LEKOIL (AIM: LEK), the oil and gas exploration and production company with a focus on Nigeria and West Africa, is pleased to announce that LEKOIL Oil and Gas Investments Limited (“LOGL”), in which the Company has a 90 per cent. economic interest in has executed a prepayment facility agreement with Shell Western Supply and Trading Limited (“SWST”), a member of the Royal Dutch Shell group of companies (LSE: RDSA, RDSB).
This prepayment facility follows the renewal of the offtake agreement with SWST, which occurred in the second quarter of this year as announced on 26 June 2020, and will provide further short-term liquidity with the proceeds already received.
The facility size is US$3.5 million, and it has a tenor of five months and charges a market margin over LIBOR. The facility is repayable from future crude oil liftings. With the receipt of this facility, the offtake agreement between SWST and LOGL has been extended for an additional year and will now expire on 28 April 2022.
Lekan Akinyanmi, LEKOIL’s CEO, commented, “We are pleased to continue our relationship with Shell as a commercial and financial partner. Together with the recent cost reduction measures, we have undertaken, receipt of the proceeds of this prepayment facility will further strengthen our balance sheet to support the execution of our strategy.”