Re Cost and Revenue Sharing Agreement for OPL 310

RNS Number : 1199Q

Lekoil Limited

24 February 2021

 

24 February 2021

Lekoil Limited

("LEKOIL" or the "Company")

Re Cost and Revenue Sharing Agreement for OPL 310

LEKOIL (AIM: LEK), the oil and gas exploration and production company with a focus on Nigeria and West Africa, announces that Mayfair Assets and Trusts Limited ("Mayfair"), in which the Company has a 90 per cent. economic interest, has received a letter from Optimum Petroleum Development Company ("Optimum"), the Operator of the OPL 310 Licence, proposing to terminate the Cost and Revenue Sharing Agreement ("CRSA" or the "Agreement") executed for OPL 310.

As announced on 11 December 2020, Optimum conveyed its enforcement of the default clause within the CRSA. Pursuant to the CRSA, the default clause stipulates that, following a cure period, if a default has occurred, Optimum and Mayfair shall jointly seek and agree on a buyer to whom Mayfair's 17.14% Participating Interest as well as the financial obligation within OPL 310 will be transferred. Mayfair will also be entitled to a full reimbursement of all amounts due to it, as a result of past costs spent on the asset, from future production proceeds from OPL 310.

The Company believes that this further letter proposing to terminate the CRSA is not valid as the relevant provisions of the CRSA have not been adhered to by Optimum. The Company will engage with Optimum to ensure that the appropriate steps outlined in the Agreement are followed, and is also seeking legal advice on the matter. Further updates to shareholders will be provided in due course.

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014.  Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

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

LEKOIL Limited Hamilton Esi, Corporate Communications Ore Bajomo, Investor Relations	[phone]
SP Angel Corporate Finance LLP (Nominated Adviser and Joint Broker) John Mackay / Jeff Keating / Stuart Gledhill / Richard Hail	[phone]
Tennyson Securities (Joint Broker) Peter Krens / Edward Haig-Thomas	[phone]
Instinctif (Financial PR) Mark Garraway / Galyna Kulachek / Sarah Hourahane	[phone] [e-mail]

 

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