Lekoil Updates its Operations & Increases FBN Facility

Source: www.gulfoilandgas.com 9/15/2016, Location: Africa

LEKOIL, the oil and gas exploration and development company with a focus on West Africa, announces an update on the operations at Otakikpo and its existing FBN Capital Limited (FBN) facility.

Otakikpo Operational Update

In addition to Otakikpo-002, Otakikpo-003 has now been completed and the rig has been demobilized. With Otakikpo-003 complete, the Company has four production strings ready for production. Onshore facilities are complete while welding and installation work continues to progress on the offshore pipeline. The Company expects commercial production to begin at Otakikpo in the next few weeks. The Company is targeting production of 10,000 bopd by year-end 2016 and will then proceed to phase two of the Otakikpo Field Development Plan, bringing aggregate production to a target of 20,000 bopd by the end of 2017, subject to requisite approvals.

FBN Facility Update

LEKOIL has increased the 2 billion Naira tranche of its two tranche facility arrangement with FBN, announced on 20 June 2016, to 4.5 billion Naira (totalling approximately US$14.8 million at the current Central Bank of Nigeria exchange rate of 305NGN:1USD). The terms of the facility, including the US$10 million tranche, announced concurrently on 20 June 2016, remain unchanged. The proceeds from the increase, along with cash on hand, are being used to complete infrastructure at Otakikpo prior to the commencement of commercial production.

Following the completion of this transaction, LEKOIL has total debt facilities on its Otakikpo oil field of:

• US$24.8 million two-tranche facility with FBN, which includes the previously refinanced US$10 million facility and the now upsized 4.5 billion Naira-denominated tranches. The Company has fully drawn on this facility.
• 5 billion Naira facility with Sterling Bank plc (approximately US$16.4 million). The Company has drawn down 1 billion Naira on this facility (or US$3.3 million)

The Company has the flexibility to pay a portion of its costs in Naira, and expects to draw down on these Naira facilities as needed. Both facilities from FBN and Sterling feature no pre-payment penalty.

For more information about related Opportunities and Key Players visit West Africa Projects


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