Lekoil agrees financial obligations delay for Ogo with Optimum

Lekoil has reached an agreement with Optimum Petroleum, the operator of the OPL 310 license which includes the Ogo discovery, on deferring the company’s financial and operational obligations due during February 2020.

Lekoil said on Wednesday that the company’s obligations were pursuant to the cost recovery and sharing agreement between Lekoil and Optimum signed in August 2019.

Under the agreement, the company was required to pay a portion of Optimum’s sunk costs and consent fees, previously estimated at $10.0 million, as well as provide evidence of its ability to fund 42.86 percent of the costs and expenses for the drilling of the first appraisal well during February 2020 – estimated at a further $28 million.

Optimum and Lekoil agreed that the final payment of $9.6 million to Optimum for sunk costs and consent fees would be paid in two installments. Namely, a sum of $2 million will be paid on or before March 20, and the remaining $7.6 million will be paid on or before May 2.

The two companies also agreed that the obligation for Lekoil to provide evidence of its ability to fund 42.86 percent of the costs and expenses for the drilling of the first appraisal well on OPL 310 would be deferred until July 2020.

Yusuf K. N’jie, managing director of Optimum, said: “We are pleased to continue to support Lekoil by deferring their obligations which were due this quarter. We remain confident in Lekoil’s ability to by July this year, raise the financing that is required for the commencement of the appraisal drilling program for OPL 310 which we truly believe is a world-class strategic asset.”

Lekan Akinyanmi, Lekoil’s CEO, added: “We remain excited about the opportunities of OPL 310 and are focused on securing the necessary funding under the revised schedule. This alignment with our partner is crucial in unlocking significant value for all our investors and stakeholders.”

Lekoil also stated that an investigation committee was set up earlier this month to investigate the origination and execution of the facility agreement. The investigation is underway and an update will be provided once the investigation has concluded.

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