LEK.L Regulatory News (LEK)

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, REPUBLIC OF IRELAND, AUSTRALIA, CANADA, JAPAN, JERSEY, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

17 October 2016

LEKOIL Limited 

("LEKOIL" or the "Company")

Completion of Placing

LEKOIL (AIM: LEK), the oil and gas exploration and development company with a focus on West Africa, is pleased to announce that further to the announcement made on Friday 14 October 2016, it has raised gross proceeds of approximately US$12.4 million (approximately £10.15 million) through the placing of 48.33 million new Ordinary Shares (the "Placing Shares") at a placing price of 21 pence per Ordinary Share (the "Placing Price") with certain existing institutional and other investors via an accelerated book-build (the "Placing").

The net proceeds of the Placing will be used to fund the final amount of expenditure to bring Otakikpo into commercial production, which is expected to occur in the coming weeks. The balance of the net proceeds will be used for general corporate and working capital purposes. The Placing Price represents a 3.4 per cent. discount to the closing mid-market share price of the Company of 21.75 pence on Friday 14 October 2016.

The Placing was led by Mirabaud Securities LLP ("Mirabaud"), is subject to the terms and conditions set out in Appendix I to the announcement made on Friday 14 October 2016 and is conditional, inter alia, on admission of the Placing Shares to trading on AIM.

Application has been made for the admission of the Placing Shares to trading on AIM with effect from 20 October 2016. Following admission of the Placing Shares, the number of Ordinary Shares in issue will be 536,529,893. This figure may be used by shareholders as the denominator in the calculation by which they determine if they are required to notify the Company of their interest (or any change to their interest) in the Company under the FCA's Disclosure and Transparency Rules.

Unless otherwise defined herein, terms are as defined in the announcement made on Friday 14 October 2016.

Lekan Akinyanmi, Chief Executive Officer of Lekoil, commented: "This placing, and our undrawn debt facility, gives us a cushion with which to bring Otakikpo into commercial production and to ramp the field up to our phase one target of 10,000 barrels of oil per day. I look forward to announcing shortly the Company's first production and cash flows." 

For further information, please visit www.lekoil.com or contact:

Background to Otakikpo

Otakikpo is sited in a coastal swamp location in oil mining lease (OML) 11, adjacent to the shoreline in the south-eastern part of the Niger Delta. Lekoil Nigeria exercises the rights and benefits of its 40% Participating and Economic interest in Otakikpo via the Farm-in Agreement and Joint Operating Agreement signed on 17 May 2014 with Green Energy International Limited ("GEIL").

The Company holds 90% of the economic interests in Lekoil Nigeria. Lekoil Limited's economic interest in Otakikpo therefore equates to 36%. The Otakikpo Joint Venture (Lekoil as Financial and Technical Partner to GEIL) began operations in December 2014. Ministerial consent was granted by the Honourable Minister of Petroleum Resources of Nigeria in June 2015.

The Otakikpo Field Development Plan consists of two phases. Phase 1 comprises the recompletions of two wells, Otakikpo-002 and Otakikpo-003, with the installation of an Early Production Facility of 10,000 bopd capacity and export via shuttle tanker. Phase 2 covers the subsequent incremental development of the rest of the field with a new Central Processing Facility and seven new wells expected to come on stream during 2017.

The Market Abuse Regulation (MAR) became effective from 3 July 2016. Market soundings, as defined in MAR, were taken in respect of the Placing with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this announcement and has been disclosed as soon as possible in accordance with paragraph 7 of article 17 of MAR. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to the Company and its securities.

Certain statements in this Announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The information contained in this Announcement is subject to change without notice and neither the Company nor Mirabaud assumes any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein.

Past performance is not a guide to future performance.

The material in this Announcement is for informational purposes only and does not constitute an offer of securities for sale in the United States or any other jurisdiction in which such an offer or solicitation is unlawful. The Company's securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or the laws of any state, and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state laws. No public offering of securities will be made in the United States.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED, ("QUALIFIED INVESTORS") BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE "PROSPECTUS DIRECTIVE"); AND (B) IN THE UNITED KINGDOM, TO QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER"); (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THE PLACING SHARES ARE ONLY AVAILABLE TO RELEVANT PERSONS. NEITHER THE ANNOUNCEMENT NOR THESE TERMS AND CONDITIONS MAY BE ACTED UPON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY RECIPIENT OF THIS ANNOUNCEMENT WHO IS NOT A RELEVANT PERSON SHOULD TAKE NO OTHER ACTION.

Mirabaud, which is authorised and regulated by the Financial Conduct Authority, is acting for the Company in connection with the Placing and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Mirabaud or for providing advice in relation to the Placing.

The distribution of this Announcement and the Placing in certain jurisdictions may be restricted by law. No action has been taken by the Company or Mirabaud or by any of their respective affiliates or agents or brokers that would permit the Placing or possession or distribution of this Announcement or any other offering or publicity material relating to the Placing in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement becomes available are required by the Company and Mirabaud to inform themselves about, and to observe, such restrictions.

Neither the content of websites referred to in this Announcement, nor any hyperlinks on such websites is incorporated in, or forms part of, this Announcement.