Lekoil Limited First Lifting and Production Update (6956E)
May 10 2017 - 1:00AM
UK Regulatory
TIDMLEK
RNS Number : 6956E
Lekoil Limited
10 May 2017
10 May 2017
LEKOIL Limited
("LEKOIL" or the "Company")
Otakikpo Operational Update
First Cargo Lifted from FSO Ailsa Craig
LEKOIL (AIM: LEK), the oil and gas exploration, development and
production company with a focus on Africa, is pleased to announce
that the first crude cargo produced from the Otakikpo Marginal
Field ("Otakikpo") in OML 11 has been lifted from the FSO Ailsa
Craig by Shell Western Supply and Trading Limited ("Shell
Trading"), a subsidiary of Royal Dutch Shell (LSE: RDSA, RDSB).
120,000 barrels of gross production have been lifted. Under the
terms of the Crude Sales Agreement with Shell Trading, the Company
is due to receive its payment for this crude within the next
month.
Current production at Otakikpo is approximately 5,000 bopd. With
the commencement of regular liftings, the Company is focused on
ramping up to production of 10,000 bopd, now expected to be by
year-end. Key components to achieve this Phase 1 milestone involve
completing the expansion of onsite storage capacity - currently
being undertaken with minimal capex required - and utilising a
higher capacity shuttle tanker.
Non-operational days from the minor reconfiguration and
optimization of offshore infrastructure has led to average
production of approximately 3,000 bopd from the four production
strings across both wells (Otakikpo-002 and -003) since the start
of commercial production, announced on 20 February 2017.
Lekan Akinyanmi, LEKOIL's CEO, said: "Selling our first oil
marks the commencement of cash flow from Otakikpo. Dollar receipts
will increase as we further ramp up production to our Phase 1
target of 10,000 bopd and will contribute to funding Phase 2
expansion. The production and now offtake and export sale from the
FSO Ailsa Craig is the culmination of our team's hard work over the
last two years to bring Otakikpo into revenue generating
production. I would again like to thank the entire team that has
worked so hard on this project, our partner Green Energy, FSO owner
and operator Amni, our contractors, our host communities and our
government regulators for their continuing support."
For further information, please visit www.lekoil.com or
contact:
LEKOIL Limited
Alfred Castaneda, Investor Relations
Hamilton Esi, Corporate Communications
+44 20 3434 5800
+44 20 7920 3150
Strand Hanson Limited (Financial & Nominated Adviser)
James Harris / James Spinney / Ritchie Balmer
+44 20 7409 3494
Mirabaud Securities LLP (Joint Broker)
Peter Krens / Edward Haig-Thomas
+44 20 7878 3362 / +44 20 7878 3447
BMO Capital Markets (Joint Broker)
Jeremy Low / Neil Haycock / Thomas Rider
+44 20 7236 1010
Tavistock (Financial PR)
Simon Hudson / Barney Hayward
+44 20 7920 3150
Background to Otakikpo
Otakikpo is sited in a coastal swamp location in oil mining
lease (OML) 11, adjacent to the shoreline in the south-eastern part
of the Niger Delta. LEKOIL Nigeria exercises the rights and
benefits of its 40% Participating and Economic interest in Otakikpo
via the Farm-in Agreement and Joint Operating Agreement signed on
17 May 2014 with Green Energy International Limited ("GEIL"), the
Operator.
The Company holds 90% of the economic interests in LEKOIL
Nigeria. LEKOIL Limited's economic interest in Otakikpo therefore
equates to 36%. The Otakikpo Joint Venture (LEKOIL as Financial and
Technical Partner to GEIL) began operations in December 2014.
Ministerial consent was granted by the Honourable Minister of
Petroleum Resources of Nigeria in June 2015. LEKOIL funded the
costs of development and is entitled to recover this expenditure
preferentially from 88 per cent. of production cash flow from
Otakikpo.
The Otakikpo Field Development Plan consists of two phases.
Phase 1 comprises the recompletions of two wells, Otakikpo-002 and
Otakikpo-003, with the installation of an Early Production Facility
of 10,000 bopd capacity and export via shuttle tanker. Phase 2
covers the subsequent incremental development of the rest of the
field with a new Central Processing Facility and new wells
expected. Otakikpo commenced commercial production in production in
2017
-ends-
This information is provided by RNS
The company news service from the London Stock Exchange
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