*As firm’s ordinary shares resume after suspension from trading on AIM
Lagos — Lekoil has lost out on the $184 million loan promised it by Qatar Investment Authority, QIA.
In a statement on Monday, the company said the new turn of events occurred after representatives of the QIA approached Lekoil’s advisers, questioning the validity of the agreement.
As a result, the company’s ordinary shares were suspended on Alternative Investment Market, AIM on Monday morning and resumed trading around 7.30 a.m on Tuesday.
Lekoil had on January 2, announced that it secured a $184million loan from QIA to fund the appraisal drilling and initial development programme activities on the Ogo field within OPL 310.
With the current doubts cast on the agreement by QIA, Lekoil is currently seeking to establish, alongside its legal counsel and nominated adviser, the full facts of the matter, and pending this clarification, according to a statement sent to SweetcrudeReports.
“The facility agreement can no longer be considered to be legally binding or enforceable and it should, therefore, be assumed that none of the funding, as set out in the announcement of 2 January 2020, will be forthcoming”, the statement said.
Lekoil said it continues to generate positive cash flows at the operational and corporate level, and will seek alternative funding for the future development of OPL 310 as a priority.
As previously announced on 30 August 2019, Lekoil is required to provide 42.86% of the cost of drilling and pay Optimum Petroleum Development Company Limited sunk costs and consent fees by February 2020 – a payment estimated at US$38 million.
Failure to make this payment on time may result in Lekoil and Optimum jointly seeking and agreeing on, a willing buyer to whom the transfer of Lekoil’s 17.14% participating interest in OPL 310, as well as all the financial obligations related to OPL 310 can be made.
The company further confirmed that no capital commitments have been made based on anticipated drawdowns, and that the company will cover the cost of the site survey (estimated at US$4 million) on OPL 310 as announced on 10 January 2020 from a mixture of existing cash resources and income from operations at Otakikpo.