Optimum Petroleum Development (Optimum) has disclosed that it is $6.6 million short of receipt from Mayfair Assets and Trust (Mayfair), as a result of sunk costs and consent fees and that the company has also not paid more than $1million for G&A costs.
Mayfair is a subsidiary of Lekoil, a Nigerian company that has a 17.14% stake in the licence of Ogo oilfield (Oil Prospecting Licence 310).
A fraudulent $184 million loan announced by the parent company, Lekoil, at the beginning of the year to finance pre-operation activities at Ogo oilfield, still haunts the company. The shares of Lekoil plunged more than 70% in January 2020, following a suspension of trading, after the firm discovered that a $184 million loan it had announced was fraudulent.
The loan, which was arranged by Seawave Invest Limited, was meant to sort bills related to Ogo oilfield licence (Oil Prospecting Licence 310), as well as prepare the oilfield for operations.
A disclosure posted on the company’s website yesterday, 11th December indicates that the bills are not fully sorted yet and that unless Lekoil pays its bills at OPL 310, its 17.14% stake may be sold off. The company is also facing heated pressure from shareholder demands for board change.
Under the terms of the agreement on the licence, and if the bill cannot be paid, Optimum and Mayfair will jointly seek a buyer of the 17.14% stake. A new buyer would pick up the equity stake but also the financial obligations.
Thus, Optimum is seeking to enforce its default clause as payment of USD6.6 million to cover portion of sunk costs, and consent fees have not been received by the end of November.
To this effect, the operator of OPL 310, Optimum, has sent a letter to Mayfair on enforcement of the default clause.
What they are saying
Lekoil, in the disclosure on the company’s website, submitted that:
- “The company continues to discuss with Optimum, a deferment of these payments as the company intends to focus its financial and other resources in support of securing funding for the second phase of the Otakikpo development, as well as the Ogo appraisal programme. The company, working with Optimum, has identified and engaged an appropriate rig for the appraisal drilling, where the service provider has accepted the result of the early performed site survey.”
What you should know
- Lekoil Ltd – African oil exploration and production firm with interests in Nigeria and offshore Namibia.
- The company is listed on the London Stock Exchange (LSE).
- Lekoil also said it would hold an EGM on January 8. This was in response to demands from Metallon Corp., which holds a 15.4% stake in Lekoil.
- Zimbabwean gold miner Metallon has called for the removal of Lekoil’s chairman, Mark Simmonds, and the appointment of three new directors: Michael Onochie Ajukwu, Thomas Donald Richardson, and George Maxwell.
- The latter was the CEO of Eland Oil & Gas until Seplat Petroleum Development, a Nigerian oil firm listed on the Nigerian Stock Exchange (NSE) and LSE, acquired it.
- Lekoil has described Metallon’s pitch as an “opportunistic attempt to take control of the company without paying a premium for the value of the shares and the assets of the company to the shareholders”.
- The Lekoil board unanimously opposed the removal of Chairman Simmonds. Two of the three directors opposed the appointments of Ajukwu and Richardson; although, Tony Hawkins endorsed the choices. All three directors backed the appointment of ex-Eland Maxwell.