I don't see why LEK should get this. LEK do not have the technical expertise that Afren had and this percentages at the time of the original deal had factored this in. If they do can we trust them to take on this project on successfully?
A better outcome is if this stake was given to a big player.
There you go, I take it our envelope was not sufficiently large ..... lots of 'paperwork' required and 'rubber stamps' needed, not anymore !!!
Good news, fwiw
"Application to the Court for a Declaration
Despite progressing exploration and appraisal activities on OPL 310 as
previously announced, LEKOIL has, to date, not received Ministerial
Consent for its acquisition of the additional 22.86 per cent interest in
OPL 310 or a satisfactory explanation of why such consent has not been
forthcoming. As a result, the Company has taken the decision to apply to
the Federal High Court for a declaration that is expected to expedite the
consent process, and preserve the unexpired tenure in the licence. The
Company will provide updates to the market as appropriate. The Company is
represented by Fidelis Oditah QC, SAN."
"An application for the transfer of the 22.86 per cent interest was duly
made by Afren Nigeria in January 2016. As the transaction was not
undertaken on the basis of an Assigned Interest in the oil block, approval
by Optimum was not required under the JOA between Optimum and Afren. In
March 2016, LEKOIL was notified by the Ministry of Petroleum Resources
that the necessary due diligence exercise would be conducted that month.
The due diligence exercise did not take place and has not been rescheduled
by the Department of Petroleum Resources since then."
remember they started the year with zero production and now have 7600 and all the income that entails. Ill be glad if it gets to 15000 bopd and 20000 I will be over the moon. This is the start and Im sure that we will be up to 50-80k bopd before 2020. They are in a prolific oil bearing area.
Everything is looking pretty good. 5,500 bopd with ramp up to 10,000. Then focus will be on the evaluation and exploration of surrounding prospects in both OPL 310 (Afren's) and the Otakikpo licence area.
I am happy with my small (given the risks with likes of Afren) punt on LEK, with oil prices low the news flow could prove timely with a rise in oil price later into the year.
First Crude Payment Received, Production Ramp-UpOngoing
LEKOIL(AIM: LEK), the oil and gas exploration, development and production companywith a focus on Africa, is pleased to announce that it has received payment forits first cargo lifted from the Otakikpo Marginal Field in OML 11, announced on10 May 2017. The high quality Otakikpocrude blend led to the Company realizing a small premium to Brent Crude pricingbefore marketing and related costs over the given period.
Currentproduction at Otakikpo is approximately 5,500 bopd. With production gradually ramping up, theCompany is now looking to establish more frequent regular liftings as it focuseson increasing production through year end.
Tiredskidmark posted on LSE:
"I heard round the traps that the PM from Blackrock was recently shown the door and their portfolio was in he process of being liquidated.... I think they might be approaching the end of their selling, but need to check the substantial notices on RNS."
Becuase this is not a UK company the thresh holds are not the same according to the AIM rules PDF but they don't say what they are for non-UK companies.
Bit gutted I bought this at that price when I could have stuck the money in Hurricane Energy. The things that gives me confidence is this is purely a seller issue and the seller holds allot of stock. This means the price will recover given a few days.
All good otherwise:
1) Geopolitics and the company fine
2) Equal companies are doing well (see ELA)
3) Oil price strong
4) News flow (1 definitive, 1 more speculative etc...)
The s/p is coming off a lot which is strange in my mind (indeed I stopped out of 15% of my position yesterday ..)
From RNS's so far I see that YF have only declared selling one million from their peak position 43.85m ... for approx. gbp 150 m market cap that in itself is not going to move the s/p down much.. if as you say they are perhaps in the process of selling down the lot - or a lot more - in the last week I'm surprised they haven't incrementally declared this.... I don't know the rules though ..maybe they don't have to next declare until they go under 3%.. and had to by rule when under 8% .. no rule for 5% too for eg.?
If it is what you say and they're not under 3% yet.. then it may well come off more.. alas.. although i'm surprised there are not more willing buyers..
I have added 1k given than fellow Nigerian company ELA continues its late rise without falling back after also producing 10,000 barrel of oil per day for itself. Note however LEK is far more aggressive than ELA and will grow through acquisitions like Afren did into a 1billion+ company.
It is hard to find the money to invest here given the success of safer stocks including Hurricane Energy I continue to back. But there is value in LEK and is free from fickle PI's (for now).
Once the 8% is cleared and presuming oil price does not fall we are looking to progress back on the path to 30p with the speculative hope of OPL 310 coming in soon that should drive a step up in share price. How much of a step up I have no idea.
PS: as this implementation project definitely did not go smoothly Lek technical experts didn't cover themselves in glory .. and so their ranks likely need bolstering towards gaining as much of OML as possible on as favourable terms..
Also I think they are in a very useful position of having already been granted a lot and courts / government departments having to be take some of it back from them (as opposed to currently fighting to get it granted to them in the first place) ...Top lawyers and good political connections are very important here.. as well as bringing on board technical experts as needs be to the Lek team..
For this share price to be only flat so far today is very unimpressive, imho.
80p gotreal would, in my mind, have a lot to do with how much of OPL310 Lek ends up with and on what terms. And the play out of this seems to be very tricky and drawn out.
There is serious institutional involvement here and therefore this is not as volatile as many of its peers.. which means big spikes up - or down which is a good thing - seem less a factor here. And my instinct is that the institutional players have good inside track and so the s/p moves somewhat ahead of the RNS and when the RNS is released the info. is kinda in the price already.
PS ; Johan, Lek were technical experts as well as bankrollers of this swampy - ie technically hard - project, so they clearly have some technical experts on their books already.. also the Afren tech experts need(ed) new jobs and so I don't see why Lek can't take a few onboard as needs be (indeed maybe the already have) ?
It has indeed been a long time and the wait has raised a few concerns but it seems all of the dots have been joined, oil is flowing at a decent rate with the 10Kbpd target seeming achievable and a new CFO who understands the local market and has some pedigree:
"Bruce served as the finance director of JKX Oil & Gas PLC, the London Stock Exchange listed exploration and production company with interests in Ukraine and central and eastern Europe for 14 years. Prior to this, he held various positions at Ernst & Young in the Wellington (New Zealand) and London offices. He holds a BSc Honours degree from Canterbury University (New Zealand), a Diploma in Accounting from Victoria University (New Zealand) and is a member of the Institute of Chartered Accountants of New Zealand."
Steady upward price movement from here should be the result to retest the 80p-ish area last seen in 2014?
The implementation project was a bit of a joke versus offered timeframes but they're there now at least... hopefully a good uptick in s/p today... I don't think it will be huge.. but maybe 30p is doable ..
At a meeting in Vienna yesterday, Saudi Arabia, Russia, Venezuela, Algeria, Oman, Qatar, and Kuwait agreed on a mechanism to monitor the rate of compliance with the crude oil production cut agreement sealed at the end of last year as an effort to rebalance the market.
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