Otakikpo Production Now at 7,000 bopd

14 September 2017 

LEKOIL Limited 

("LEKOIL" or the "Company")

Operations Update

Otakikpo Production Now at 7,000 bopd

LEKOIL (AIM: LEK), the oil and gas exploration, development and production company with a focus on Africa, is pleased to announce an increase in current production at the Otakikpo Marginal Field ("Otakikpo") in OML 11.  Since starting production on 20 February 2017 at an initial rate of 5,000 bopd, production has averaged approximately 5,500 bopd through 31 July 2017.  Current production at Otakikpo is now approximately 7,000 bopd.  The Company continues to focus on ramping up to Phase One target production of 10,000 bopd, which the Company still targets around year-end 2017. 

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Background to Otakikpo

Otakikpo is sited in a coastal swamp location in oil mining lease (OML) 11, adjacent to the shoreline in the south-eastern part of the Niger Delta. LEKOIL Nigeria exercises the rights and benefits of its 40% Participating and Economic interest in Otakikpo via the Farm-in Agreement and Joint Operating Agreement signed on 17 May 2014 with Green Energy International Limited ("GEIL"), the Operator.

The Company holds 90% of the economic interests in LEKOIL Nigeria. LEKOIL Limited's economic interest in Otakikpo therefore equates to 36%.  The Otakikpo Joint Venture (LEKOIL as Financial and Technical Partner to GEIL) began operations in December 2014. Ministerial consent was granted by the Honourable Minister of Petroleum Resources of Nigeria in June 2015. LEKOIL funded the costs of development and is entitled to recover this expenditure preferentially from 88% of production cash flow from Otakikpo.

The Otakikpo Field Development Plan consists of two phases.  Phase 1 comprises the recompletions of two wells, Otakikpo-002 and Otakikpo-003, with the installation of an Early Production Facility of 10,000 bopd capacity and export via shuttle tanker. Phase 2 covers the subsequent incremental development of the rest of the field with new wells. Otakikpo commenced commercial production in 2017.

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