Lekoil set to lift stake in Ogo offshore Nigeria

Offshore staff

LONDONLekoil (AIM: LEK) has agreed to acquire Afren’s 22.86% interest in OPL 310 offshore Nigeria, which includes the potentially large Ogo oil and gas discovery, for $13 million.

Currently Lekoil Nigeria has a 17.4% stake in the license via its subsidiary, Mayfair Assets and Trust, and a further 30% economic interest earned through a farm-in agreement signed in 2013 with Afren.

Assuming Ministerial approval for the transaction, Optimum Petroleum Development Co. will remain operator with Lekoil acting as its technical and financial partner.

Following the initial discovery well in June 2013, 3D seismic was acquired over the remaining 80% of OPL 310 and interpretation of the seismic is in progress. The partners plan to commission a detailed work program for 2016.

The license is within the Upper Cretaceous fairway that runs along the West African Transform Margin, and extends from the shallow water continental shelf to deepwater.

It is also close to the West African Gas Pipeline, which provides a ready outlet for development of gas discoveries.

According to Afren’s review Ogo-1, drilled into a four-way dip-closed structure in the Turonian to Albian sandstone reservoirs, was one of the world’s largest discoveries of 2013.

It encountered a gross hydrocarbon section of 524 ft (160 m), with 216 ft (66 m) of net stacked pay, and the side track that followed penetrated hydrocarbon intervals in the same reservoirs.

Afren, which entered administration on July 31, 2015, estimated recoverable resources in the 774-1,180 MMboe range, with upside potential for light oil or condensate-rich gas in the syn-rift play.

12/01/2015

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