Trading and operational update

RNS Number : 5635T

Lekoil Limited

26 March 2021

 

26 March 2021

Lekoil Limited

("LEKOIL" or the "Company")

Trading and operational update

LEKOIL (AIM: LEK), the oil and gas exploration and production company with a focus on Nigeria and West Africa, provides the following trading and operational update for the full year ended 31 December 2020.

Corporate Update

For the year ended 31 December 2020, unaudited revenue was US$31.5 million, down 25% from the previous year of US$42.0 million. This decrease was largely due to the lower realised oil price experienced in 2020 of US$35.5 per barrel compared with US$62.0 per barrel in 2019. With the improving macro-economic outlook, the Company is beginning to benefit from the more favourable crude pricing environment.

The Group expects to report a total comprehensive loss of US$16.2 million for the year ended 31 December 2020 (2019: loss of US$12.0 million). The unaudited total cash balance as at 31 December 2020 stood at US$4.5 million with US$1.7 million recognised as restricted cash (audited total cash balance as at 31 December 2019 was US$3.8 million with US$1.1 million recognised as restricted cash). As at 31 December 2020, total unaudited outstanding debt financing, net of cash (excluding restricted cash), was US$11.4 million, compared to US$15.6 million as at 30 June 2020 (31 December 2019: US$16.5 million). Trade and other payables stood at US$31.1 million as at 31 December 2020 (31 December 2019: US$20.6 million).

As at 28 February 2021, the Group has an outstanding balance of external interest-bearing loans and borrowings of approximately US$14.7 million and a total cash balance of US$2.1 million, with US$1.5 million recognised as restricted cash. Trade and other payables stood at US$33.2 million as at 28 February 2021.

The Board of Directors and management of LEKOIL believe that the underlying quality of the assets in the Company's portfolio will underpin their commitment to deliver a high performing business that produces value for all shareholders.

Portfolio Update

Otakikpo

On behalf of the two Otakikpo Joint Venture ("Otakikpo JV") partners, Green Energy International Limited ("GEIL"), the operator of the Otakikpo Marginal Field, and LEKOIL Oil and Gas Investments Limited ("LOGL"), the technical partner and a member of the LEKOIL group, following is an update on operational performance in respect of the Otakikpo Marginal Field ("Otakikpo") in OML 11, the Company's sole producing asset:

· For the full year 2020, average production levels were 5,062 bopd gross with 2,025 bopd net to LOGL. This was down 5% from 2019  (5,305 bopd gross with 2,122 bopd net to LOGL).

· Average daily production was 5,378 bopd gross with 2,151 bopd net to LOGL for January and February 2021.

· The first lifting of the year occurred in February 2021 with net cash proceeds of US$3.7 million.

· The second lifting occurred last week with increased net cash proceeds of US$6.6 million expected following an increase in the volume lifted and the improving crude pricing environment.

· The Company remains in discussions with financiers to raise its share of the funding required for the next two wells on the field, which amounts to US$10.0 million in aggregate.

OPL 310

The Company has engaged with Optimum regarding its notice to terminate the Cost and Revenue Sharing Agreement ("CRSA") in respect of OPL 310. An update will be provided in due course.

Total Voting Rights Update

The Company has updated its share register as an administrative error related to its previously noted issued share capital figures was discovered. As opposed to the previously notified issued share capital figure of 536,529,983, the number of Ordinary shares in issue is 536,779,983 (representing an additional 250,000 shares which were not included in the Company's issued share capital following the fundraise as announced on 17 July 2013). This figure should be used by shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in, LEKOIL under the Financial Conduct Authority's Disclosure and Transparency Rules.

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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