Lekoil Limited Cost Reduction Measures and Optimum Payment (7111I)
03 April 2020 - 5:00PM
UK Regulatory
TIDMLEK
RNS Number : 7111I
Lekoil Limited
03 April 2020
3 April 2020
Lekoil Limited
("LEKOIL" or the "Company")
Cost Reduction Measures and Confirmation of Optimum Payment
LEKOIL (AIM: LEK), the oil and gas exploration and production
company with a focus on Nigeria and West Africa, provides the
following corporate update:
Cost Reduction Measures
With the current significant drop in oil prices from recent
levels, the Board has approved the immediate and accelerated
implementation of the Company's general and administrative
("G&A") cost reduction measures. These measures are targeting
an annual reduction of US$8.0 million or at least 40% in G&A
costs, which is inclusive of a reduction in staff numbers. The
Company has commenced the immediate execution of these measures
which will be completed within the next four to six weeks.
Production from Otakikpo for the rest of this year will be
unaffected by these cost reduction measures.
Payment for OPL 310 Confirmed
Further to the announcement made on 25 March 2020, the Company
has received confirmation that the payment of US$2.0 million to
Optimum Petroleum Development Company ("Optimum"), the Operator of
the OPL 310 License, to cover the portion of sunk costs and consent
fees due on 20 March 2020, has been completed.
Change of Registered Office Address
With immediate effect, the Company's registered office address
has changed to Cayman Corporate Centre, 27 Hospital Road, George
Town, Grand Cayman KY1-9008, Cayman Islands.
Lekan Akinyanmi, LEKOIL's CEO, commented, "We have kept our
commitments on our world class asset, OPL 310, despite the
detrimental effects of the COVID-19 pandemic on the global economy
and the subsequent fall in oil price. With the implementation of
our cost reduction measures, we believe we are in a good position
to navigate this challenging period."
The information contained within this announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014. Upon the publication of
this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public
domain.
For further information, please visit www.lekoil.com or
contact:
LEKOIL Limited
Ore Bajomo, Investor Relations +44 20 7457 2020
Strand Hanson Limited (Financial &
Nominated Adviser)
James Spinney / Ritchie Balmer / Georgia
Langoulant +44 20 7409 3494
Mirabaud Securities Limited (Joint
Broker) +44 20 7878 3362 / +44 20
Peter Krens / Edward Haig-Thomas 7878 3447
Numis Securities Limited (Joint Broker)
John Prior / Emily Morris +44 20 7260 1000
Instinctif (Financial PR) +44 20 7457 2020
Mark Garraway / Dinara Shikhametova lekoil@instinctif.com
/ Sarah Hourahane
Background on OPL 310
In 2013, the first exploration well (Ogo-1) drilled by the OPL
310 partners - then consisting of Optimum, LEKOIL and Afren - was
the Ogo prospect, a four-way dip-closed structure in the Turonian
to Albian sandstone reservoirs. The drilling programme included a
planned side-track well (Ogo-1 ST) which aimed to test a new play
of stratigraphically trapped sediments at the basement of the Ogo
prospect. The Ogo-1 well encountered a gross hydrocarbon section of
524ft, with 216ft of net stacked pay whilst the Ogo-1 ST well
encountered the same reservoirs as Ogo-1 in addition to the
syn-rift section which encountered a 280 ft vertical section gross
hydrocarbon interval. Owing to well data collected from the two
wells, the partners estimated P50 gross recoverable resources to be
at 774 mmboe across the Ogo prospect four-way dip-closed and
syn-rift structure.
The information contained within this announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014. Upon the publication of
this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public
domain.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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