Lekoil agrees prepayment facility with Shell subsidiary

(Sharecast News) - Nigeria and West Africa-focussed oil and gas exploration and production company Lekoil announced on Thursday that Lekoil Oil and Gas Investments (LOGL), in which it has a 90% economic interest, has executed a prepayment facility agreement with Shell Western Supply and Trading (SWST) - a member of the Royal Dutch Shell group of companies.
The AIM-traded firm said the prepayment facility followed the renewal of the offtake agreement with SWST in the second quarter, and would provide further short-term liquidity, with the proceeds already received.

It said the facility size was $3.5m (£2.79m), adding that it had a tenor of five months, charging a market margin over LIBOR.

The facility was repayable from future crude oil liftings.

With receipt of the facility, the offtake agreement between SWST and LOGL was extended for an additional year, and would now expire on 28 April 2022.

"We are pleased to continue our relationship with Shell as a commercial and financial partner," said chief executive officer Lekan Akinyanmi.

"Together with the recent cost reduction measures we have undertaken, receipt of the proceeds of this prepayment facility will further strengthen our balance sheet to support execution of our strategy."

At 0852 BST, shares in Lekoil were up 5.68% at 2.32p.