Otakikpo Update - Production Now at 7,600 bopd; Focus Shifts to Phase Two Programme

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 LEKOIL LIMITED (LEK) 
Otakikpo Update - Production Now at 7,600 bopd; Focus Shifts to Phase Two 
Programme 
 
01-Dec-2017 / 07:00 GMT/BST 
Dissemination of a Regulatory Announcement, transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
1 December 2017 
 
       LEKOIL Limited 
 
       ("LEKOIL" or the "Company") 
 
       Otakikpo Update 
 
     Production Now at 7,600 bopd; Focus Shifts to Phase Two Programme 
 
  LEKOIL (AIM: LEK), the oil and gas exploration, development and production 
       company with a focus on Africa, is pleased to announce an increase in 
   current production at the Otakikpo Marginal Field ("Otakikpo") in OML 11. 
   Since starting production on 20 February 2017 at an initial rate of 5,000 
   bopd, daily production levels have steadily increased through 27 November 
  2017. Average production for October was approximately 6,400 bopd. Current 
     production at Otakikpo from both wells is now approximately 7,600 bopd. 
 
   Additional perforations in one of two production strings at well-003 were 
    recently performed before subsequently re-opening it for production. The 
 Otakikpo Joint Venture Partners - LEKOIL as Financial and Technical Partner 
and Green Energy International Limited ("GEIL") as Operator - have agreed to 
hold production at current levels for a few more weeks to gather and analyse 
 essential production and reservoir data and information prior to increasing 
               production at the field. 
 
 As the Otakikpo field nears Phase One target production of 10,000 bopd, the 
 Joint Venture is now focused on Phase Two of the Otakikpo Field Development 
     Plan which aims to increase steady state production up to approximately 
  20,000 bopd. Phase Two includes 3D seismic coverage of the entire Otakikpo 
field, neighbouring prospects and the incremental development of the rest of 
       the field with new wells planned. Next steps will be to gather the 3D 
    seismic data, process and interpret the data and subsequently release an 
        updated Competent Person's Report. The Company expects the Phase Two 
    development to be fully funded by industry players, which the Company is 
               already in discussions with. 
 
  The Company has completed five liftings YTD and has received cash proceeds 
   within 30 days of each lift as prescribed by the terms of the Crude Sales 
   Agreement with Shell Trading. The Company has realised an average premium 
for the Otakikpo blend of $1 or more above Brent pricing since inception. At 
               current oil prices, the cash netback is above $30 per barrel. 
 
        For further information, please visit www.lekoil.com [1] or contact: 
 
             LEKOIL Limited 
 
 Alfred Castaneda, Investor         [phone] 
                  Relations 
 
                                    [phone] 
    Hamilton Esi, Corporate 
             Communications 
 
                     Strand Hanson Limited 
                    (Financial & Nominated 
                                  Adviser) 
 
                                             [phone] 
 
              James Harris / James Spinney 
                          / Ritchie Balmer 
 
    Mirabaud Securities LLP 
             (Joint Broker) 
 
                              [phone] / +44 
       Peter Krens / Edward             20 7878 3447 
                Haig-Thomas 
 
 BMO Capital Markets (Joint 
                    Broker) 
 
                                    [phone] 
  Jeremy Low / Neil Haycock 
             / Thomas Rider 
 
   Tavistock (Financial PR) 
 
      Simon Hudson / Barney         [phone] 
   Hayward / Charles Vivian 
 
The information contained within this announcement is deemed by the Company 
to constitute inside information as stipulated under the Market Abuse 
Regulation (EU) No. 596/2014 ('MAR'). 
 
               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 Operator. 
 
   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 began operations in December 2014. Ministerial 
    consent was granted by the Honourable Minister of Petroleum Resources of 
Nigeria in June 2015. LEKOIL funded the costs of development and is entitled 
 to recover this expenditure preferentially from 88% of production cash flow 
               from Otakikpo. 
 
       The Otakikpo Field Development Plan consists of two phases. Phase One 
    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 Two covers the subsequent 
   incremental development of the rest of the field with new wells. Otakikpo 
               commenced commercial production in 2017. 
 
       -ends- 
 
ISIN:           KYG5462G1073 
Category Code:  MSCH 
TIDM:           LEK 
OAM Categories: 2.2. Inside information 
Sequence No.:   4933 
 
End of Announcement EQS News Service 
 
634569 01-Dec-2017 
 
 
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December 01, 2017 02:03 ET (07:03 GMT)