Oil and gas exploration and production company, Lekoil 310 Limited, has secured $184 million funding to finance the drilling and all initial development plans on the Ogo field within Oil Prospecting Lease, OPL 310.
The company, which is focused on Nigeria and other West African countries, announced in a statement.
Purpose of the funds: Lekoil 310 Limited was said to have gone into an agreement for $184.0 million with Qatar Investment Authority which is the sovereign wealth fund of the State of Qatar.
According to the statement, the credit facility would over time be disbursed in 5 tranches with the first drawdown intended to occur in February 2020. The tranching of the funds is to enable Lekoil to meet the costs commitments during the programme.
Lekoil explained that tenure of thr facility from the first disbursement is seven years and that the shares and assets of Lekoil and Mayfair Assets & Trust Limited include a moratorium on both the interest and principal repayments. This would commence from the date of the Facility until six months after the commercial sale of production from the field.
[READ MORE: Lekoil secures $11.5 million facility)
The statement read: “Repayment of the principal and interest will occur subsequently, in equal instalments, on a semi-annual basis. LEKOIL holds its interest in OPL 310 through Mayfair and Lekoil 310. The Facility is not secured against any other assets or interests of the Company, including its interest in the producing Otakikpo marginal field.
“The annual 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 which is payable upon drawdown of the Facility.
“A Debt Service Reserve Account will be established twelve months after the end of the moratorium period with a one-off amount equal to six (6) months of debt service standing to its credit.”
Lekoil’s chief executive officer, Lekan Akinyanmi, said, “Following the recent achievements of the OPL 310 license extension and the securing of funding for the appraisal drilling and development programme, we are delighted to have made strong progress, as promised, towards the start of the appraisal drilling programme on Ogo.
“We will continue to work closely with our partner and the Operator of the OPL 310 License, Optimum Petroleum, as we pursue value for our shareholders.”
[READ ALSO: Lekoil to boost production output by listing on NSE)
What you should know: Oil Prospecting Lease (OPL) 310 is an offshore license. It is said to encompass the Ogo oil well located in shallow water offshore Lagos and has a considerable amount of oil deposit.
Lekoil Limited is an oil and gas company with presence in over four countries, including the USA, Cayman Island, and Nigeria. It was incorporated in 2010.