report. The establishment of this solution has 
demonstrated this as a viable alternative export route in the absence of Forcados availability.
On 24 May 2017 the Forcados export terminal was re-opened and consequently shipping operations were 
terminated and production re-instated through the Forcados export pipeline. Initial production rates have been 
approaching 12,000 bopd from two wells, Opuama-1 and Opuama-3.
Borrowing base re-determination
The re-determination of the Group’s Reserve Based Lending facility which was due to be undertaken in Q1 2017 
was completed in April 2017 and has resulted in a confirmed borrowing base amount of $23.9 million (previously 
$25.4 million). The redetermination was based on the production performance of Opuama-1 and Opuama-3, 
shipping export route and outlook. As a result of the re-determination, the restricted cash of the Group (cash which 
is held in restricted bank accounts to service the debt and pay stamp duty costs), was reduced from $3,986,000 to 
$1,106,000, with the balance being released to the Group’s unrestricted accounts.
Shareholder management fee (note 18)
Subsequent to year end, Elcrest received a fee invoice for such liability from its local shareholder. This fee related 
to management charges agreed at the onset of the joint venture of $3m per annum for each shareholder, which 
by the end of 2016 totalled $17.25 million per shareholder. In prior periods Eland had understood that Elcrest’s 
local shareholder would not exercise its ability to levy these charges. Eland has now also formally invoiced the 
corresponding amounts. The payment profile for settlement of these liabilities is yet to be agreed, but it is intended 
this will be settled from free cash generated from increasing OML 40 production. To date, $1 million has been 
settled in 2017. Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
84
Strategic Report Governance Financial Statements Other information
SHAREHOLDER INFORMATION
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  
Lagos
Plot 1384, Tiamiyu Savage Street 
Victoria Island 
Lagos
Tel: +234 1 6310920
info@elandoilandgas.com
www.elandoilandgas.com Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
85
DIRECTORS AND ADVISERS
Directors
George Walter Mitchell Maxwell, Chief Executive Officer
Olivier Serra, Chief Financial Officer 
Russell Harvey, Non-Executive Chairman
Henry Obi, Non-Executive Director 
Henry Turcan, Non-Executive Director
Gregory Stoupnitzky, 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
Mayer Brown International
201 Bishopsgate
London EC2M 3AF
Stephenson Harwood 
1 Finsbury Circus 
London EC2M 7SH
United Kingdom
Bracewell & Giuliani (UK) LLP
Tower 42
25 Old Broad Street
London EC2N 1HQ 
United Kingdom
Streamsowers & Köhn 
16D, Akin Olugbade Street 
Victoria Island
Lagos
Nigeria
Independent Auditor 
Deloitte LLP
2 New Street Square
London EC4A 3BZ
United Kingdom Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
86
Strategic Report Governance Financial Statements Other information
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
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 Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
87
IFRS International Financial Reporting Standard(s)
JOA Joint Operating Agreement
km Kilometres
km2 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 17 Oil Mining Lease 17 which contains the Ubima Marginal Field
OML 40 Oil Mining Lease 40
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
GLOSSARY continued Eland Oil & Gas PLC  
Annual Report and Financial Statements 2016
88
Strategic Report Governance Financial Statements Other information
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 Communiqué Associates Limited, Edinburgh www.communique-associates.co.uk
2016 OPERATIONAL HIGHLIGHTS
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.
UBIMA FIELD CPR PUBLISHED APRIL 2016
2.4
***
mmbbl (gross) 2P Reserves
31.1
***
mmbbl (gross) 2C Resources
* Initial Opuama-3 daily flow rate, April 2016 which stabilised at 8,500 bopd in 2017.
**  Source: Independent Report by Netherland Sewell & Associates Inc. June 2015.
***  Source: Independent Report by AGR TRACS April 2016.
****  Source: Independent Report by Netherland Sewell & Associates Inc. April 2016 and April 2017.
$2m
Cost of  
Opuama-3 workover
10,500
*
bopd (gross)
Opuama-3 flow-rate
83.2
**
mmbbl (gross) 2P Reserves
Opuama and  
Gbetiokun Fields
41.2
**
/
****
mmbbl (gross) 2C Resources
OML 40
OML 40 IN NIGERIA IS ELAND’S CORE ASSET Annual Report and
Financial Statements
2016
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 2016