Operations Update and Analyst & Investor Day

RNS Number : 8633H

Lekoil Limited

03 December 2015

 

3 December 2015

Lekoil Limited

("Lekoil" or the "Company")

Assets and Operations Update

Analyst & Investor Conference Highlights Lekoil's Resource Portfolio

Lekoil (AIM: LEK) will be hosting a conference call in Lagos, Nigeria for investors and analysts today, 3 December 2015, at 12 noon GMT/13:00h CET and West Africa Time.  Dial-in details are set out below.

The Company will review its assets and operations following 2015's acquisition of a 62 per cent. economic interest in OPL 325, the acquisition of Afren's interest in OPL 310 (containing the world-class Ogo discovery) and the achievement of First Oil at the Otakikpo Marginal Field. 

OPL 310

The Company announced on 1 December 2015 the acquisition of Afren's participating interest in OPL 310, taking Lekoil's economic interest to 70 per cent. and its participating interest to 40 per cent. With the removal of Afren from the partner group, Lekoil and Optimum can now accelerate appraisal work on the licence. Early analysis of the new 3D seismic data acquired in 2014 has identified other prospects and leads similar to Ogo in size.  The Company expects to complete interpretation in the first half of 2016.  Following this the partners plan to spud an appraisal well before the end of 2016. As a result of Lekoil's increased economic interest in OPL 310, the Ogo risked prospective resources net to Lekoil is estimated at 541.8 mmboe.

OPL 325

Lekoil announced on 27 October 2015 the acquisition of a 62 per cent. economic interest in OPL 325, depositionally on trend with OPL 310 but 100km to the south.  The licence hosts 5-6 billion boe gross STOIIP unrisked prospective resources in several large prospects with associated channel complexes and turbidite fans.

The 3D seismic coverage over OPL325 contains very interesting occurrences and morphology that shows large channel incisions and high reflectivity channel fill, slope fans and turbidites. The potential for reservoir is concentrated in the slope channel fill and turbidites.  The presence and size of these large channels with stacked channel fill at many levels within the block confirms the Company's view that OPL 325 contains some potentially world class prospects. 

Otakikpo Production

The Company expects to conduct a flow test on Zone C6 around year end followed by an extended well test on the first string of Otakikpo-002.  Well re-entry activities on Otakikpo-002 are continuing and a well test and completion is currently expected by the end of Q1 2016, which will allow continuous production to commence from Otakikpo-002. The two strings at Otakikpo-003 are expected to be drilled, tested and completed around mid-year 2016.

The production profile for Phase 1 of Otakikpo, comprising production from the four strings at Otakikpo-002 and 003, is now expected to ramp up to approximately 10,000 bopd, rather than the original guidance of 6,000 bopd.  Based on identified resources and upside potential, the Company believes that peak production at Otakikpo in Phase 2 could reach 30,000 bopd.

Financial

As of 30 November 2015, the Company's cash balance was US$33.8 million.  Following the acquisitions of the interest in OPL 325 and increased interest in OPL 310, Lekoil is actively finalising its 2016 work budgets and programmes with its partners.  The Company expects to announce its 2016 capital expenditure programmes once this process has been completed in early 2016 and approved by the Board of Directors.

The agenda for the conference presentation is as follows:

Topic	Presenter
Introduction	Hamilton Esi, Head of Corporate Communications
Overview	Lekan  Akinyanmi, Chief Executive Officer
Technical	Sam Olotu, Chief Technical Officer
Operations, HSE & Community	Leke Adedipe, Chief Operating Officer
Commercial	Dotun Adejuylgbe, Head, Commercial
Finance	Daniel Barcelo, Head, Corporate Finance
Question and Answer Session	Panel

If you would like to dial in please use the numbers and extension number below.  The presentation will be available on the Investors section of the Company's web site from shortly before the start of the event.

UK: [phone]

US: [phone]

Extension: 1589650#

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

Lekoil Limited Lekan Akinyanmi (CEO) / Hamilton Esi (Corporate Communications)	[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) Rupert Newall / Neil Haycock / Thomas Rider	[phone]
Tavistock (Financial PR) Simon Hudson / Ed Portman / Merlin Marr-Johnson	[phone]

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