Extension of Director Loan

Source: www.gulfoilandgas.com 12/18/2020, Location: Africa

LEKOIL, the oil and gas exploration and production company with a focus on Nigeria and West Africa, announces that the Board of the Company has agreed on an amendment to the loan agreement with Mr. Olalekan Akinyanmi, a director of the Company, to extend the loan provided to him by the Company (the "Loan") for the 12 months to 9 December 2021.

The Loan represents the balance due on an unsecured loan of US$1.5 million granted to Mr. Akinyanmi on 9 December 2014. The Loan originally had a three-year term and bore interest at a rate of 90-day LIBOR plus 4% per annum. In September 2017, the Loan was extended for another three years to 9 December 2020 under the same terms and conditions.

As at 9 December 2020, the balance of the Loan was approximately US$1.9 million. The sum of US$400,000 has since been repaid to the Company by Mr. Akinyanmi and the independent Directors of the Board of the Company have agreed to extend the repayment of the balance of the Loan as follows:

· US$413,523 (or its Nigerian Naira equivalent) shall be repaid on or before 9th March 2021;
· US$404,052 (or its Nigerian Naira equivalent) shall be repaid on or before 9th June 2021;
· US$394,581 (or its Nigerian Naira equivalent) shall be repaid on or before 9th September 2021; and
· US$385,636 (or its Nigerian Naira equivalent) shall be repaid on or before 9th December 2021.

Interest will be charged at the rate of 90-day LIBOR plus a margin of 10%. Default interest shall begin to accrue on all overdue amounts at the stated interest rate with an additional annual premium of 4%. If any of the quarterly repayments above are missed, the Company can apply salary and bonuses payable to Mr. Akinyanmi towards the loan until it is extinguished.

The extension of the Loan, as described above, is a related party transaction under AIM Rule 13 of the AIM Rules For Companies. With the exception of Mr. Akinyanmi who is involved in the transaction as a related party, the independent directors of the Company consider that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.

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