Report from RV Global Associates4 Nov 2015 14:36
LEKOIL
LIMITED
Lekoil Limited is an oil and gas exploration and production company focused on Nigeria and offshore Namibia.
The company’s shares recently rocketed +30% after it announced the start of oil production from its Otakikpo field in
the Niger Delta.
The Otakikpo 002 well produced from only the first of four planned production strings across the
two wells, and flowed oil at a peak rate of 5,703 barrels of oil per day, significantly ahead of expectations.
Further good news may be in the pipeline as the company begins appraising the significant Ogo discovery on the
OPL 30 licence.
Interestingly Lekoil’s original guidance was for around 6,000 barrels per day from the four strings at Otakikpo-002 and-
003 –therefore confirmation of the find at Otakikpo-002 well means this guidance will be significantly
exceeded should further testing and analysis yield good news from the other well.
Given that the shares have been as high as 80p on the prospect for oil, the fact that oil has now been discovered is a bullish signal for the company’s future prospects.
The oil price is obviously key to the future share price trajectory, but the fact that Lekoil has been able to continue
financing its prospecting activities during this period of low prices is a positive signal for when an oil price recovery begins. A net cash balance of $22.6m as of September 2015 should stand the company in good stead to grow further organically as well as through value-added acquisitions