20th May 2014 12:53
LONDON (Alliance News) - Lekoil Ltd Tuesday said Lekoil Oil and Gas Investments Ltd, a subsidiary of Lekoil Nigeria Ltd, has agreed to acquire a 40% participating and economic interest in the Otakikpo Marginal Field, offshore Nigeria, from Green Energy International Ltd.
Lekoil is an oil and gas exploration and development company with a focus on Nigeria and West Africa.
Otakikpo lies in a swamp location offshore Nigeria, adjacent to shoreline in the eastern part of the Niger Delta.
Under the deal, Lekoil is required to pay USD7 million on signature to Green Energy, and a further USD4 million, contingent on production and receipt of ministerial consent to the transfer of the participating interest.
Lekoil is also required to fund an initial work programme for re-entry of the existing wells and all costs until commencement of production, with a base case estimate of approximately USD67 million.
The company said it believes that Otakikpo could be brought into production within 12 to 18 months of commencement of the work programme.
Lekoil also said it intend to place up to 33 million new shares, or around 10% of the company, with existing and new institutional and other investors, to fund the work programme and for general corporate and working capital purposes.
The company said it expects to fund approximately 70% to 80% of the work programme through a reserve-based lending facility from domestic banks.
The placing will be led by Mirabaud Securities LLP, with UBS Ltd as joint bookrunners.
In a separate statement Tuesday, Lekoil said it recorded a pretax loss of USD18.1 million in 2013, compared with a loss of only USD3.8 million the prior year, due to costs associated with its stock flotation during the year, and USD7.1 million in costs related to the terminated acquisition of an interest in OML 113 site, offshore Nigeria.
Lekoil shares were down 4.0% at 66.25 pence Tuesday afternoon.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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