LEK.L Share News (LEK)

(Sharecast News) - Nigeria and West Africa-focussed oil and gas exploration and development company Lekoil has agreed to acquire, subject to the receipt of the required consents, a 45% participating interest in the production sharing contract in relation to the oil prospecting licence 276, it announced on Friday, covering a territory located onshore in the eastern Niger Delta basin.
The AIM-traded firm said the agreed acquisition, from Newcross Petroleum, was for a total staged consideration of $5m, which would be payable subject to a number of milestones.

Lekoil said its Lekoil 276 vehicle would also enter into an interim governance agreement with Newcross and Albright Waves Petroleum Development, setting out the terms on which it would provide technical support to the PSC.

The board said the acquisition was consistent with its continuing strategy to assemble a balanced portfolio of oil and gas interests, which already included production at Otakikpo, appraisal at OPL310, and "high impact" exploration assets in known basins at OPL325.

It said the licence was covered by around 150 square kilometres of 3D seismic, shot in 2008 by BGP, a subsidiary of China National Petroleum Company (CNPC), as well as various 2D seismic surveys.

"The acquisition of an interest in the OPL276 PSC represents an excellent opportunity to further build our growing production base in line with our stated strategy to create a balanced portfolio of assets," said chief executive officer Lekan Akinyanmi.

"With the completion of this, Lekoil will have acquired a potential near-term producing asset with significant resource potential."

Akinyanmi said the firm was "optimistic" about the prospects, which had shallow reservoirs and were said to be cost efficient to develop.

"Our focus will now shift to moving plans quickly forward for oil and gas production.

"We look forward to working with our partners to unlock additional value for our investors."