Lekoil swings to profit as it ramps up production

The AIM-traded firm said its cost of sales was $15.9m, also rising from nil, leading it to swing to a profit for the year of $6.5m, compared to a loss of $15.8m 12 months earlier.

Its profit per share was one US cent, compares to losses per share of three cents in the prior year.

Period end cash stood at $6.9m, with cash at the end of April of $5.9m, compared to 2016 year-end cash of $3.3m.

Looking ahead, increasing Otakikpo production volumes towards 20,000 bopd was set to be reached in 2020, the Lekoil board said.

It said it would secure finance to appraise and test the Ogo discovery in OPL 310, and initiate the farm -ut process for OPL 325.

“To our great satisfaction, 2017 saw Lekoil’s first commercial production, and first crude oil sales,” said chairman Samuel Adegboyega.

“These are perhaps the most important milestones in the history of the company, and represent the fruits of efforts that have been ongoing since Lekoil’s inception in 2010.”

Lekan Akinyanmi, Lekoil's CEO, added that the company’s priority for 2018 was to continue to grow production volumes and profitability at Otakikpo.

“In tandem, we will aim to progress the appraisal and development of our Ogo discovery in OPL 310,” Akinyanmi explained.

“Once we receive the second ministerial consent, we plan to finalise funding plans for an appraisal drilling programme.”

Akinyanmi said the programme would comprise two wells which would include flow testing.

“Our aim is to secure enough information to enable the partners to take a final investment decision in 2019 and then to proceed with development in partnership with GE Oil & Gas.”