24 Oct 2018 07:00
24 October 2018
LEKOIL Limited
("LEKOIL" or the "Company")
OPL 310 - Update Re: Application for a Declaration regarding Ministerial Consent
LEKOIL (AIM: LEK), the oil and gas exploration, development and production company with a focus on Africa, announces an update on OPL310 (the "Block") with reference to the Company's Application for a Declaration regarding Ministerial Consent filed at the Federal High Court, Lagos on March 27, 2018.
Despite progressing exploration and appraisal activities on OPL 310 as previously announced, LEKOIL has, to date, not received Ministerial Consent for its acquisition of the additional 22.86 per cent interest in OPL 310 or a satisfactory explanation as to why such consent has not been forthcoming. As a result, the Company took the decision to apply to the Federal High Court for a declaration that is expected to expedite the consent process, and preserve the unexpired tenure in the licence.
A hearing before a Federal Judge previously scheduled to take place on Thursday October 18, 2018 was adjourned to November 29, 2018. As a partner in OPL310, Optimum Petroleum Development Company ("Optimum") had previously applied to be joined as a second defendant in the suit. The parties are in negotiations aimed at seeking a satisfactory conclusion for all parties on the above matter. LEKOIL and Optimum continue commercial discussions regarding the financial and technical obligations of both parties in the block once development work is underway. LEKOIL will provide further updates to the market as appropriate. The Company is represented by Fidelis Oditah QC, SAN.
For further information, please visit www.lekoil.com or contact:
LEKOIL Limited Alfred Castaneda, Investor Relations Lisa Mitchell, Chief Financial Officer
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+44 20 7920 3150
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Strand Hanson Limited (Financial & Nominated Adviser) James Harris / James Spinney / Ritchie Balmer
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+44 20 7409 3494
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Mirabaud Securities Limited (Joint Broker) Peter Krens / Edward Haig-Thomas
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+44 20 7878 3362 / +44 20 7878 3447 |
BMO Capital Markets (Joint Broker) Jeremy Low / Thomas Rider
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+44 20 7236 1010 |
Numis Securities (Joint Broker) John Prior / Ben Stoop
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+44 20 7260 1000 |
Tavistock (Financial PR) Simon Hudson / Nick Elwes / Charles Vivian |
+44 20 7920 3150 |
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
Technical Background on OPL310
In 2013, the first exploration well (Ogo-1) drilled by the OPL 310 partners - then consisting of Optimum, LEKOIL and Afren - was the Ogo prospect, a four-way dip-closed structure in the Turonian to Albian sandstone reservoirs. The drilling programme included a planned side-track well (Ogo-1 ST) which aimed to test a new play of stratigraphically trapped sediments at the basement of the Ogo prospect. The Ogo-1 well encountered a gross hydrocarbon section of 524ft, with 216ft of net stacked pay whilst the Ogo-1 ST well encountered the same reservoirs as Ogo-1 in addition to the syn-rift section which encountered a 280 ft vertical section gross hydrocarbon interval. Owing to well data collected from the two wells, the partners estimated P50 gross recoverable resources to be at 774 mmboe across the Ogo prospect four-way dip-closed and syn-rift structure.
On 25 November 2015, the Company entered into an agreement with the administrator of Afren and Afren Nigeria Holding Limited to acquire the shares of AIOGNL, which held a 22.86% participating interest in OPL 310 for a total consideration of US$13 million, subject to Ministerial Consent. Post acquisition, the Company holds a 40% working interest and 70% economic interest in the block, with AIOGL's 22.86% working interest and 40% economic interest subject to Ministerial Consent.
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LEK.L (LEK)