Receipt of Ministerial Consent for OPL310 Farm-in

RNS Number : 7060H

Lekoil Limited

09 June 2017

 

09 June 2017                                                                                                                

LEKOIL Limited 

("LEKOIL" or the "Company")

Receipt of Ministerial Consent for OPL310 Farm-in

LEKOIL (AIM: LEK), the oil and gas exploration, development and production company with a focus on West Africa, is pleased to announce that the Honourable Minister of Petroleum Resources of Nigeria has granted consent to complete the transfer of the original 17.14% participating interest that LEKOIL acquired in OPL 310 in February 2013 to Mayfair Assets and Trust Limited, a subsidiary of LEKOIL. 

LEKOIL's acquisition of Afren plc's ("Afren") remaining 22.86% participating interest in OPL 310 (through LEKOIL 310 Limited, a wholly owned subsidiary of LEKOIL) as announced on 1 December 2015 remains conditional upon receiving Ministerial Consent.

Lekan Akinyanmi, LEKOIL's CEO, said, "We are delighted to have received ministerial consent on our original 17.14% participating interest in OPL 310. This is an asset with tremendous potential and I am delighted that we have achieved this significant milestone. We thank the Department of Petroleum Resources for their diligence and fostering an environment that encourages the attraction of investment in the Nigerian Oil and Gas sector."

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 on OPL310

On 1 February 2013, Mayfair Assets and Trust Limited farmed into Afren Investments Oil and Gas (Nigeria) Limited's (AIOGNL) interest in OPL 310 for a 17.14 per cent participating interest and 30 per cent economic interest. 

Later that year, the first exploration well (Ogo-1) drilled by the OPL 310 partners - then consisting of Optimum, LEKOIL and Afren - was the Ogo prospect, a four-way dip-closed structure in the Turonian to Albian sandstone reservoirs. The drilling programme included a planned side-track well (Ogo-1 ST) which aimed to test a new play of stratigraphically trapped sediments at the basement of the Ogo prospect. The Ogo-1 well encountered a gross hydrocarbon section of 524ft, with 216ft of net stacked pay whilst the Ogo-1 ST well encountered the same reservoirs as Ogo-1 in addition to the syn-rift section which encountered a 280 ft vertical section gross hydrocarbon interval. Owing to well data collected from the two wells, the partners estimated P50 gross recoverable resources to be at 774 mmboe across the Ogo prospect four-way dip-closed and syn-rift structure.

On 31 July 2015, Afren, the parent company of Afren Oil & Gas that held interests in the OPL 310 licence, was put into administration and its assets put up for sale. LEKOIL moved quickly to protect its interests in OPL 310 by taking legal action to apply for an injunction that meant Afren Oil & Gas could not dispose of its interest in OPL 310. The Company then began discussions with the administrator of Afren for the potential acquisition of its subsidiary interests in OPL 310. On 25 November 2015, the Company entered into an agreement with the administrator of Afren and Afren Nigeria Holding Limited to acquire the shares of AIOGNL, which held a 22.86 per cent participating interest in OPL 310 for a total consideration of US$13 million.

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