LEK.L Regulatory News (LEK)

21 May 2014

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN, OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA.

Lekoil Limited

("Lekoil" or the "Company")

Completed placing of new Ordinary Shares at 67.75 pence per share

to raise approximately US$37.7 million (approximately £22.4 million)

Lekoil (AIM: LEK), the oil and gas exploration and development company with a focus on Nigeria and West Africa, announces, further to the announcement made yesterday, that it has conditionally raised gross proceeds of approximately US$37.7 million (approximately £22.4 million) through the placing of 33,000,000 new Ordinary Shares at a placing price of 67.75 pence per Ordinary Share (the "Placing Price") with certain existing and new institutional and other investors via an accelerated book-build (the "Placing").

The net proceeds of the Placing are estimated to be US$36.5 million (approximately £21.7 million) and will be used to fund the equity portion, anticipated to be approximately 20 per cent., of the US$67 million initial work programme ("IWP") on the Otakikpo Marginal Field ("Otakikpo"), in which, as also announced yesterday, Lekoil has acquired a 40 per cent. participating interest and economic interest.

It is intended that the balance of the Placing proceeds will be used for general corporate and working capital purposes, including the payment of fees associated with the Placing.

The Placing, which has been conducted by Mirabaud Securities LLP ("Mirabaud") and UBS Limited, acting as joint bookrunners and Ladenburg Thalmann & Co. Inc. ("Ladenburg Thalmann"), acting as US Placing Agent, pursuant to the terms and conditions as set out in Appendix I to the announcement made yesterday, is conditional, inter alia, on Admission.

Application has been made for the admission of the Placing Shares to trading on AIM with effect from 27 May 2014. Following admission of the Placing Shares, the number of Ordinary Shares in issue will be 362,906,233. 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 yesterday.

Olalekan Akinyanmi, Chief Executive Officer of Lekoil, commented: "We are pleased with the continued support exhibited in this equity raise and remain committed to our strategy of growing the business in a diversified manner in terms of exploration, appraisal and near term production. Acquiring an interest in Otakikpo - an exciting near term production asset - represents another important step for Lekoil and we look forward to developing this asset."

Enquiries

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

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 nor UBS Limited 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.

UBS Limited, which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation 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 UBS Limited or for providing advice in relation to the Placing.

Ladenburg Thalmann, a broker-dealer registered with and regulated by the U.S. Securities and Exchange Commission (the "SEC") and the U.S. Financial Industry Regulatory Authority ("FINRA"), is acting as placement agent in the United States for the Placing Shares. Ladenburg Thalmann (i) was not requested to (and did not) verify or confirm any statement contained in the document relating to the past or future financial performance, financials, operations or activities of the Company or its affiliates, the Company's products or any market information; (ii) did not conduct any investigation with respect to such information; and (iii) cannot guarantee the accuracy of such information.

The distribution of this Announcement and the Placing in certain jurisdictions may be restricted by law. No action has been taken by the Company, Mirabaud or UBS Limited 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, Mirabaud and UBS Limited 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.

Details of the Placing

The Company has conditionally placed the Placing Shares using the Directors' existing authority to allot shares for cash on a non pre-emptive basis as granted at Lekoil's most recent general meeting held on 21 November 2013. The placing of the Placing Shares is expected to raise approximately gross proceeds of US$37.7 million (approximately £22.4 million) and is conditional only on Admission, which is currently expected to occur at 8.00 a.m. on 27 May 2014 (or such later date as the Company, Mirabaud and UBS Limited may agree, not being later than 30 June 2014). Following Admission, the Placing Shares will represent approximately 9.1 per cent. of the Company's then enlarged issued ordinary share capital. The Placing Shares will be fully paid and will rank pari passu in all respects with the Company's existing Ordinary Shares.

The Placing Price represents a discount of approximately 1.8 per cent. to the closing middle market price of 69 pence per Ordinary Share on 19 May 2014, being the last business day prior to the announcement of the Placing.

The Placing Shares have been conditionally placed by Mirabaud and UBS Limited as agents of the Company, with certain existing and new institutional and other investors pursuant to the Placing Agreement dated 20 May 2014. Under the terms of the Placing Agreement, Mirabaud and UBS Limited will receive commission from the Company conditional on Admission and the Company will give customary warranties and undertakings to Mirabaud and UBS Limited in relation, inter alia, to its business and the performance of its duties. In addition, the Company has agreed to indemnify Mirabaud and UBS Limited in relation to certain liabilities that they may incur in undertaking the Placing. Mirabaud and UBS Limited have the right (but after, where practicable, having consulted the Company) to terminate the Placing Agreement in certain circumstances prior to Admission, in particular, in the event that there has been, inter alia, a material breach of any of the warranties. The Placing is not being underwritten.

Total number of voting rights

The total number of Ordinary Shares in issue following completion of the Placing and the total number of voting rights, will be 362,906,233. Lekoil does not hold any Ordinary Shares in treasury and accordingly there are no voting rights in respect of any treasury shares. The aforementioned figure of 362,906,233 Ordinary Shares may be used by Shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, Lekoil under the FCA's Disclosure and Transparency Rules.

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