Update on Otakikpo Operations

27 January 2020

Lekoil Limited

("LEKOIL" or the "Company")

Update on Otakikpo Operations

LEKOIL (AIM: LEK), the oil and gas exploration and production company with a focus on Nigeria and West Africa, announces today, on behalf of the Otakikpo Joint Venture ("Otakikpo JV") which is made up of Green Energy International Limited ("GEIL"), the Operator, and the Technical Partner, LEKOIL Oil and Gas Investments Limited ("LOGL"), a member of the LEKOIL Limited group, an operational update on Otakikpo Marginal Field ("Otakikpo") in OML 11.

The Otakikpo JV, on 25 January 2020, completed the first crude oil lifting of this year by the nominated offtaker, Shell Western Supply and Trading Limited ("SWST") (a member of the Royal Dutch Shell plc group of companies). LOGL expects to receive cash proceeds from this crude oil lifting of c. US$7.0 million. The next lifting, of a similar quantity, is expected to occur within the next four to six weeks.

For the full year 2019, production from Otakikpo averaged 5,305 bopd gross with 2,122 bopd net to LOGL (full year 2018: 5,345 bopd gross with 2,138 bopd net to LOGL). For the first twenty (20) days of this year, production at Otakikpo has averaged 5,860 bopd gross with 2,344 bopd net to LOGL.

Further to the announcement on 1 July 2019, where the Otakikpo JV executed a Memorandum of Understanding ("MOU") with Schlumberger and a subsidiary of a major international oil company, the parties remain aligned and committed to the expansion project which has the potential, subject to satisfaction of the conditions set as previously announced, to increase production on the field up to 20,000 bopd (8,000 bopd net to LOGL). The phased development plan for the project consists of drilling between five (5) and seven (7) new wells as well as the expansion of processing infrastructure which will be financed by a project finance debt facility. A further update on the progress of this project will be provided shortly.

As at 31 December 2019, LOGL has an outstanding balance (including accrued interest) of interest-bearing term loans of US$19.2 million. This outstanding balance is detailed in the table below:

Lekan Akinyanmi, LEKOIL's CEO, commented, "Otakikpo continues to provide steady production and cashflow for LEKOIL. We are delighted with the collaborative progress being made by all parties towards the development and transformation project planned for Otakikpo, that is aimed at increasing production from the field. We remain fully focused to generate value on this asset for all shareholders."

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: