13 June 2017

Nigeria: Kachukwu Grants Lekoil Consent for OPL 310 Farm-in

The Minister for Petroleum Resources, Dr. Ibe Kachukwu has granted Lekoil Limited consent to complete the transfer of the original 17.14 percent participating interest that the company acquired in Oil Prospective License, OPL 310, in February 2013, to Mayfair Assets and Trust, a subsidiary of Lekoil.

OPL 310 is an offshore license that contains the Ogo discovery, which is located in shallow water offshore Lagos.

Lekoil's acquisition of Afren's stake in the license brings its total holding in OPL 310 to 40 percent.

Lekoil's acquisition of Afren's remaining 22.86 percent participating interest in OPL 310, as announced on December 1, 2015, remains conditional upon receiving ministerial consent.

According to the company's Chief Executive Officer, Lekan Akinyanmi, "We are delighted to have received ministerial consent on our original 17.14 percent participating interest in OPL 310.

"This is an asset with tremendous potential and I am delighted that we have achieved this significant milestone. We thank the Department of Petroleum Resources for their diligence and fostering an environment that encourages the attraction of investment in the Nigerian Oil and Gas sector."

Akinyanmi added that the firm's near-term focus is to bring its Otakikpo field into production. The field has the potential in its initial phase to hit 10,000 barrels per day.

In February 2013, the company, through a subsidiary, farmed into Arena Investments Oil and Gas (Nigeria) Limited's (AIOGNL) interest in the license for a 17.14 percent participating interest and 30 percent economic interest.

Two years later, it acquired Afren's (which went into administration) 22.86 percent stake in the OPL 310 asset (with 40 percent economic interest).

The license hosts world class exploration and appraisal potential at the Ogo field and also further upside potential in several other targets.

In July 2015, Afren was put into administration and its assets put up for sale.

Lekoil applied for an injunction that meant Afren could not dispose of its interest in OPL 310 before beginning discussions with the administrator for the potential acquisition of its subsidiary interests in OPL 310.

In November of that year, it entered into an agreement with the administrator of Afren and Afren Nigeria Holding Limited to acquire the shares of AIOGNL, which held a 22.86 percent participating interest in OPL 310 for US$13mln in total.

Today, Lekoil said its acquisition of that remaining 22.86 percent participating interest in OPL 310 remained conditional upon receiving ministerial consent.

Lekoil is an Africa-focused oil and gas exploration and production company with interests in Nigeria and Namibia.

The Company was founded in 2010 by a group of leading professionals with extensive experience in the international upstream oil and gas industry as well as in global fund management and investment banking.

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