OPL 310 Update

RNS Number : 4366P

Lekoil Limited

08 February 2019

 

8 February 2019

LEKOIL Limited 

("LEKOIL" or the "Company")

OPL 310 - Update Re: Application for a Declaration regarding Ministerial Consent
 

LEKOIL (AIM: LEK), the oil and gas exploration, development and production company with a focus on Africa, provides an update on OPL310 with reference to the Company's Application for a Declaration regarding Ministerial Consent filed at the Federal High Court, Lagos on March 26, 2018.

Further to LEKOIL's announcement on 25 January 2019, a Federal High Court sitting in Ikoyi, Lagos State, Nigeria, on 7 February 2019 heard the matters presented before it.  The Court is expected to deliver its ruling on 28 March 2019. 

Due to the impending expiration of the OPL 310 licence, LEKOIL applied to the Court to hold in abeyance or suspend the unexpired term of OPL 310 pending the delivery of the Court's ruling.  The Court granted LEKOIL's application which effectively means that the license will not expire before the judgement of the Court is given on 28 March 2019.

LEKOIL had previously requested that the Federal Ministry of Petroleum Resources grant an extension of the license beyond February 2019 in order to recover over three years lost due to regulatory delays beyond the Company's control. The Company understands that the Department for Petroleum Resources has made its recommendation for an extension to the Honourable Minister of Petroleum Resources and is currently awaiting a response to the recommendation for a potential extension from the President.

LEKOIL continues to make progress with partner Optimum towards resolving the remaining issues regarding this matter in the interest of moving forward and beginning appraisal activities on OPL310.  The Company will provide further updates as appropriate. The Company is represented by Fidelis Oditah QC, SAN.

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

LEKOIL Limited Alfred Castaneda, Investor Relations Lisa Mitchell, Chief Financial Officer Strand Hanson Limited (Financial & Nominated Adviser) James Harris / James Spinney / Ritchie Balmer		[phone] [phone]
Mirabaud Securities Limited (Joint Broker) Peter Krens / Edward Haig-Thomas		[phone] / [phone]
BMO Capital Markets (Joint Broker) Jeremy Low / Thomas Rider Numis Securities (Joint Broker) John Prior / Ben Stoop		[phone] [phone]
Tavistock (Financial PR) Simon Hudson / Barney Hayward / Charles Vivian		[phone]

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").

Technical Background on OPL310

In 2013, 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 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% participating interest in OPL 310 for a total consideration of US$13 million, subject to Ministerial Consent.  Post acquisition, the Company holds a 40% working interest and 70% economic interest in the block, with AIOGL's 22.86% working interest and 40% economic interest subject to Ministerial Consent.

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