Lekoil Limited, an exploration and production (E&P) company, has secured $184 million for the appraisal drilling and initial development programme for its Ogo field located in Oil Prospecting Lease (OPL) 310.
The company with a focus on Nigeria and West Africa, saidLekoil Limited, a subsidiary of Lekoil, entered into a loan agreement with the Qatar Investment Authority, the sovereign wealth fund of the State of Qatar (QIA) for $184 million.
According to Lekoil, the facility will be disbursed in five tranches over 11 months, with the first drawdown intended to occur in February 2020. The company looks forward to providing further details on the intended work programme in short order. The drawdown in tranches of the funds under the terms of the facility is expected to enable Lekoil to meet the costs commitments under the envisioned work programme as they arise.
The loan, which has a tenure of seven years from the date of first disbursement, is secured against, among others, the shares and assets of Lekoil Limited and Mayfair Assets and Trust Limited and includes a moratorium on both the interest and principal repayments commencing from the date of the Facility until six months after the commencement of commercial sale of production from the field.
Repayment of the principal and interest will occur subsequently, in equal installments, on a semi-yearly basis, Bajomo added.
Lekoil holds its interest in OPL 310 through Mayfair and Lekoil. The facility is not secured against any other assets or interests of the company, including its interest in the producing Otakikpo marginal field.
The yearly interest rate payable on amounts drawn under the Facility is 3.72 per cent with an upfront fee of 2.75 per cent of the amount drawn under the facility, payable upon drawdown of the facility, the company added.
It also noted that a Debt Service Reserve Account will be established 12 months after the end of the moratorium period with a one-off amount equal to six months of debt service standing to its credit. The Company will be required to meet a number of covenants on an ongoing basis in order for the Facility to remain in good standing, and adhere to QIA’s policies on procurement, environment and social responsibility and anti-corruption.
The Facility is subject to event of default clauses, and a provision that the employment of the Company’s CEO cannot be terminated without good cause during the term of the Facility, the company said.
The Facility was arranged by Seawave Invest Limited, an independent consultancy firm that specializes in cross-border transactions with an exclusive focus on Africa. After deducting the commission payable to Seawave by LEKOIL for arranging the Facility, and the upfront fee payable by LEKOIL to the QIA as set out above, the net proceeds of the Facility available to the Company are approximately $174.3 million.
Ogo-1 and Ogo-1 were drilled in 2013, which encountered hydrocarbons. LEKOIL and the Operator of the OPL 310 Licence, Optimum Petroleum, are envisaging a two-well programme with the objective of obtaining dynamic flow data from well test while preserving the drilled wells as producers. It is envisaged that first well spud could occur in second half (H2) of 2020.
