Going Forward!!!15 Feb 2020 09:35
For the FULL YEAR 2019, production from Otakikpo averaged 5,305 bopd gross with 2,122 bopd net to LOGL (FULL YEAR 2018: 5,345 bopd gross with 2,138 bopd net to LOGL). For the FIRST TWENTY(20) DAYS OF THIS YEAR, production at Otakikpo has averaged 5,860 bopd gross with 2,344 bopd net to LOGL.
Further to the announcement on 1 July 2019, where the Otakikpo JV executed a Memorandum of Understanding ("MOU") with Schlumberger and a subsidiary of a major international oil company, the parties remain aligned and committed to the expansion project which has the potential, subject to satisfaction of the conditions set as previously announced, to increase production on the field up to 20,000 bopd (8,000 bopd net to LOGL).
THAT IS A 300% increase so OTAKIKPO alone provides LEK by my reckoning a positive Cash flow once this growth is achieved of around $200/300M annually.
Clearly I am missing something here as we are presently valued at £17M
OK Investigation underway into how we were defrauded but if we just ignore 310 completely LEK must be worth closer to 30p!!! IMO
On looking at he financials for year ending 2018 our current assets and liabilities balance out and from memory we have around £2M in the bank after taking the recently advised fraud hit of $600K.BUT we are about to see this increased by $7M imminently with another $7M in March and April and possibly May.
We have some costs to pay to Optimum but overall this I feel is covered by on going Cash flow!!
The company have detailed that financing 310 is a priority which to me seems the only hope.
Overall after my analysis today I feel this is a very strong buy.
Please feel free to pick holes in this as I really don't understand why LEK has such a low c/v
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