4 January 2018 

LEKOIL Limited 

("LEKOIL" or the "Company")

Otakikpo Update
Contract Signed to Acquire 3D Seismic for Phase Two
 

LEKOIL (AIM: LEK), the oil and gas exploration, development and production company with a focus on West Africa, announces that its joint venture with Green Energy International Limited ("GEIL") has signed a contract with Sinopec Changjiang Engineering Services Limited to acquire 197 sq km of 3D seismic data at the Otakikpo Marginal Field ("Otakikpo") in OML 11, onshore and offshore in the south-eastern part of the Niger Delta, to update the existing 2D coverage.  The seismic acquisition over Otakikpo is expected to commence in Q1 2018 to kick-off phase two development of Otakikpo. All relevant permits are currently being pursued prior to commencing mobilszation.

Following the completion of this seismic acquisition, the Company will then process and interpret the new 3D seismic data, subsequently releasing an updated Competent Person's report.  Otakikpo currently has an estimated 56.6 mmbls of gross unrisked 2C contingent resources and an additional 163.0 mmbls gross of Stock Tank Oil Initially In Place (STOIIP) upside on a P50, unrisked basis (AGR TRACS International, Competent Persons Report 2014). 

As the Otakikpo field nears Phase One target production of 10,000 bopd, the Joint Venture is now focused on Phase Two of the Otakikpo Field Development Plan which aims to increase steady state production up to approximately 20,000 bopd. 

Lekan Akinyanmi, LEKOIL's CEO, said, "With significant milestones already achieved in 2017 as the Otakikpo Technical and Financial Partner, today's announcement demonstrates LEKOIL's progress into the next phase of delivery and growth.  The Company expects the Phase Two development to be fully funded by industry players, which the Company is already in discussions with."

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

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").

Background to Otakikpo

Otakikpo is sited in a coastal swamp location in oil mining lease (OML) 11, adjacent to the shoreline in the south-eastern part of the Niger Delta. LEKOIL Nigeria exercises the rights and benefits of its 40% Participating and Economic interest in Otakikpo via the Farm-in Agreement and Joint Operating Agreement signed on 17 May 2014 with Green Energy International Limited ("GEIL"), the Operator.

The Otakikpo Joint Venture began operations in December 2014. Ministerial consent was granted by the Honourable Minister of Petroleum Resources of Nigeria in June 2015. LEKOIL funded the costs of development and is entitled to recover this expenditure preferentially from 88% of production cash flow from Otakikpo.

The Otakikpo Field Development Plan consists of two phases.  Phase One comprises the recompletions of two wells, Otakikpo-002 and Otakikpo-003, with the installation of an Early Production Facility of 10,000 bopd capacity and export via shuttle tanker. Phase Two covers the subsequent incremental development of the rest of the field with new wells. Otakikpo commenced commercial production in 2017.

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