Lekoil Raises Fund for Development of Otakikpo Field

Ejiofor Alike

Lekoil, an African-focused oil and gas exploration and production company, which currently holds interests offshore Nigeria and offshore Namibia said it had completed a $37.7million fundraising for the initial work programme on the Otakikpo marginal field, offshore Nigeria.

The company said in a statement that “it has conditionally raised gross proceeds of approximately $37.7 million (approximately £22.4 million) through the placing of 33,000,000 new ordinary shares at a placing price of 67.75 pence per ordinary share with certain existing and new institutional and other investors via an accelerated book-build.

“The net proceeds of the placing are estimated to be$36.5 million (approximately £21.7 million) and will be used to fund the equity portion, anticipated to be approximately 20 per cent., of the $67 million initial work programme on the Otakikpo Marginal Field, in which, as also announced, Lekoil has acquired a 40 per cent participating interest and economic interest,” the statement added.

The company further stated that it intended to use the balance of the placing proceeds for general corporate and working capital purposes, including the payment of fees associated with the placing.

According to Lekoil, the placing has been conducted by Mirabaud Securities LLP and UBS Limited, acting as joint bookrunners and Ladenburg Thalmann & Co. Inc., acting as US Placing Agent.

“Following admission of the placing shares, the number of ordinary shares in issue will be 362,906,233. This figure may be used by shareholders as the denominator in the calculation by which they determine if they are required to notify the Company of their interest (or any change to their interest) in the company under the FCA's Disclosure and Transparency Rules,” the company said.

The Chief Executive Officer of the company, Mr. Olalekan Akinyanmi said the acquisition represented another important step for Lekoil.

“We are pleased with the continued support exhibited in this equity raise and remain committed to our strategy of growing the business in a diversified manner in terms of exploration, appraisal and near term production. Acquiring an interest in Otakikpo – an exciting near term production asset – represents another important step for Lekoil and we look forward to developing this asset,” he said. 

The company had earlier agreed to buy a 40percent participating interest in the Otakikpo field.

The field lies in a swamp location in Oil Mining Lease 11 (OML 11) adjacent to the shoreline in the eastern part of the Niger Delta.

Estimates for the field, according to the company, are 36 million barrels of oil and 31 billion cubic feet of gas.
The company targets to bring the field into production within 12 to 18 months of commencement of its work programme.