LekOil raises US$46m for a new exploration asset in Nigeria

LekOil raises US$46m for a new exploration asset in Nigeria while gaining a 62% interest in 5.7bn barrels of prospective oil resources near the Ogo discovery via a US$40mln deal proactive investors reports

LekOil (LON:LEK) has confirmed it has now closed a US$46mln share placing to fund its acquisition of a controlling stake in a potentially high impact exploration asset in Nigeria.

Yesterday, in an after hours statement, the African oil and gas company announced it had agreed to buy a the stake in OPL 325, which is host to several large prospects amounting to 5.7bn barrels of estimated oil in place.

It is paying a total of US$40mln to acquire a 62% interest in the project; by acquiring 88.57% of the operator Ashbert Oil and Gas Limited, which owns 70% of OPL 325.

Initially, LekOil will pay US$16.08mln, which will cover a signature fee to the Nigerian Department of Petroleum Resources and further payments amounting to US$24.12mln will follow.

OPL 325, like the company’s 30% owned OPL 310 asset (hosting the Ogo discovery), is located in the Dahomey basin. LekOil also told investors it is in discussion with the administrators of Afren over the potential acquisition of its 40% interest in OPL 310.

The company highlights that prospects within OPL 325 were identified in its proprietary Dahomey Basin study, which also previously highlighted OPL 310, and it has already completed preliminary interpretation of existing 3D seismic data of the area.

Lekan Akinyanmi, LekOil chief executive, said: “The acquisition of an interest in OPL 325, nearby and on trend to our existing interest in OPL 310, represents an excellent low cost opportunity to extend our footprint in the overlooked but prospective Dahomey Basin in Nigeria.

“It is precisely in line with our stated strategy to create a balanced portfolio of assets.

“With the completion of these acquisitions Lekoil will have acquired a substantial resource base in the Dahomey Basin.”

LekOil is to issue 125.2mln new shares priced at 24p each via the share placing to new and existing investors.

It is raising US$44.3mln of net proceeds. The cash was raised via an accelerated book-build, organised by Mirabaud Securities and BMO Capital Markets.

An initial tranche of 37mln new shares is expected to be issue on November 2. The remainder of the placing must be approved by shareholders at an EGM, slated for November 16.

It is anticipated that the remainder of the new shares will be issued and admitted to trading on AIM by November 18.

The company added that any deal to acquire Afren’s OPL 310 stake would be funded by existing cash resources.

Shares rose 3% to 25.75p.

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