Lekoil Limited Otakikpo Production Update (2598R)

TIDMLEK

RNS Number : 2598R

Lekoil Limited

08 December 2016

8 December 2016

LEKOIL Limited

("LEKOIL" or the "Company")

Otakikpo - Production Update

Oil flows to storage tanks ahead of evacuation by shuttle tanker

LEKOIL (AIM: LEK), the oil and gas exploration and development company with a focus on West Africa, is pleased to announce that oil is flowing at the Otakikpo Marginal Field to onshore storage tanks, where it will be evacuated upon completion of the offshore pipeline. All onshore facilities have been fully commissioned and signed off by the regulators, and the offshore pipeline leading from the storage tanks to the tanker offloading manifold is 80% complete.

Upon completion of the pipeline, the joint venture partners comprising of Green Energy International Ltd as Operator and LEKOIL as Technical Partner, expects to start transporting to the export terminal and subsequently, be able to gradually ramp up production to 10,000 bopd.

Lekan Akinyanmi, LEKOIL's CEO, said: "We're delighted to announce this key milestone from the Otakikpo field. I would like to thank the entire team that has worked so hard on this project, our partners Green Energy, investors, debt financiers, our host communities and our government regulators for their continued support."

For further information, please visit www.lekoil.com or contact:

 
LEKOIL Limited 
 Alfred Castaneda, Investor 
 Relations                                   [phone] 
 Hamilton Esi, Corporate Communications       [phone] 
Strand Hanson Limited (Financial 
 & Nominated Adviser) 
 James Harris / James Spinney 
 / Ritchie Balmer                            [phone] 
Mirabaud Securities LLP (Joint 
 Broker)                                      [phone] / +44 
 Peter Krens / Edward Haig-Thomas             20 7878 3447 
BMO Capital Markets (Joint 
 Broker) 
 Vicary Gibbs / Neil Haycock 
 / Thomas Rider                              [phone] 
Tavistock (Financial PR) 
 Simon Hudson / Barney Hayward 
 / Merlin Marr-Johnson                       [phone] 
 

Background to Otakikpo

Otakikpo is sited in a coastal swamp location in oil mining lease (OML) 11, adjacent to the shoreline in the south-eastern part of the Niger Delta. Lekoil Nigeria exercises the rights and benefits of its 40% Participating and Economic interest in Otakikpo via the Farm-in Agreement and Joint Operating Agreement signed on 17 May 2014 with Green Energy International Limited ("GEIL").

The Company holds 90% of the economic interests in Lekoil Nigeria. Lekoil Limited's economic interest in Otakikpo therefore equates to 36%. The Otakikpo Joint Venture (Lekoil as Financial and Technical Partner to GEIL) began operations in December 2014. Ministerial consent was granted by the Honourable Minister of Petroleum Resources of Nigeria in June 2015.

The Otakikpo Field Development Plan consists of two phases. Phase 1 comprises the recompletions of two wells, Otakikpo-002 and Otakikpo-003, with the installation of an Early Production Facility of 10,000 bopd capacity and export via shuttle tanker. Phase 2 covers the subsequent incremental development of the rest of the field with a new Central Processing Facility and new wells expected to bring production to 20,000 bopd.

Review by qualified person:

Samuel Olotu, Chief Technical Officer and expert for the Company, has reviewed and approved the technical information contained within this announcement in his capacity as a qualified person under the AIM Rules. Mr. Olotu holds a BSc degree in Geology and an MSc in Geophysics from the University of Ibadan, and has over 20 years' experience in the oil and gas industry (ranging from asset management, field development, reservoir management and seismic data processing and interpretation) in Nigeria, Europe, Middle-East and Asia. He is a member of the Society of Petroleum Engineers, Society of Exploration Geophysicists, the National Association of Petroleum Explorationists and the Nigerian Mining and Geosciences Society.

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December 08, 2016 02:00 ET (07:00 GMT)