First Crude Payment, Production Ramp-Up Ongoing

RNS Number : 7777G

Lekoil Limited

01 June 2017

 

01 June 2017                                                                                                                

LEKOIL Limited 

("LEKOIL" or the "Company")

First Crude Payment Received, Production Ramp-Up Ongoing

LEKOIL (AIM: LEK), the oil and gas exploration, development and production company with a focus on Africa, is pleased to announce that it has received payment for its first cargo lifted from the Otakikpo Marginal Field in OML 11, announced on 10 May 2017.  The high quality Otakikpo crude blend led to the Company realizing a small premium to Brent Crude pricing before marketing and related costs over the given period. 

Current production at Otakikpo is approximately 5,500 bopd.  With production gradually ramping up, the Company is now looking to establish more frequent regular liftings as it focuses on increasing production through year end.

For further information, please visit www.lekoil.com or contact:

LEKOIL Limited

Alfred Castaneda, Investor Relations

Hamilton Esi, Corporate Communications

[phone]

[phone]

Strand Hanson Limited (Financial & Nominated Adviser)

James Harris / James Spinney / Ritchie Balmer

[phone]

Mirabaud Securities LLP (Joint Broker)

Peter Krens / Edward Haig-Thomas

[phone] / [phone]

BMO Capital Markets (Joint Broker)

Jeremy Low / Neil Haycock / Thomas Rider

[phone]

Tavistock (Financial PR)

Simon Hudson / Barney Hayward

[phone]

Background to Otakikpo

Otakikpo is sited in a coastal swamp location in oil mining lease (OML) 11, adjacent to the shoreline in the south-eastern part of the Niger Delta. LEKOIL Nigeria exercises the rights and benefits of its 40% Participating and Economic interest in Otakikpo via the Farm-in Agreement and Joint Operating Agreement signed on 17 May 2014 with Green Energy International Limited ("GEIL"), the Operator.

The Company holds 90% of the economic interests in LEKOIL Nigeria. LEKOIL Limited's economic interest in Otakikpo therefore equates to 36%.  The Otakikpo Joint Venture (LEKOIL as Financial and Technical Partner to GEIL) began operations in December 2014. Ministerial consent was granted by the Honourable Minister of Petroleum Resources of Nigeria in June 2015. LEKOIL funded the costs of development and is entitled to recover this expenditure preferentially from 88 per cent. of production cash flow from Otakikpo.

The Otakikpo Field Development Plan consists of two phases.  Phase 1 comprises the recompletions of two wells, Otakikpo-002 and Otakikpo-003, with the installation of an Early Production Facility of 10,000 bopd capacity and export via shuttle tanker. Phase 2 covers the subsequent incremental development of the rest of the field with a new Central Processing Facility and new wells expected. Otakikpo commenced commercial production in 2017

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