New Debt Facility with Sterling Bank

RNS Number : 7261C

Lekoil Limited

30 June 2016

 

30 June 2016

Lekoil Limited  

("Lekoil" or the "Company")

New Debt Facility with Sterling Bank

Lekoil (AIM: LEK), the oil and gas exploration and development company with a focus on West Africa, announces today the execution of a new debt facility totalling 5 billion Naira (US$17.7 million).

Debt Financing Update

Lekoil Oil & Gas Investments Limited, a wholly owned subsidiary of Lekoil Nigeria Limited, has signed the agreement for a new 5 billion Naira debt facility (approximately US$17.7 million at the Central Bank of Nigeria exchange rate of 284NGN:1USD) on the Otakikpo asset with Sterling Bank plc ("Sterling"), subject to the fulfilment of conditions precedent which are near complete. 

The facility has a maturity of three years and is repayable quarterly following a six-month moratorium with a margin of 10% over NIBOR.

Lekoil is pleased to agree on funding from yet another key local lender in Nigeria.  The Company has the flexibility to pay a portion of its costs in Naira, and expects to draw down on the facility as needed. The facility has no pre-payment penalty.   

In addition to the US$10 million and 2 billion Naira debt facilities from FBN Capital Limited announced on 20 June 2016, Lekoil has, in aggregate, US$10 million and 7 billion Naira of debt financing as the Company nears commercial production. 

Lekan Akinyanmi, Lekoil's CEO, said, "I am delighted that we have agreed to this additional facility with Sterling.  This facility provides us with funding we need to complete phase one of our Otakikpo Field Development Plan, culminating in 10,000 bopd of production by year-end.   We appreciate Sterling's support, and look forward to building a long-term relationship with them." 

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) Neil Haycock / Thomas Rider	[phone]
Tavistock (Financial PR) Simon Hudson / Ed Portman / Merlin Marr-Johnson	[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 Oil and Gas Investments Limited 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 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.

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 seven new wells expected to come on stream by the end of 2017, subject to requisite approvals.    

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