Nigeria: Lekoil Commits to Long Term Growth

13 November 2020

Lekoil, the oil and gas exploration and production company with focus on Nigeria and West Africa, has restated its commitment to long term growth following the release of its unaudited interim results for the six months ended 30, June 2020.

The company in a statement said within the period it successfully completed site survey operation on OPL 310.

"While Otakikpo production averaged 5,676 bopd gross with 2,271 bopd net to Lekoil Nigeria. The group's share of equity crude was 408,800 barrels. Phase Two development plans at OPL 310 are underway, subject to securing funding, for the drilling of up to seven wells while the first two wells are expected to increase gross production to 10,000 bopd. With major preparatory work concluded for the Ogo appraisal drilling programme and well locations selected, funding discussions are currently underway with industry partners, "it stated.

The company also announced that it has renewed its off-take agreement with Shell Western Supply and Trading Limited for two years, included the provision of a $3.5 million prepayment facility to aid short term liquidity.

It added that the facility, which is repayable from future crude oil liftings, has a tenor of five months and charges a market margin over LIBOR.

"Despite the challenges of the first six months of the year, we have navigated this demanding period with steady production and cash flow generation from Otakikpo while implementing a range of significant cost reduction initiatives across our operations.

"However, net loss for the period stood at $7.9 million as against $5.2 million in the comparable period in 2019 while administrative and general expenses significantly reduced to approximately $1.0 million. Total outstanding debt financing, net of cash, stood at $15.6 million, as at 30 June 2020, " Lekan Akinyanmi, Lekoil's CEO noted.

According to Akinyanmi, "We are excited and encouraged by the interest received and the progress made towards raising the requisite financing to develop our high quality portfolio of assets and delivering on our drive to unlock the significant value that exists within them. We remain committed to creating value and generating attractive returns for our shareholders, our partners, employees and all our stakeholders."

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