By Prince Okafor
Nigeria’s indigenous oil and gas exploration and production company, Lekoil, has announced net loss of $7.9 million in its unaudited interim results for the six months ended 30, June 2020.
The company’s loss in the first six months of 2020 increased by 34 per cent, when compared to a loss of $5.2 million recorded in the corresponding period last year.
According to the report, within the period, the company successfully completed site survey operation on Oil Prospecting Licence, OPL, 310, while Otakikpo production averaged 5,676 barrels of oil per day, bpd, gross with 2,271 bpd net to Lekoil Nigeria.
In addition, the report noted that the group’s share of equity crude was 408,800 barrels.
It stated that: “Phase Two development plans at OPL 310 are underway, subject to securing funding, for the drilling of up to seven wells, while the first two wells are expected to increase gross production to 10,000 bpd. With major preparatory work concluded for the Ogo appraisal drilling programme and well locations selected, funding discussions are currently underway with industry partners.”
Commenting on the company’s financial performance, the Chief Executive Officer, Mr. Lekan Akinyanmi, said: “In the period ended 30, June 2020, Lekoil renewed its offtake agreement with Shell Western Supply and Trading Limited for two years and included the provision of a $3.5 million prepayment facility to aid short term liquidity.
The facility, which is repayable from future crude oil liftings, has a tenor of five months and charges a market margin over London Inter-Bank Offered Rate, LIBOR.
“Despite the challenges of the first six months of the year, we have navigated this demanding period with steady production and cash flow generation from Otakikpo while implementing a range of significant cost reduction initiatives across our operations.”
Akinyanmi, however, noted that net loss for the period stood at $7.9 million as against $5.2 million in the comparable period in 2019, while administrative and general expenses significantly reduced to approximately $1.0 million.