LONDON (Alliance News) - Oil and gas exploration company said late Tuesday that it plans to raise up to USD40 million in a share placing, to part fund its acquisition of an indirect controlling interest in the OPL 325 block, offshore Nigeria.
It will acquire the interest through the acquisition of an 88.57% interest in Ashbert Oil and Gas Ltd, the operator of OPL 325.
It will pay an initial USD16.1 million for the interest to the Nigerian Department of Petroleum Resources, with other payments due at development milestones totalling USD24.1 million.
Lekoil will part fund the acquisition through its existing financial resources and the proceeds of the placing.
"The acquisition of an interest in OPL 325, nearby and on trend to our existing interest in OPL 310, represents an excellent low cost opportunity to extend our footprint in the overlooked but prospective Dahomey Basin in Nigeria. It is precisely in line with our stated strategy to create a balanced portfolio of assets. With the completion of these acquisitions Lekoil will have acquired a substantial resource base in the Dahomey Basin," said Chief Executive Officer Lekan Akinyanmi in a statement.
"Our focus will now shift to de-risking these assets and crystallizing value for our investors. We consider the acquisition price to be very attractive and look forward working with our partners to unlock the significant value in this asset," Akinyanmi added.
Elsewhere, the company said it continues to be in advanced talks with the administrator of Afren over the potential acquisition of its subsidiary which holds a 22.86% participating interest and 40% interest in OPL 310. If this acquisition goes ahead, it will be funded via its existing financial resources and the proceeds of the placing.
The placing will be conducted via a bookbuilding process, and details of the number of placing shares and the price at which they will be offered will be determined following the completion of the bookbuilding process.
Shares in Lekoil closed down 2.0% at 25.00 pence Tuesday.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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