LEKOIL (AIM: LEK), the oil and gas exploration and development company with a focus on Nigeria and West Africa more generally, provides the following operational and trading update.
• H1 2019 average production was 5,822 barrels of oil per day (“bopd”), with 2,329 bopd net to LEKOIL Nigeria, compared to 2,042 bopd for the same period in 2018
• Downtime was zero days since the beginning of the calendar year 2019
• The Joint Venture partners remain focused on Phase Two of the Otakikpo Field Development Plan
• Production rates are expected to remain steady through 2019, with H2 2019 average production expected to be circa 5,800 bopd, with 2,324 bopd net to LEKOIL Nigeria
• One lifting is scheduled from the FSO Ailsa Craig in July of circa 350,000 barrels of oil
• Plans underway, subject to finalisation of funding, for a multi-well drilling programme
• 2019 full year costs, comprising of operating expenses and general administrative costs is expected to be in line with current market expectations; the Company remains focused on decreasing general and administrative costs by 25%
• Phase One capital expenditure for the full year is currently expected to be US$5.1 million, largely attributed to minor infrastructure upgrades at Otakikpo, which is in line with current market expectations. Approximately US$2.7 million of this was spent in H1 2019.
• Outstanding debt financing, less cash is expected to be US$4.5 million at year end
The Joint Venture partners remain focused on Phase Two of the Otakikpo Field Development Plan, with a Schlumberger-led consortium aiming to reach gross volumes of up to approximately 15,000 bopd to 20,000 bopd. The plan involves drilling up to five wells as well as expanding processing infrastructure. Site mobilisations are tentatively scheduled to begin in Q3 of 2019. Please refer to the Company’s announcement dated 1 July 2019 for further information on the Otatikpo MoU.