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Lekoil receives green light for Otakikpo well re-entry onshore Nigeria

16th December 2014

Lekoil, the technical and financial partner in the Otakikpo project (Lekoil 40 per cent participating and economic interest) and its partner Green Energy, have secured approvals for the well re-entry plan on the Otakikpo Marginal Field in oil mining lease (OML) 11

Lekoil, the technical and financial partner in the Otakikpo project (Lekoil 40 per cent participating and economic interest) and its partner Green Energy, have secured approvals for the well re-entry plan on the Otakikpo Marginal Field in oil mining lease (OML) 11

The company has also commenced a phased re-entry plan, fully funded with cash on hand, to reach production.

“We are now ahead of schedule to achieve our target of first production from Otakikpo, which is value enhancing despite the depressed oil price, during the first half of 2015,” said Lekan Akinyanmi, Lekoil CEO.

Earlier in the year, the company had announced that it expected to begin production in the second half of 2015. Based on the updated phased approach, Lekoil now expects production to commence in the first half of 2015, six months ahead of the previous schedule.

Under the terms of the acquisition of the interest in Otakikpo, Lekoil will fund costs to first oil and be entitled to recover this expenditure preferentially.

In September 2014, the company announced a significant upgrade to 2C oil reserves estimates for Lekoil Nigeria’s 40 per cent participating interest and economic interest in Otakikpo.

AGR TRACS International carried out a comprehensive review of the surface and subsurface data provided by Lekoil. Following the review, AGR TRACS reported that the gross un-risked 2C Contingent Resources for Otakikpo were estimated to be 56.75 mmbbl. This compares to the 36 mmbbl of gross oil resources in the most recent 2C resource estimates available at the time of the Company’s acquisition of the interest in Otakikpo in May 2014.

In addition, Stock Tank Oil Initially In Place (STOIIP) ranges have been estimated by AGR TRACS for four exploration prospects within the onshore part of the Otakikpo acreage and, in total, these are estimated (on a P50, un-risked basis) to contain potential gross aggregate Oil in Place volumes of 162.8 mmbbl. The company also believes that additional prospectively exists in the southern (shallow water) portion of the acreage which will be defined by further studies and appraisal in due course.

 “We have been very pleased with our progress on the development and look forward to learning more about the offshore area of the lease which we believe holds some exciting upside,” added Akinyanmi.

“We continue to accelerate our work with our partners, host communities and regulators to deliver on this valuable project and across our portfolio.”

 

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