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Home Uncategorized Interim Result: Lekoil commits to long term growth

Interim Result: Lekoil commits to long term growth

Lekoil, the oil and gas exploration and production company with focus on Nigeria and West Africa, has restated its commitment to long term growth following the release of its
unaudited interim results for the six months ended 30, June 2020.

Within the period, the company successfully completed site survey
operation on OPL 310. While Otakikpo production averaged 5,676 bopd
gross with 2,271 bopd net to LEKOIL Nigeria. The Group’s share of equity
crude was 408,800 barrels.
Phase Two development plans at OPL 310 are underway, subject to securing
funding, for the drilling of up to seven wells while the first two wells
are expected to increase gross production to 10,000 bopd. With major
preparatory work concluded for the Ogo appraisal drilling programme and
well locations selected, funding discussions are currently underway with
industry partners.

In the period ended 30, June 2020, Lekoil renewed its offtake agreement
with Shell Western Supply and Trading Limited for two years and included
the provision of a $3.5 million prepayment facility to aid short term
liquidity. The facility, which is repayable from future crude oil
liftings, has a tenor of five months and charges a market margin over
LIBOR.

“Despite the challenges of the first six months of the year, we have
navigated this demanding period with steady production and cash flow
generation from Otakikpo while implementing a range of significant cost
reduction initiatives across our operations,” Lekan Akinyanmi, LEKOIL’s
CEO noted.

However, net loss for the period stood at $7.9 million as against $5.2
million in the comparable period in 2019 while administrative and
general expenses significantly reduced to approximately $1.0 million.
Total outstanding debt financing, net of cash, stood at US$15.6 million,
as at 30 June 2020.

According to Akinyanmi, “We are excited and encouraged by the interest
received and the progress made towards raising the requisite financing
to develop our high quality portfolio of assets and delivering on our
drive to unlock the significant value that exists within them. We remain
committed to creating value and generating attractive returns for our
shareholders, our partners, employees and all our stakeholders,”

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