Saviour Adugba with Wire Report
Lekoil Ltd, a Nigerian energy company is looking to raise the sum of $100m in order to start drilling its Ogo oilfield, the company’s chief executive has said per Reuters.
The energy company based in Lagos had earlier this year reached a deferred payment deal to maintain its stake in OML 310-Ogo’s sitting place after it found out that a $184m loan it intended to use for the buy was fraudulent.
Lekoil’s Chief Executive Lekan Akinyanmi noted that the energy company financed much of the preparation work in Ogo with monies realised from its Otakikpo producing field, and said that the company will start drilling work in Ogo as soon as it raises the needed money.
The company is in the market for a combination of both vendor financing and direct investment- an approach that Akinyemi describes as the most cost-effective approach to financing the drilling. He also says that he expects the oilfield to gulp $1bn for its development throughout its life cycle.
“We want Ogo to raise its own capital so that we can actually start to build cash…and maybe in a few years start to pay dividends,” Akinyanmi said. The chief executive also added that Otakikpo; Lekoil’s other oilfield produced 5,305 barrels per day (bpd) on an average last year, and yielded a total of $15-16 million in free cash.
Lekoil shares listed in the London Stock Exchange plunged in January after the company revealed details about the loan it supposed to be from the Qatar Investment Authority (QIA) that turned out to be a facade.
The company’s shares on Friday traded 2.46 pence which pales in comparison to its 11.14 pence price that it traded for in January before the revelation of the loan fraud.
In a related development, Lekoil posted a $12 million loss in 2019, compared to a 7.8 million loss in Q2 according to results published this week. The company’s cash balances dropped to $2.7m from $10.4m
The company also says it is planning to achieve a 40% reduction in their annual administrative and general expenses owing to the oil price crash this year.