Three wells drilled in the oil field encountered hydrocarbons in multiple intervals. 2D and 3D seismic analysis revealed reserve estimates considerably more than those available at the time of acquisition in May 2014.

As a result of the revision to anticipated production levels, the Otakikpo -002 and -003 wells have been reclassified as “Reserves –Approved for Development”. For the next phase of development, targeting a gross production of 15,000 to 20,000 bopd (6,000 to 8,000 bopd net to LEKOIL), definitive agreements have been executed which are made up of service agreements with Schlumberger and cover the comprehensive infrastructure upgrades and field management services in relation to the planned upstream drilling programme. The upstream oil drilling programme consists of the following:

As a result of the work put into the tendering process, LEKOIL Nigeria has driven down the cost of production, resulting in a break-even point of less than $30 per bbl (life of field basis). By continuing to explore new ways of reducing production costs we increase the long-term viability of the field – even in a low-price climate.

In addition, four exploration prospects within the onshore part of the Otakikpo acreage have revealed Stock Tank Oil Initially In Place (STOIIP) ranges. These are estimated to contain potential gross aggregate volumes of 331.6 mmbbl, with further potential in the southern (shallow water) portion of the field. We continue to analyse and evaluate these areas. The income from the field will be used to fund ongoing activities elsewhere in our portfolio.