Lekoil Limited (LEK.L) Corporate update

LEKOIL (AIM: LEK), the oil and gas exploration and production company with a focus on Nigeria and West Africa, notes that Lekoil Nigeria Limited has, with respect to Lekoil Oil and Gas Investments Limited (“LOGI”), released LOGI’s annual report and financial statements for the year ended 31 December 2020.

LOGI is a subsidiary of Lekoil Nigeria Limited. LOGI’s primary asset is an interest in the Otakikpo Marginal field located within OML 11.

Operational Highlights

· Production levels averaged approximately gross 5,062 bopd, (2,025 bopd net to LOGIL) in 2020.

· Total production from the Otakikpo Marginal field for the year 2020 at 887,811 barrels net to LOGIL (31 December 2019: 677,788 barrels).

· Total cumulative production on the Otakikpo Marginal field from inception of production in December 2016 through to 31 December 2020 is 7.37MMbbls.

· The planned Phase 2 development consists of a five to seven well drilling program and targets the increase of gross production to about 15,000 to 20,000 bopd (6,000 – 8,000 bopd net to LEKOIL Nigeria).

· The Company is in active discussions with financiers to raise funds, in relation to its share of the required funding of the upstream drilling program for the next phase of the Otakikpo marginal field development.

· The Otakikpo Joint Venture has also concluded the contractual process for the drilling program and contract has been awarded.

· Site preparation for the drilling of two additional wells has begun as part of phase 2 development. Drilling contract for two wells awarded while we expect rig mobilization within the first half of 2022. The two new wells are expected to increase gross production to 10,000 bopd.

Financial Highlights

· Total revenue for 2020 is NGN12.5 billion or US$32.9 million (31 December 2019: NGN15.2 billion or US$42 million) which includes NGN429 million or US$1.1 million earned from storage, handling and exportation services provided to Ubima Joint Venture based on an agreed lifting arrangement.

· The company lifted 839,341 barrels for the year 2020 (31 December 2019: 634,407 barrels), realizing an average sales price of approximately US$35.8 per barrel.

· Profit for the year of NGN320 million (US$845,000) (2019: profit of NGN1.3 billion or US$3.5 million).

· Cash and bank balances of NGN1.1 billion (US$2.8 million) as of 31 December 2020 (31 December 2019: NGN270 million or US$744,000). Cash balance (including restricted balance held in Debt Service Reserve Account) on 31 August 2021 of US$8.2 million.

· As of 31 December 2020, total outstanding debt financing, was NGN5.4 billion or US$14.2 million (31 December 2019: NGN6.96 billion or US$19.2 million).

Lekan Akinyanmi, LEKOIL Nigeria’s CEO, commented, “We are focused on maximizing production at Otakikpo, a major asset in Lekoil Nigeria’s portfolio. We working to secure the required funding to achieve incremental production at Otakikpo with the aim to increase average daily gross production to 10,000 bopd to generate attractive returns to all our stakeholders.”

The release can be viewed at https://www.londonstockexchange.com/news-article/market-news/lekoil-oil-and-gas-inv-limited-fy-2020-results/15125096

Lekoil Limited makes no representation as to the accuracy of the published accounts, which have been published by Lekoil Nigeria, and reserves it’s rights with respect to their accuracy.

For further information, please visit www.lekoilplc.com

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