Lekoil Limited OPL 310 Ministerial Consent Update (2755B)
April 03 2017 - 2:00AM
UK Regulatory
TIDMLEK
RNS Number : 2755B
Lekoil Limited
03 April 2017
3 April 2017
LEKOIL Limited
("LEKOIL" or the "Company")
Update on Ministerial Consent for OPL 310
LEKOIL (AIM: LEK), the oil and gas exploration and production
company with a focus on West Africa, provides an update on the
status of its applications to receive Ministerial Consent for its
original 17.14% farm-in stake in OPL 310, completed in 2013 (the
"Initial Interest"), and its further 22.86% interest in OPL 310
acquired in December 2015 via the acquisition of the entire issued
share capital of AIOGL (the "Further Interest"). Together, these
stakes give LEKOIL a consolidated(1) 40% participating interest and
a 70% economic interest in OPL 310.
The Initial Interest was acquired from Afren PLC via a farm-in
whereby the Company agreed to pay US$50 million towards an
exploration well on OPL 310. The Honourable Minister of State,
Petroleum Resources (the "Minister") granted consent, as announced
on 22 November 2016, for this Initial Interest in the third quarter
of 2016. However, that consent was conveyed to LEKOIL via a letter
that included encumbrances outside of the Minister's approval.
Following further engagements with both the Minister and the
Department of Petroleum Resources (DPR), LEKOIL is expecting a
revised letter of conveyance without conditions to be received
shortly.
While the share purchase of AIOGL is in accordance with the
Companies and Allied Matters Act, the Company has applied for
Ministerial Consent for the Further Interest in compliance with
recent changes in regulatory practices. The necessary due diligence
exercise to be undertaken by the DPR in relation to this has been
rescheduled and we are awaiting the notification of a new date.
1. Note: LEKOIL's consolidated interest in OPL 310 is held
through two subsidiaries, Lekoil Nigeria Limited ("Lekoil Nigeria")
and Lekoil 310 Limited. The Company's interest in Lekoil Nigeria
remains unchanged from the date of admission to trading on AIM.
Lekoil 310 Limited is a wholly owned subsidiary of the Company.
For further information, please visit www.lekoil.com or
contact:
LEKOIL Limited
Alfred Castaneda, Investor
Relations +44 20 3434 5800
Hamilton Esi, Corporate Communications +44 20 7920 3150.
Strand Hanson Limited (Financial
& Nominated Adviser)
James Harris / James Spinney
/ Ritchie Balmer +44 20 7409 3494
Mirabaud Securities LLP (Joint
Broker) +44 20 7878 3362 / +44
Peter Krens / Edward Haig-Thomas 20 7878 3447
BMO Capital Markets (Joint
Broker)
Vicary Gibbs / Neil Haycock
/ Thomas Rider +44 20 7236 1010
Tavistock (Financial PR)
Simon Hudson / Barney Hayward
/ Jos Simson +44 20 7920 3150
Background on OPL310
On 1 February 2013, Mayfair Assets and Trust Limited, a wholly
owned subsidiary of Lekoil Nigeria Limited, farmed into Afren
Investments Oil and Gas (Nigeria) Limited's interest in OPL 310 for
a 17.14% participating interest and 30% economic interest.
Later that year the first exploration well (Ogo-1) drilled by
the OPL 310 partners - then consisting of Optimum, LEKOIL Limited
and Afren Plc - 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 31 July 2015, Afren PLC, the parent company of Afren
Investments Oil & Gas Limited that held interests in the OPL
310 licence, was put into administration and its assets put up for
sale. LEKOIL moved quickly to protect its interests in OPL 310 by
beginning discussions with the administrator of Afren PLC for the
potential acquisition of its subsidiary interests in OPL 310. On 25
November 2015, the Company entered into an agreement with the
administrator of Afren PLC and Afren Nigeria Holding Limited to
acquire the shares of Afren Investments Oil & Gas Limited which
held a 22.86% participating interest in OPL 310 for a total
consideration of US$13 million. Application for Ministerial Consent
for this interest has been made and is pending.
-ends-
This information is provided by RNS
The company news service from the London Stock Exchange
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