LekOil’s (LON:LEK) main focus of 2015 is the development and monetisation of the Otakikpo field as well as the continued de-risking of the Ogo discovery, though chief executive Lekan Akinyanmi sees other opportunities to grow.
The African oil firm, which today released its results for 2014, is relatively well cashed compared to its peers, with US$49mln at the end of December, and Akinyanmi expects the current turbulence in the sector will throw up acquisition possibilities.
“Given the current low oil price environment and capital constraints for many smaller E&P companies, we expect to see many more opportunities over the course of the next 12 months,” he said in a statement.
LekOil acquired a 40% stake in the Otakikpo Marginal Field which has production coming online in the coming months and as such is one key focus for the company.
Otakikpo has around 15mln barrels of proved and probable (2P) oil reserves, as well as 41mln barrels of contingent resources.
Economic evaluations conducted in 2015 indicate the first phase of the project would be worth US$77mln net to LekOil (based on a sub-US$40 oil price scenario). This valuation would rise further to over US$85mln if the project is awarded ‘provisional pioneer status’ by the authorities, as it would provide additional tax related benefits.
The initial development is being supported by a US$10mln twelve-month facility from FBN Capital.
Ogo, the offshore discovery made in late 2013, is another key focus for LekOil. Currently some 1,505 square kilometres worth of 3D seismic data is being worked on, following an acquisition programme last May.
Fast-track results from the seismic programme are described as ‘encouraging’ and LekOil expects to have the full results later this year.
The pre-revenue exploration and development company reported a US$11.9mln loss for the twelve months to December 31 2014, and revealed it had US$49.2mln of cash and equivalents at the end of the year.