Lekoil provides 2015 operational and financial results

Lekoil-Photo-620x310

Lekoil, the Africa focused oil and gas exploration and production company with interests in Nigeria and Namibia, announces final audited results for the year to 31 December 2015. All figures are in US dollars unless otherwise indicated.

Highlights

Operational

— Converted a significant proportion of the 56.75mmbbls 2C Contingent Resources at Otakikpo to Proven (1P) and Proven and Probable (2P) Reserves in January 2015.

  • Phase 1 gross 1P Proved Reserves of 8.43 mmbbls (net to Lekoil: 3.03 mmbbls).
  • Phase 1 gross 2P Proved and Probable Reserves of 14.99 mmbbls (net to Lekoil: 5.40 mmbbls).
  • Phase 2 gross 2C unrisked Contingent Resources of 41.61 mmbbls (net to Lekoil: 14.98 mmbbls).

–   Received Nigerian Ministerial consent for Otakikpo farm-in in June 2015.

–  Successfully performed production tests at Otakikpo.

  • Production tested the lower E1 zone and flowed oil at various choke sizes for over 24 hours at a peak rate of 5,703 bopd at a 36/64 inch choke.
  • Production tested the C5 and C6 zones post period end in April 2016. The C5 zone flowed oil at a peak rate of 6,404 bopd at a 36/64 inch choke and the C6 zone flowed oil at a peak rate of 5,684 bopd at a 36/64 choke.

No material health and safety incidents experienced throughout the reporting period. Safety remains the highest priority to Lekoil.

Corporate

— Increased ownership of appraisal asset OPL 310, which includes the Ogo discovery, and became the technical and financial partner (subject to Nigerian Ministerial consent) of the block. Consolidated participating interest of 40% and an economic interest of 70%.

— Acquired a 62% economic interest in OPL 325, which is depositionally on trend with OPL 310 but 100km to the south.

— Appointment to the Board of Directors of Mr. Hezekiah Adesola Oyinlola as a Non-Executive Director on 26 June 2015.

Financial

— Executed a US$10 million 12-month bridge facility in May 2015 from FBN Capital to part fund initial development costs of Otakikpo.

— Completed a successful, oversubscribed equity fund raise of US$46 million in October 2015 to fund the OPL 310 and OPL 325 acquisitions and to provide additional working capital.

—   Cash and cash equivalents of US$26.0 million (2014: US$49.2 million) at period end.

— Refinanced existing US$10 million facility from for a term of three years and secured a new 2 billion Naira (US$ 10 million at a 199NGN:1USD exchange rate as of the disbursement date of 16 June 2016) with FBN Capital.

— Executed a new 5 billion Naira (US$17.7 million at a 284NGN:1USD exchange rate as of 29 June 2016) debt facility with Sterling Bank Plc. in June 2016. The facility has a term of three years and is subject to fulfillment of conditions precedent.

Samuel Adegboyega, Chairman, said, “At Lekoil, we believe our strategy to concentrate on low risk assets places us in the best possible position to manage the challenges a low oil price represents. By continuing to execute our strategic plan in a timely and e cient manner, we will ensure that our company will not just survive but thrive.”

Lekan Akinyanmi, Lekoil’s CEO, added, “As we transition into a producing company, we believe Lekoil will grow further in the coming years – even in a prolonged lower oil price environment. Our focus remains on growing our cash ow and production base at Otakikpo, appraising the signi cant Ogo discovery on the OPL 310 licence, exploring the possibilities in OPL 325 and subject to nancing being available, acquiring further assets that we consider will add value for the bene t of our shareholders.”