AIM-listed Lekoil has announced that, further to the announcement on 7 November 2013, the Company has decided to terminate the binding conditional Sale and Purchase Agreement (SPA) with Pan Petroleum Aje Limited, Pan-Petroleum Nigeria Holding BV and Pan-Petroleum (Holding) Cyprus Limited entered into on 17 June 2013, according to which it proposed to acquire an interest in OML113. This is as a result of an inability to agree final terms with the Parties.
Lekoil understands that the Parties have a right to call the US$3million bid bond entered into as part of the SPA or receive an equivalent cash payment in lieu of the bid bond which Lekoil will finance out of its current cash reserves. This cost is in addition to the US$4million already paid to the Parties as part of the consideration (inclusive of cash calls) under the SPA.
This decision will allow the Company to fully focus on developing its discovery at OPL310, which as announced earlier today, has produced results significantly ahead of Lekoil’s initial resources estimates at the time of the IPO. Lekoil also continues to review other opportunities and has identified a number to date with near-term cash flow potential. Further updates will be provided as and when appropriate.