(Alliance News) - Lekoil Ltd on Friday said it has agreed to buy a 45% stake in the oil prospecting licence 276, covering onshore area in the eastern Niger Delta basin.
The stock was 9.4% higher in early trade in London at 5.31 pence a share.
The exploration and development company said subsidiary Lekoil 276 Ltd will buy the stake from Newcross Petroleum Ltd for a total staged consideration of USD5 million. Newcross will continue to hold 45% interest in licence, with Albright Waves Petroleum Development Ltd holding the remaining 10%.
The acquisition is consistent with Lekoil's continuing strategy to assemble a balanced portfolio of oil and gas interests, it said.
The company said it expects to finance the acquisition and the costs of the future asset work programme with a combination of its existing financial resources and a financing solution with a strategic industry partner - discussions about which have already commenced.
Lekoil 276 will also enter into an interim governance agreement with Newcross and Albright, setting out the terms on which Lekoil 276 will provide technical support to the licence.
"The acquisition of an interest in the oil producing licence 276 production sharing contract 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 Lekoil Chief Executive Lekan Akinyanmi.
"We are optimistic about the prospects here, which have shallow reservoirs and are cost efficient to develop," continued Akinuanmi. "We look forward to working with our partners to unlock additional value for our investors."
