By Jaime Llinares Taboada
Lekoil Ltd. said Friday that it has renewed its offtake agreement with Royal Dutch Shell PLC subsidiary Shell Western Supply and Trading Ltd., and that it expects yearly cost reductions of $10 million starting from the second half of 2020.
The Africa-focused oil-and-gas company said the deal was due to expire in the second quarter of 2020 and has been extended for a year, with the option for an additional year following the provision of a prepayment facility.
The group said it has made progress with its previously announced general and administrative cost-reduction initiatives as it seeks liquidity flexibility while oil prices are low.
Lekoil also reported a cash balance of $700,000 and debt of $17.5 million as of May 31, and said that its gross production in the January-May period averaged 5,755 barrels of oil a day.
The company said it has extended the deadline for the release of its 2019 results to Sept. 30 due to the coronavirus pandemic.
Shares at 0842 GMT were down 0.30 pence, or 13%, at 2.05 pence.
Write to Jaime Llinares Taboada at firstname.lastname@example.org; @JaimeLlinaresT