A Review of the Nigerian Energy Industry

Lekoil seeks cash to fund proposed Nigerian acquisition

Oil drilling in Aje field16 September 2013, News Wires – London-listed Lekoil is in discussions with lenders to find the remaining cash to fund its proposed acquisition of a stake in Nigeria’s Aje field from Norwegian independent Panoro Energy.

The Nigerian company, which has agreed to buy the 6.502% stake in offshore block OML 113 from Panoro for $30 million, has so far coughed up $3 million of the purchase price and now has until 31 October to come up with the remainder.

The date was postponed from an earlier deadline of 15 September to deposit the full payment in an escrow account after Lekoil requested more time.

Lekoil has also issued an addendum to a bid bond that allows Panoro to draw an additional $3 million if the escrow is not funded by this date.

If the deadline is not met, Panoro can decide to cancel the deal and retain the down payment, as well as the $3 million bid bond, or grant a further extension.

The transaction, still subject to approval by the authorities, is expected to close on 9 November.

Lekoil chief executive Lekan Akinyanmi  said though “we look forward to completing the transaction and building out a robust portfolio of assets that leverages our technical study of the Dahomey basin and the discovery in the neighbouring OPL 310”.

The Aje oil and gas field in the Yinka Folawiyo-operated block, estimated to hold 198.7 million barrels of oil equivalent, is adjacent to OPL 310 in which Lekoil holds a 30% stake.

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