• Natural Gas News

    Lekoil Buys Into Nigerian Onshore Block


The West Africa-focused operator sees scope for near-term production at the Niger Delta site.

by: Joseph Murphy

Posted in:

Natural Gas & LNG News, Africa, Premium, Corporate, Mergers & Acquisitions, Exploration & Production, Investments, News By Country, Nigeria

Lekoil Buys Into Nigerian Onshore Block

Lekoil has clinched a deal to take a stake in an onshore block in the Niger Delta basin in Nigeria, the West Africa-focused operator said in an August 23 statement.

The London-listed company has agreed to buy a 45% interest in a production-sharing contract (PSC) for prospecting licence 276 from Nigeria’s Newcross Petroleum for $5mn. Newcross has identified has previously identified 10 prospects and seven leads in the area. Four wells were drilled at the site between 1972 and 1990, resulting in the discovery of four oil and gas discoveries.

Commenting on the deal, Lekoil CEO Lekan Akinyanmi said the company was acquiring “a near-term production asset with significant resource potential.”

“We are optimistic about the prospects here, which have shallow reservoirs and are cost efficient to develop,” he said. “Our focus will now shift to moving plans quickly forward for oil and gas production.”

Newcross’ preliminary estimates place the area’s resources at 29mn barrels of oil and 333bn ft3 of gas gross recoverable, with an upside of 33mn barrels of oil and 476bn ft3 of gas. Lekoil said it had verified these figures internally, but planned to commission an independent report in due course.

Lekoil said there was scope for re-entering one or more of the area’s discovery wells, noting that potential resources could be transported to existing export facilities nearby. The company also intends to sign an interim governance agreement with Newcross and Nigeria’s Albright Waves Petroleum Development, to set out terms on providing technical support at the project.

Newcross currently has a 90% share of the licence PSC, while Albright has 10%. Through the deal, Lekoil will be gaining an interest in its fourth block in Nigeria.