Lekoil to raise N6bn for marginal field development

Lekoil Limited, an oil and gas exploration and development company, is set to raise the sum of $37.5 million, about N6 billion, through a special placing of 33,000,000 ordinary shares.

The company, in its half year 2014 financial statement presented to investors and the London Stock Exchange also disclosed that it is currently in discussions with a number of banks regarding provision of debt facilities for the development of the Otakikpo Marginal Field.
The statement was jointly signed by Mr. Samuel Adegboyega and Mr. Lekan Akinyanmi, Non-Executive Chairman and Chief Executive Officer, respectively.

According to them, the company intends to participate in marginal fields licensing rounds in Nigeria, as well as looking selectively to acquire interests being divested by International Oil Companies and National Oil Companies.

“We believe our ability to acquire, or farm into, such interests is underpinned by our in-house technical expertise and the experience our management team has gained with major International Oil Companies, service providers and in global financial markets,” they said.

They also said the company’s priorities are the appraisal of the Ogo discovery and the development of Otakikpo, adding that the company remained committed to building a substantial Africa focused exploration and production business, diversified by risk, maturity of assets and geography.

They said, “Lekoil’s strategy is to build an exploration and production group, diversified across lower risk production assets and appraisal projects and higher risk exploration assets, in both known exploration basins and newly discovered basins. Our business is focused initially on West Africa in general and Nigeria in particular.

“We continue to believe that our competitive advantage in Nigeria, achieved through our well respected Board and management team and our indigenous status, can act as the springboard allowing us to execute our broader strategy of becoming a multi asset exploration, development and production business in Africa.

“We seek to achieve our goals through the acquisition of promising under-developed and under-funded assets, supplemented by longer term exploration interests in overlooked oil basins.”

In the six months ended 30 June 2014, Lekoil recorded an operating loss of $5.3 million and exited the period with cash and short-term investments of $61.7 million.

The loss, the company said, was in comparison to $8.8 million for same period in 2013, adding that no dividends were paid or declared during the period.

The company explained that administrative expenses were $5.3 million, compared to $8.8 million for the same period in 2013.

“The reduction in administrative expenses is due to the one-off costs associated with the admission of the Group to trading on AIM during the previous corresponding period, albeit this was offset by an expected growth in expenses within the business as we continue to develop our existing assets and acquire new assets” the company said.

They further stated that the next phase of their exploration and appraisal programme on Oil Prospecting Licenses, OPL 310 commenced with the acquisition of additional 3D seismic to enhance their understanding of the Ogo discovery and the adjacent area.

They added that in May 2014, Lekoil and its partners completed an extensive 1,505 square kilometers of marine 3D seismic acquisition representing approximately 80 per cent of the acreage within OPL 310.

They said processing of the seismic data is ongoing with fast-track and time-migrated seismic volumes expected in Q4 2014, which will be followed by further drilling in 2015, adding that detailed well planning and engineering studies are underway in support of the appraisal drilling timeline.
 

-Culled from: http://www.vanguardngr.com