26 June 2017
("LEKOIL" or the "Company")
Otakikpo Operational Update
Full Cargo Lifted from FSO Ailsa Craig
LEKOIL (AIM: LEK), the oil and gas exploration, development and production company with a focus on Africa, is pleased to announce its second export from the Otakikpo Marginal Field ("Otakikpo") in OML 11. Approximately 250,000 barrels of gross production have been lifted from the FSO Ailsa Craig by Shell Western Supply and Trading Limited ("Shell Trading"), a subsidiary of Royal Dutch Shell (LSE: RDSA, RDSB). Under the terms of the Crude Sales Agreement with Shell Trading, the Company is due to receive its share of the payment for this crude within the next month.
With regular liftings from Otakikpo underway, the Company does not intend to provide updates for each export. The Company expects to provide export updates concurrent with the Company's reporting dates going forward.
Current production at Otakikpo is approximately 5,500 bopd. The Company continues to focus on ramping up to Phase One target production of 10,000 bopd.
For further information, please visit www.lekoil.com or contact:
Alfred Castaneda, Investor Relations
Hamilton Esi, Corporate Communications
|+44 20 7920 3150
+44 20 7920 3150
|Strand Hanson Limited (Financial & Nominated Adviser)
James Harris / James Spinney / Ritchie Balmer
|+44 20 7409 3494
|Mirabaud Securities LLP (Joint Broker)
Peter Krens / Edward Haig-Thomas
|+44 20 7878 3362 / +44 20 7878 3447
|BMO Capital Markets (Joint Broker)
Jeremy Low / Neil Haycock / Thomas Rider
|+44 20 7236 1010
|Tavistock (Financial PR)
Simon Hudson / Barney Hayward / Merlin Marr-Johnson
|+44 20 7920 3150
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 Company holds 90% of the economic interests in LEKOIL Nigeria. LEKOIL Limited's economic interest in Otakikpo therefore equates to 36%. The Otakikpo Joint Venture (LEKOIL as Financial and Technical Partner to GEIL) 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 per cent. of production cash flow from Otakikpo.
The Otakikpo Field Development Plan consists of two phases. Phase 1 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 2 covers the subsequent incremental development of the rest of the field with a new Central Processing Facility and new wells expected. Otakikpo commenced commercial production in 2017.