2 Jul 2020 07:00
2 July 2020
Lekoil Limited
("LEKOIL" or the "Company")
Prepayment Facility
LEKOIL (AIM: LEK), the oil and gas exploration and production company with a focus on Nigeria and West Africa, is pleased to announce that LEKOIL Oil and Gas Investments Limited ("LOGL"), in which the Company has a 90 per cent. economic interest in, has executed a prepayment facility agreement with Shell Western Supply and Trading Limited ("SWST"), a member of the Royal Dutch Shell group of companies (LSE: RDSA, RDSB).
This prepayment facility follows the renewal of the offtake agreement with SWST, which occurred in the second quarter of this year as announced on 26 June 2020, and will provide further short-term liquidity with the proceeds already received.
The facility size is US$3.5 million, and it has a tenor of five months and charges a market margin over LIBOR. The facility is repayable from future crude oil liftings. 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 28 April 2022.
Lekan Akinyanmi, LEKOIL's CEO, commented, "We are pleased to continue our relationship with Shell as a commercial and financial partner. Together with the recent cost reduction measures we have undertaken, receipt of the proceeds of this prepayment facility will further strengthen our balance sheet to support execution of our strategy."
The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.
For further information, please visit www.lekoil.com or contact:
LEKOIL Limited Ore Bajomo, Investor Relations |
+44 20 7457 2020 |
Strand Hanson Limited (Financial & Nominated Adviser) James Spinney / Ritchie Balmer / Georgia Langoulant |
+44 20 7409 3494 |
Mirabaud Securities Limited (Joint Broker) Peter Krens / Edward Haig-Thomas |
+44 20 7878 3362 / +44 20 7878 3447 |
Numis Securities Limited (Joint Broker) John Prior / Emily Morris | +44 20 7260 1000 |
Instinctif (Financial PR) Mark Garraway / Dinara Shikhametova / Sarah Hourahane | +44 20 7457 2020 lekoil@instinctif.com |
Background on 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. LOGL exercises the rights and benefits of its 40% Participating and Economic interest in Otakikpo through the Farm-in Agreement and Joint Operating Agreement signed on 17 May 2014 with Green Energy International Limited ("GEIL"), the Operator. LOGL is a wholly owned subsidiary of Lekoil Nigeria Limited, which the Company has a 90 per cent. economic interest. The Otakikpo JV begun operations in December 2014. Ministerial consent was granted by the Honourable Minister of Petroleum Resources of Nigeria in June 2015. Commercial production started in February 2017.