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Lekoil Releases Production update on Otakikpo Marginal Field

LEKOIL an oil and gas exploration and production company with a focus on Nigeria and West Africa has announced operational and trading update in respect of the Otakikpo Marginal Field the Company’s sole producing asset.

Otakikpo Joint Venture is made up of Green Energy International Limited, the Operator of the Otakikpo Marginal Field, and the Technical Partner, LEKOIL Oil and Gas Investments Limited, a member of the LEKOIL Limited group. The joint venture operational update performance for the Otakikpo Marginal Field in OML 11 disclosed an average production for the five months starting 1 July 2020 stood at  4,519 bopd gross with 1,807 bopd net to LOGL (H1 2020: 5,676 bopd gross with 2,271 bopd net to LOGL). While For the full year 2020, average production levels are expected to be 5,150 bopd gross with 2,060 bopd net to LOGL.

The company said that For the five months starting 1 July 2020, the average production was 20% lower than for the average over the first six months of the year, mainly due to unscheduled deferment, including bad weather conditions and the replacement of damaged PLEM hoses, as well as due to Organisation of the Petroleum Exporting Countries (“OPEC”) production cuts imposed by the Department of Petroleum Resources (“DPR”), which is the Petroleum Regulatory Agency of the Federal Republic of Nigeria.

Up to 30 November 2020, LEKOIL has recorded net revenues of US$26.9 million, which represents LOGL’s share of crude oil sales from the Otakikpo operation during the year to date (“equity crude”), and has lifted 778,600 barrels in equity crude in the period in six liftings through its nominated offtaker, Shell Western Supply and Trading Limited (a member of the Royal Dutch Shell plc group of companies), while the seventh and next lifting is currently ongoing with net cash proceeds of US$4.0 million expected to be received shortly by the Company

The Company stated that it remains in discussions with offtake financiers to raise, according to its participating interest, its own portion of the required funding (US$10.0 million net to LOGL) for the next two wells on the field.

As at 30 November 2020, the Group further disclosed that it has an outstanding balance of external interest-bearing loans and borrowings of approximately US$15.7 million and a total cash balance of US$1.6 million, with US$1.3 million recognised as restricted cash. Trade and other payables, as at 30 November 2020, stood at US$28.4 million for the Group.

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