Lekoil : Update on Otakikpo Operations

RNS Number : 9311A

Lekoil Limited

27 January 2020

27 January 2020

Lekoil Limited

("LEKOIL" or the "Company")

Update on Otakikpo Operations

LEKO I L (AI M: LEK), the oil and gas explora on and produc on company with a focus on Nigeria and West Africa, announces today, on behalf of the O takikpo Joint Venture ("O takikpo JV") which is made up of Green Energy I nterna onal Limited ("GEI L"), the O perator, and the Technical Partner, LEKO I L O il and Gas I nvestments Limited ("LO GL"), a member of the LEKO I L Limited group, an operational update on Otakikpo Marginal Field ("Otakikpo") in OML 11.

The O takikpo JV, on 25 January 2020, completed the first crude oil li ing of this year by the nominated o aker, Shell Western Supply and Trading Limited ("SWST") (a member of the Royal Dutch Shell plc group of companies). LO GL expects to receive cash proceeds from this crude oil li ing of c. US$7.0 million. The next li ing, of a similar quan ty, is expected to occur within the next four to six weeks .

For the full year 2019, production from Otakikpo averaged 5,305 bopd gross with 2,122 bopd net to LOGL (full year 2018: 5,345 bopd gross with 2,138 bopd net to LOGL). For the first twenty (20) days of this year, production at Otakikpo has averaged 5,860 bopd gross with 2,344 bopd net to LOGL.

Further to the announcement on 1 July 2019, where the O takikpo JV executed a Memorandum of Understanding ("M O U") with Schlumberger and a subsidiary of a major interna onal oil company, the par es remain aligned and commi ed to the expansion project which has the poten al, subject to sa sfac on of the condi ons set as previously announced, to increase produc on on the field up to 20,000 bopd (8,000 bopd net to LO GL). The phased development plan for the project consists of drilling between five (5) and seven (7) new wells as well as the expansion of processing infrastructure which will be financed by a project finance debt facility. A further update on the progress of this project will be provided shortly.

As at 31 December 2019, LO GL has an outstanding balance (including accrued interest) of interest-bearing term loans of US$19.2 million. This outstanding balance is detailed in the table below:

Lender	Facility Type		Pricing	Maturity Date	Outstanding
							Balance
FBNQuest Capital	Term	loan	with	LIBOR + 10.00%	30	-Jun-21	US$3.0 million
Limited	quarterly repayment
FBNQuest Merchant	Term	loan	with	LIBOR + 10.00%	30	-Jun-21	US$5.2 million
Bank Limited	quarterly repayment
FBNQuest Merchant	Term	loan	with	LIBOR + 10.00%	24	-Oct-23	US$11.0 million
Bank Limited	quarterly repayment
Total debt outstanding							US$19.2 million

L ekan Akinyanmi, L EKO IL 's C EO, commented,"O takikpo con nues to provide steady produc on and cashflow for LEKO I L. We are delighted with the collabora ve progress being made by all par es towards the development and transforma on project planned for O takikpo, that is aimed at increasing produc on from the field. We remain fully focused to generate value on this asset for all shareholders."

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.comor contact:

LEKOIL Limited
Ore Bajomo, Investor Relations	+44	20 7457 2020
Strand Hanson Limited (Financial & Nominated Adviser)
James Spinney / Ritchie Balmer	+44	20 7409 3494
Mirabaud Securities Limited (Joint Broker)
Peter Krens / Edward Haig-Thomas	[phone] / [phone]
Numis Securities Limited (Joint Broker)	[phone]
John Prior / Emily Morris
Instinctif (Financial PR)	[phone]

Mark Garraway / Dinara Shikhametova / Sarah Hourahane

[e-mail]

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