*** Continues to run effectively, successfully implemented cost reduction measures
*** OPL 310 site survey completed
LEKOIL, the oil and gas exploration and production company with a focus on Nigeria and West Africa has requested and received a three-month extension to the filing deadline for its audited financial results for the year ended 31, December 2019 AIM Regulation.
The extension, which allows the LEKOIL until 30 September 2020 to finalise and publish its 2019 Audited Annual Results, was sought due to the disruptions of work practices, particularly for the Company’s auditors, caused by the COVID-19 pandemic. The Company intends to publish its 2019 Audited Annual Results in advance of 30 September 2020, with the current target of July 2020.
LEKOIL implemented general and administrative cost reduction measures Also, constructive discussions regarding restructuring of current loans to reduce quarterly amortisation is ongoing.
It renewed offtake agreement with Shell Western Supply and Trading Limited for at least another year with potential to extend for a further year following the provision of a prepayment facility. Production has been sustained. Average production for the first five months of the year was 5,755 bopd gross with 2,302 bopd net to LEKOIL Oil and Gas Investments Limited (“LOGL”). LOGL is a wholly owned subsidiary of Lekoil Nigeria Limited, which the Company has a 90 per cent. economic interest.
LOGL has lifted 372,136 barrels in equity crude this year through its nominated offtaker, Shell Western Supply and Trading Limited. The last lifting occurred on 25 May 2020 with cash proceeds of $2.7 million received by the Company on 25 June 2020. The next lifting, of a similar quantity, is expected to occur in mid July 2020.
Despite the wider impact of COVID-19, operations continue to run effectively. For the first five months of the year, production at Otakikpo averaged 5,755 bopd gross with 2,302 bopd net to LOGL. LOGL reported revenue of US$13.9 million over the same period, which represents LOGL’s share of crude oil sales from its Otakikpo operation during the period (“equity crude”). LOGL lifted 372,136 barrels in equity crude this year in three liftings through its nominated offtaker, Shell. The third lifting for the year occurred on 25 May 2020, with cash proceeds of US$2.7 million received by the Company on 25 June 2020 in line with the offtake agreement.
“Cashflows generated at Otakikpo in conjunction with our significant cost reduction initiatives have been key for us as we remain committed to creating value for our shareholders. We will continue to proactively review options for further cost savings where appropriate. We are working closely with all our partners, including GEIL and Optimum, in these challenging times to deliver on our joint ambitions. We thank all of our shareholders for their continued patience which we have every confidence will be justified, especially as the wider outlook improves,” Lekan Akinyanmi, LEKOIL’s CEO, commented.
LEKOIL also announced that the site survey on OPL 310 has been completed. With the site survey completed, Optimum Petroleum Development Company and LEKOIL can finalise the selection of the appropriate rig to commence appraisal drilling..
