LEKOIL (AIM: LEK), the Africa-focused oil and gas exploration, development and production company, is pleased to announce that pursuant to a letter dated 4 September 2019, the Federal Government of Nigeria and the Ministry of Petroleum Resources has approved the extension of OPL 310’s (“the Block”) exploration licence for three (3) years, subject to the holders of the licence paying an extension fee of US$7.5m (“Extension”) within 90 days effective from 2 August 2019. The Company expects to fund 100 per cent of the licence fee from a mix of existing financial resources and a Potential Funding Partner as previously announced on 30 August 2019.
Both Optimum Petroleum Development Company (“Optimum”) and LEKOIL Nigeria Limited1 (acting through its wholly owned subsidiary, Mayfair Assets and Trust Limited) have agreed to progress the appraisal of the Block and subsequent conversion to an Oil Mining Licence (“OML”) at the end of the exploration period, as soon as practicable. Following a successful appraisal, a full field development (“FFD”) programme will be undertaken for which, LEKOIL and Optimum are in advanced discussions with a Potential Funding Partner.
Lekan Akinyanmi, LEKOIL’s CEO, commented, “We are pleased to be working efficiently with Optimum and the Nigerian Department of Petroleum Resources to ensure timely approvals for our upcoming drilling and work programme(s) and we now look forward to unlocking significant value from the asset for all stakeholders, who we thank for their continued patience and support through this prolonged process.”
LEKOIL Limited is entitled to 90% of the economic benefits related to LEKOIL Nigeria Limited’s operations and net assets based on the terms of agreements under which the entity was established.