The one stop source for breaking news, expert analysis, and podcasts on fast-moving AIM and LSE listed shares

Join ShareProphets at less than 2p per article

> All the big AIM fraud exposés

> 300 articles and podcasts a month

> Hot share tips

> Original investigations by our experienced team

> No ads, no click-bait, no auto-play videos

Find out more

Exclusive interview with Matt Lofgran and his foray in Bénin with Elephant Oil

By Ben Turney | Monday 17 August 2015

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Elephant Oil is a privately held oil exploration company, whose managing director is Matt Lofgran of AIM-listed Nostra Terra Oil & Gas (NTOG). Elephant Oil secured the Block B onshore coastal exploration licence in Bénin, West Africa, in October 2013. It counts Red Rock Resources (RRR) and Paternoster Resources (PRS) among its cornerstone investors and could be one to watch over the coming years, as it attempts to open up a new oil producing province.  

Hello Matt, thank you for joining me. You are CEO of Nostra Terra Oil & Gas (NTOG) and Managing Director of Elephant Oil, a privately-held oil exploration company with a focus on Sub-Saharan Africa, where its initial asset is in Bénin. Elephant Oil has secured investment from two AIM listed companies, Red Rock Resources (RRR) and Paternoster Resources (PRS), the latter of which you are also a director. To begin with could you please tell us a bit about your decision to found an exploration company in West Africa.

Yes and thank you for having me. At around the time I took over Nostra Terra, I met someone from West Africa with whom I quickly formed a close bond. Speaking with this person and others, the more I learned about the region the more I saw the wider potential in Africa. It is another China in the making. There are so many anxious people there, waiting and wanting to raise themselves economically. Sadly, this desire is not matched yet by progress, and the continent is riven with enduring problems. However, if you examine these in detail, the one common link that can help alleviate them all is employment.

I was motivated to do something in Africa that would both help and work commercially. I focussed on West Africa, partially drawn there because I speak French. Oil and gas is underexplored in West Africa, especially onshore. This makes commercial sense for me because the costs involved are significantly lower than offshore exploration.

What made you decide to focus on Bénin?

After initial efforts in looking for the right opportunity in the region, I met Martin Keeley. Martin is now Elephant Oil’s technical director and it was clear to me that he and I shared the same objective. We like targeting “the obvious and overlooked”. Benin fits this bill perfectly.

The West Africa Transform Margin is a prolific hydrocarbon basin with discoveries and large reserves such as the Jubilee Field, Aje, and Ogo, to name but a few. The latter two are worth noting as they are in the same Dahomey Embayment where Elephant Oil’s initial asset is also located.

In the few cases where this basin goes onshore, there have been discoveries.  Bénin, particularly Block B, has the largest portion of the basin onshore, but is yet to be drilled and explored.

If you look at the map on our website of Block B, which is our licence area (shown below), you get an idea of the level of industry activity and success off the coast of Benin:

For example, the Seme Field, operated by Sapetro, has already produced 21million barrels of oil (MMBO) and there could be a further 197MMBO across that licence according to their estimates. In Block 2, the privately held Hunt Oil, from Dallas, recently had a discovery, and we are waiting to hear whether it is commercial.

Having decided to focus on Bénin, how did you go about entering this country and securing the Block B licence?

In January 2013 we created Elephant Oil Limited focusing on Benin. It then took roughly ten months of negotiations with, and getting to know the Ministry of Hydrocarbons (MERPMEDER, which is the French acronym) and SOBEH, the national oil company, before we secured the Block B Licence. These things always take time, but the early effort we put in has more than paid off. We have built strong relationships on the ground and have found local stakeholders are keen to help us.

Once we had reached agreement with the Ministry, Gavin Burnell, our non-executive director, quickly raised the money we needed from his network of contacts, and within 60 days, we paid for and secured Block B. As first mover onshore in Benin, we were given the pick of the available blocks and this was our preferred choice.

What made you choose Block B?

There is no doubt that oil is migrating from offshore to onshore across the region. This producing oil province stretches from the Nigerian fields in the east to the Jubilee Field in Ghana, to the west. We then determined that hydrocarbons have migrated through our block.

The Mamu Tar Belt to the north east of our block hosts an attributed 1billion to 3billion barrels of oil. It is uncertain where the sources of this oil could be. It might come from the same formation as the Seme or it might come from a deeper formation offshore, but it is from that general area, heading from offshore northwards to the edges of Block B and Block A, where it reaches the surface creating the Mamu Tar Belt.

We’ve also seen evidence of hydrocarbons on our block with oil and gas appearing in water wells. In the 1940s the French Institute conducted tests on a water well with gas shows and found methane, propane and butane.

We were also encouraged by 2D-seismic survey work conducted in the early 1980’s by a company called Trilogy. Studying this helped refine our choice.

We then proposed to the Ministry that we fly a new Aero Gravity Gradiometry survey over the whole onshore coastal basin (Blocks A & B). This decision was hugely influential in our securing Block B. The Ministry agreed to accept this in exchange for part of our work programme in the first phase of the licence for Block B, and to act as a signature bonus. It also ensured we had the choice of blocks.

Having flown the Aero Gravity Gradiometry survey, what additional progress have you made in Block B, and what are the next steps?

The licence blocks in Benin are set up on three, 3-year terms. Assuming commercial oil is discovered, there is the option for a further 25-year Production Sharing Contract, with a 10-year extension subject to size and extraction rate of discovery. These contract periods are generous and much longer than typically seen elsewhere, reflecting Benin’s desire to develop the industry onshore.

When it comes to the end of the first three years, Elephant Oil will relinquish 25% of Block B and then another 25% at the end of the second three year period. This focuses attention and requires a high level of discipline to get the best out of our blocks as quickly as possible. This is standard practice across the industry globally.

Having analysed the results of the previous 2D-seismic work and our own airborne survey, our efforts have since been dedicated to identifying leads and drill targets. We have identified a very large leads in our primary target area. We’ve done some initial work on a potential target size, but it is too early to quote any results, other than to say we are encouraged by what we have seen.

We will finish this initial seismic work in 2016, when the first exploration phase comes to an end. We will then have a commitment to drill an exploration well in the second phase, and another well during the second phase. This will be the first onshore exploration well in Benin’s history.

In the meantime, are we ever likely to see Elephant Oil appear as a listing on AIM?

We are looking at other potential acquisition to grow the portfolio, both on the asset level as well as the corporate level.  We have strong investor support, including the backing of two AIM-listed companies, but it is too early to have a definitive view on our commercial plans. 

Filed under:

Never miss a story.

This area of the site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.

More on EOLtd



  1. I look forward to the opportunity of owning shares with a 0.00000000025 % WI in the first drill ( not )

  2. Ben,

    So how do you square this piece of powder puff with your later article warning people not to invest in companies like Red Rock Resources who, as coincidence would have it, are proudly trumpeted by you as an investor in Elephant Oil in Benin. Must be Matt Lofgran is a “mate” of Share Prophets.

    Total shite as usual from you.


  3. @Davejay – This was the 3rd most popular piece yesterday, so clearly people are interested in it. That is part of our job, irrespective of how I may or may not feel. Got to be honest with you though, I am not sure who is the greater fool; me for writing this total shite or you for reading it…

Enter your comment below. Fields marked * are required. You must preview your comment first before finally posting.

Site by Everywhen