‘Shareholders key to our business

ShareholdersOil and gas firm Lekoil has said value appreciation for shareholders will be the core of its operational strategy this year.

Its CEO, Olalekan Akinyanmi, said in a note that accompanied its 2018 financial report, that the priority is also to grow production at its Otakikpo through Phase Two development (subject to funding) to reach gross volumes of between 15,000 and 20,000 barrels per day (bpd).

“The first step has already occurred, with 3D seismic data acquisition and interpretation now completed. This  year  should, therefore, provide key catalysts for value appreciation for shareholders as we move forward in building a leading Africa-focused exploration and production business,” he said.

Lekoil 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.Working with partners, government and regulatory agencies, the company has sustained production levels and continues an aggressive investment campaign which is projected to result in increased production and profitability in the short to medium term.

“We also continue to advance toward the start of the appraisal drilling programme on Ogo in OPL 310.  We will work with our joint venture partner, Optimum to negotiate agreements that will allow us to make progress on the block, after securing all relevant regulatory extensions and approvals,’ Akinyanmi said.

Apart from its interests in Oil Mining Lease (OML) 310, the company and its partners finalised Technical Evaluation on Oil Production Lease (OPL) 325 in January last year.

Its consultants, Lumina, identified and reported on 11 prospects and leads which were estimated to contain potential gross aggregate Oil-in-Place volumes of over 5,700 mmbbls (un-risked, Best Estimate case). After finalising terms for a Production Sharing Contract (PSC) on the block, Lekoil intends to farm-down a portion of its 62 per cent working interest following a detailed prospect/lead risking study.

In the same vein, LEKOIL (AIM: LEK), the oil and gas exploration and development company with a focus on Nigeria and West Africa more generally, provides the following operational and trading update.

Highlights

• H1 2019 average production was 5,822 barrels of oil per day (“bopd”), with 2,329 bopd net to LEKOIL Nigeria, compared to 2,042 bopd for the same period in 2018

• Downtime was zero days since the beginning of the calendar year 2019

• The Joint Venture partners remain focused on Phase Two of the Otakikpo Field Development Plan

Outlook

• Production rates are expected to remain steady through 2019, with H2 2019 average production expected to be circa 5,800 bopd, with 2,324 bopd net to LEKOIL Nigeria

• One lifting is scheduled from the FSO Ailsa Craig in July of circa 350,000 barrels of oil

• Plans underway, subject to finalisation of funding, for a multi-well drilling programme

Financial

• 2019 full year costs, comprising of operating expenses and general administrative costs is expected to be in line with current market expectations; the Company remains focused on decreasing general and administrative costs by 25%

• Phase One capital expenditure for the full year is currently expected to be US$5.1 million, largely attributed to minor infrastructure upgrades at Otakikpo, which is in line with current market expectations.  Approximately US$2.7 million of this was spent in H1 2019.

• Outstanding debt financing, less cash is expected to be US$4.5 million at year end

Otakikpo

The Joint Venture partners remain focused on Phase Two of the Otakikpo Field Development Plan, with a Schlumberger-led consortium aiming to reach gross volumes of up to approximately 15,000 bopd to 20,000 bopd.  The plan involves drilling up to five wells as well as expanding processing infrastructure.  Site mobilisations are tentatively scheduled to begin in Q3 of 2019. Please refer to the Company’s announcement dated 1 July 2019 for further information on the Otatikpo MoU.

 

Also LEKOIL, the oil and gas exploration and development company with a focus on Nigeria and West Africa more generally, announces that it has received notifications that:

• Mr. Olalekan Akinyanmi, the Chief Executive Officer of the Company, purchased 915,950 ordinary shares of USD0.00005 par value each in the Company (“Ordinary Shares”) at an average price of 4.2 pence per Ordinary Share on 16 July 2019.  Following the transaction, Mr. Akinyanmi now has a total shareholding in LEKOIL of 40,248,501 Ordinary Shares representing approximately 7.5 per cent of the issued ordinary share capital of the Company.

 

• Mr. Gregory Eckersley, the Interim Chief Financial Officer of the Company, purchased 150,000 ordinary shares of USD0.00005 par value each in the Company at an average price of 4.0 pence per Ordinary Share on 16 July 2019.  Following the transaction, Mr. Eckersley now has a total shareholding in LEKOIL of 3,153,050 Ordinary Shares representing approximately 0.6 per cent of the issued ordinary share capital of the Company.

 

• Mr. Samuel Olotu, the Chief Technical Officer of the Company, purchased 235,130 ordinary shares of USD 0.00005 par value each in the Company at an average price of 4.0 pence per Ordinary Share on 16 July 2019.  Following the transaction, Mr. Olotu now has a total shareholding in LEKOIL of 299,260 Ordinary Shares representing approximately 0.1 per cent of the issued ordinary share capital of the Company.

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