(Alliance News) - Lekoil Ltd on Thursday said it secured a prepayment facility with oil major Royal Dutch Shell PLC, giving the Nigeria and west Africa-focused explorer "further short-term liquidity".
Lekoil Oil & Gas Investments Ltd, a 90%-owned subsidiary, penned the USD3.5 million agreement with Shell Western Supply & Trading Ltd, a Shell unit.
The financing expires in five months and charges a market margin over LIBOR, Lekoil explained. The company added that it is repayable through future crude oil liftings.
"This prepayment facility follows the renewal of the offtake agreement with SWST, which occurred in the second quarter of this year as announced on June 26, and will provide further short-term liquidity with the proceeds already received," Lekoil said.
"With the receipt of this facility, the offtake agreement between SWST and LOGL has been extended for an additional year and will now expire on April 28, 2022."
The offtake agreement with Shell was initially due to expire in the second quarter of 2020, before the extension was agreed last Friday.
Lekoil shares were 5.7% higher 2.32 pence each in London on Thursday morning. Shell's A shares were up 0.6% at 1,312.60p and B shares were up 0.8% at 1,246.20p
By Eric Cunha; ericcunha@alliancenews.com
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