Oil and gas exploration firm, Lekoil Limited, has announced that it has entered into an agreement with Optimum Petroleum Development Company, operator of Oil Prospecting Licence (OPL) 310 Licence on postponing its financial and operational obligations due in February 2020.
According to a statement from the company, the decision is “pursuant to the Cost Recovery and Sharing Agreement executed between LEKOIL and Optimum in August 2019.”
The firm had in the first week of January said it had secured $184 million loan to fund the appraisal drilling and initial development programme works on the Ogo Field within OPL 310 offshore Nigeria.
However, the firm suffered a major setback to its ambition of developing its main asset last Tuesday, after the $184 million loan deal it was sourcing from Qatar’s sovereign wealth fund for that purpose was discovered to be a fraud.
In the days that followed, the discovery had far-reaching reverberations on the company’s shares on London’s AIM, investors’ confidence and threatened its ability to transform its oil asset off Nigeria’s coast optimally.
Bahamas-based consultancy, Seawave Invest, alleged by Lekoil to have taken $600,000 in fees for midwifing the deal, has said it is making preparations to clear its own side of the story, Financial Times said.
The purported scandal, said to be one of the most outrageous to hit London’s AIM in more than a decade, had been deftly orchestrated by persons masquerading as Qatar Investment Authority officials whom Lekoil itself said had “constructed a complex facade”.
A massive deal for a company of this scale, the $184 million loan is said to be far greater than the company’s market capitalisation.
According to the original arrangement, Lekoil was expected to pay a portion Optimum Petroleum’s sunk costs and consent fees (earlier priced at $10 million) and present proof of its capacity to fund 42.86 per cent of the expenditure for the drilling of the first appraisal well in February 2020 (estimated at additional $28 million).
Lekoil’s chief, Lekan Akinyanmi remarked “We remain excited about the opportunities of OPL 310 and are focused on securing the necessary funding under the revised schedule. We are grateful for the support and commitment shown by our partner Optimum, the Operator of the OPL 310 License. This alignment with our partner is crucial in unlocking significant value for all our investors and stakeholders.”
Between them, Lekoil and Optimum Petroleum have agreed the final payment of $9.6 million to Optimum, which includes sunk costs and consent fees as shown in the breakdown below:
- The sum of US$2.0 million to be paid on or before 20 March 2020.
- The sum of US$7.6 million to be paid on or before 2 May 2020.
The two firms also agreed that Lekoil’s obligation to present proof of its capacity to finance 42.86% of the costs and expenses for the drilling and appraisal well on OPL 310 be deferred till July 2020.
Optimum Petroleum’s Managing Director, Yusuf K. N’jie, 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 programme for OPL 310 which we truly believe is a world class strategic asset.”