Receipt of Nigerian Ministerial Consent for Otakikpo Farm-In
Lekoil (AIM: LEK), the oil and gas exploration and development company with a focus on Nigeria and West Africa more generally, is pleased to announce that the Honourable Minister of Petroleum Resources of Nigeria has granted consent to complete the transfer of the 40 per cent. participating interest in the Otakikpo Marginal Field (“Otakikpo”) to Lekoil Oil and Gas Investment Limited (“LOGIL”), a wholly owned subsidiary of the Company. Lekoil now exercises the rights and benefits of its 40 per cent. economic interest in Otakikpo via the Farm-in Agreement and Joint Operating Agreement signed on 17 May 2014.
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. OML 11 is held by the Shell Petroleum Development Company Joint Venture which includes the Nigerian National Petroleum Corporation, the Shell Petroleum Development Company of Nigeria Limited, Total E&P Nigeria Limited and Nigerian Agip Oil Company Limited. Otakikpo was awarded to Green Energy International Limited (“Green Energy”) by the Department of Petroleum Resources of Nigeria in 2011.
The consideration for the acquisition of LOGIL’s interest in Otakikpo comprised a signature bonus of US$7 million, which was paid to GEIL in May 2014 and a production bonus of US$4 million which is payable on meeting certain production milestones. Operations are at an advanced stage to ensure that Otakikpo attains first oil around mid-year 2015 and the Company expects to provide an operational update shortly.
Lekan Akinyanmi, Lekoil’s CEO, said, “Having signed the farm-in agreement with Green Energy last year, we welcome the progress that has been made to date and are delighted to have received ministerial consent ahead of first oil which is scheduled to begin in the coming weeks. Otakikpo is an asset with tremendous potential and I am delighted that Lekoil has been able to demonstrate its ability as a strong Technical and Financial partner.
We continue our hard work at site, with our partners, to deliver first oil for the benefit of our host communities, regulators and stakeholders.”