Lekoil confirms production increase at Otakikpo

Africa-focussed oil and gas exploration, development and production company Lekoil announced an increase in current production at the Otakikpo Marginal Field in the OML 11 licence area on Friday.

The AIM-traded firm said that, since starting production on 20 February at an initial rate of 5,000 barrels of oil per day, daily production levels had steadily increased through 27 November.

Average production for October was approximately 6,400 barrels per day, with current production at Otakikpo from both wells now approximately 7,600 barrels per day.

“Additional perforations in one of two production strings at well-003 were recently performed before subsequently re-opening it for production,” Lekoil’s board explained in its statement.

“The Otakikpo Joint Venture Partners - Lekoil as financial and technical partner and Green Energy International as operator - have agreed to hold production at current levels for a few more weeks to gather and analyse essential production and reservoir data and information prior to increasing production at the field.”

As the Otakikpo field neared phase one target production of 10,000 barrels of oil per day, Lekoil said the joint venture was now focused on phase two of the Otakikpo Field Development Plan, which aimed to increase steady-state production up to approximately 20,000 barrels per day.

“Phase two includes 3D seismic coverage of the entire Otakikpo field, neighbouring prospects and the incremental development of the rest of the field with new wells planned,” the board said.

“Next steps will be to gather the 3D seismic data, process and interpret the data and subsequently release an updated competent person's report.

“The company expects the phase two development to be fully funded by industry players, which the company is already in discussions with.”

Lekoil added that it had now completed five liftings in the year-to-date, and received cash proceeds within 30 days of each lift as prescribed by the terms of the crude sales agreement with Shell Trading.

“The company has realised an average premium for the Otakikpo blend of $1 or more above Brent pricing since inception.

“At current oil prices, the cash netback is above $30 per barrel.”