LEKOIL (AIM: LEK), the oil and gas exploration and development company with a focus on West Africa, announces today the signing of a new US$11.5 million debt facility.
LEKOIL Oil & Gas Investments Limited, a wholly owned subsidiary of LEKOIL Nigeria Limited, has signed an agreement for a new US$11.5 million debt facility with FBNQuest Merchant Bank (“FBNQuest”) (the “Facility”). The Company has agreed to guarantee the obligations of Lekoil Oil & Gas Investments Limited pursuant to the Facility.
The Facility has a maturity of four years and is repayable quarterly with a margin of LIBOR + 10%. The Facility will be used primarily to pay all outstanding quarterly repayments (including principal and interest) due to Shell Western Supply and Trading Limited and payment of the license/lease extension fees on OPL 276 (as announced on 23 August 2019) and OPL 310 (US$7.5 million due by 31 October 2019).
The Company expects to draw down on the Facility as needed, which has no pre-payment penalty.
Lekan Akinyanmi, LEKOIL’s CEO, said, “I am delighted that we have agreed to this additional facility with FBNQuest, a key local lender in Nigeria. This facility provides us with increased flexibility at a cost of capital in-line with our existing facilities. We appreciate FBNQuest’s support and appreciate our growing long-term relationship with them.
LEKOIL Oil & Gas Investments Limited, a wholly owned subsidiary of LEKOIL Nigeria Limited commenced commercial production at the Otakikpo Marginal Field in Q1 2017. The company’s aim of ‘shaping the future of oil exploration in Africa’ moves one step closer.