Nigeria-focused explorer Lekoil (LEK), fresh from last year’s discovery of the giant Ogo oil and gas field containing some three quarters of a billion barrels of oil-equivalent resources, has acquired an interest in a second project.
The company has agreed to purchase a 40 per cent economic interest in the Otakikpo marginal field from a local Nigerian firm, which in turn optioned the land a few years earlier from a group including Nigeria’s state-owned oil company, Royal Dutch Shell and France’s Total. Otakikpo lies in a swamp in the eastern part of the Niger Delta and benefits from attractive tax breaks. The field also comes with contingent reserves of some 36m barrels of oil and 31bn cubic feet (bcf) of gas.
Under the terms of the agreement, Lekoil will pay up to $11m (£7m) in cash and spend approximately $67m on an initial work programme to put the licence into production within 12 to 18 months. The company expects to fund most of the work programme through a reserve-based lending facility, but is also placing up to 33m new shares at an as-yet-undetermined price with certain existing and new institutional investors.
