Lekoil has set out plans to raise a $184 million loan from the Qatar Investment Authority (QIA) to fund work on the OPL 310 area, offshore Nigeria.
Lekoil intends to use the cash to pursue appraisal work on the Ogo find, which was made in 2013. The minnow and Optimum Petroleum, the operator of the licence, intend to drill two wells on the field, with the first coming in the second half of 2020. The two appraisal wells are expected to become producers under a field development plan.
The QIA will provide $184mn in five tranches over 11 months, with the first payment coming in February. This facility runs for seven years and is secured against the shares of Lekoil 310 and Mayfair Assets and Trust. The debt is not secured against other of Lekoil’s assets, including its stake in the producing Otakikpo field.
Interest and principal repayments will only come due six months after the field has begun producing. The interest rate of the facility is 3.72% with an upfront fee of 2.75%. Lekoil said it would set up a debt service account to hold sufficient cash for six months’ worth of repayments.
“We are delighted to have made strong progress, as promised, towards the start of the appraisal drilling programme on Ogo,” said Lekoil’s CEO Lekan Akinyanmi. “We will continue to work closely with our partner and the operator of the OPL 310 License, Optimum Petroleum, as we pursue value for our shareholders.”
The debt was arranged by Seawave Invest. After paying the commission, and the upfront fee, Lekoil will have around $174.3mn.
Akinyanmi is pledging his entire shareholding as part of the security for the debt, although Lekoil has provided an indemnity to issue new shares to him, should the shares be seized. Lekoil has previously said that it owes its partner $4mn by February.