LEKOIL, the oil and gas exploration and production company with a focus on Nigeria and West Africa, notes the announcement from Lekoil Nigeria, dated 1 April 2022, offering to purchase the OPL 310 loan and to repay the outstanding amount under the Savannah Energy Investments Limited Convertible Facility Agreement.
The Company notes that neither offer is capable of acceptance without the Company being in breach of written legally binding obligations to Savannah. For that reason, the Company will not be accepting the offer.
“The offer by Lekoil Nigeria to purchase the OPL 310 loan and the outstanding amount under the Savannah Convertible Facility Agreement is not capable of acceptance as it would put the Company in breach of its legally binding contractual obligations to Savannah.
Furthermore, even if the offer was capable of acceptance, it is not clear that it would be a superior offer for the following reasons: (i) Lekoil Nigeria has not demonstrated the capability to fund the offer; (ii) it has not, since 2013, shown any evidence of the ability to fund the appraisal and/or development of OPL 310 (the licence for which is due to expire in August 2022 due to inactivity); (iii) it would be using Group cash to which the shareholders already have an entitlement to; and (iv) it has chosen to conduct the negotiation process by way of public announcement rather than private dialogue with the Company.
For these reasons, the offer should not be seen as a serious attempt to provide an alternative to the Company and its shareholders but as an attempt to muddy the waters prior to the Extraordinary General Meeting (“EGM”). I would encourage shareholders to vote by way of proxy at the EGM in favour of the resolution,” Anthony Hawkins, the Company’s Interim Executive Chairman commented.
