S HAPING THE FUTURE OF OIL EXPLORATION AND PRODUCTION IN A FRICA J UNE 2019
Introduction We ▪ are an indigenous Nigerian upstream ▪ have a highly experienced technical team company, focused on Africa ▪ focus on cost discipline and efficiency ▪ have a producing asset, with material ▪ are positioned to create midstream value near-term upside at low cash breakeven via our Gas & Power franchise ▪ opened a world-class basin with ▪ aim to create value through the cycle transformational oil and gas potential …are a True ‘E&P’ Company EXPLORATION UPSIDE CURRENT PRODUCTION* APPRAISAL ASSET 2020 PRODUCTION TARGET* 5 BN BOE , STOIIP (OPL325) 774 MMBLS (O GO )** ~6,000 BOPD 15-20,000 BOPD 163 MMBLS (O TAKIKPO ) ~2,400 BOPD NET 6-8,000 BOPD NET OPL310 *LEKOIL has a 40% economic interest in Otakikpo **P50 estimate from actual well data in Ogo-1 and Ogo-1ST SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA I NVESTOR P RESENTATION | J UNE 2019 1
Corporate Strategy SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA I NVESTOR P RESENTATION | J UNE 2019 2
Six Years Later, Progress Continues In 2013 we aimed to: To date in 2019 we have: ▪ Built the “pyramid” with exploration, ▪ Create a balanced portfolio of E&P appraisal and production assets assets ▪ Drilled OPL310 and added a promising ▪ Exploit overlooked opportunities in new asset in the same basin (OPL325) and existing basins ▪ Added Otakikpo (Eastern Niger Delta) ▪ Focus on a Pan African Strategy: assets and OPL325 (Dahomey Basin) in the Dahomey Basin and the Niger Delta ▪ Grown our technical team to prepare for OPL310 appraisal drilling and raised ▪ Optimize our strong technical team and LEKOIL’s profile within country and industry relationships industry SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA I NVESTOR P RESENTATION | J UNE 2019 3
O FFSHORE OPL310 & OPL325 SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA
The Next Big Thing(s)? Follow the West African Transform Margin 2.3 billion boe recoverable 1.7 billion boe recoverable 1.6 billion boe recoverable 777 million boe recoverable 900 million boe Source: IHS Markit recoverable SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA I NVESTOR P RESENTATION | J UNE 2019 5
Current Status of OPL310 Plans Advancing Despite Ruling -Wells selected for OGO Appraisal Program -Funding discussions underway with industry partners Negotiations with Partner Continues -LEKOIL has withdrawn the lawsuit -Engagement with local partner Optimum and regulator License Extension In Process -Optimum had previously requested extension -Ministerial Consent for 17.14% participating interest (corresponding 30% economic interest) was awarded in 2017 from respective annual reports; May 2019 disclosed in 2018 AR SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA I NVESTOR P RESENTATION | J UNE 2019 6
OPL 310 – Ogo Field Overview Post Rift Sequence Four-way dip/fault dependent closures ▪ Turonian and Cenomanian: OIL bearing • Albian: GAS CONDENSATE bearing • Syn Rift Sequence Half grabens in Syn rift ▪ Syn Rif: GAS CONDENSATE bearing • Appraisal Program Objectives Flow test at Ogo ▪ Drill string previously parted prior to acquisition • of wirelog data Determine Oil / Gas Ratio ▪ Important data that will impact course of the • Field Development Plan SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA I NVESTOR P RESENTATION | J UNE 2019 7
OGO – 1 & 2 (282ft) OGO – 3 & 4 (320ft) Potential Ogo well locations Sea floor depth NW SE SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA I NVESTOR P RESENTATION | J UNE 2019 8
Ogo Development Partner: BHGE Proposed US $1 billion in capital* to first oil Envisioned Capital Program US $400m Full field oil development US $600m Subsequent upstream gas development GE to commit funds for full field development ▪ Will receive a % of LEK’s future cash flows ▪ Ability to leverage GE’s equipment and technical ▪ expertise throughout life of project * Subject to successful appraisal well and certain conditions Exact total cost of field development from multiple phases, TBD Non-Binding MoU with Pressure Control Systems Nigeria Limited, a GE subsidiary SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA I NVESTOR P RESENTATION | J UNE 2019 9
Unlocking Value in Ogo Funding Consent Solution Full Field Development Appraisal CPR Drilling Update FDP * Subject to successful appraisal well and certain conditions SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA I NVESTOR P RESENTATION | J UNE 2019 10
OPL 325 Promising Asset With Deep Water Turbidite Fan Play 62% Equity Interest We identified this block as a key target ▪ with exploration upside Highlighted in our proprietary Dahomey ▪ Basin study that runs along the Western Side of the Niger Delta Covering area of 1,200 km2 with ▪ estimated gross unrisked prospective resources of 5,067 MMbbls* Lekoil acquired 88.57% of Ashbert Oil ▪ and Gas Limited, the operator of OPL 325, therefore receiving an entitlement to 62 % of the equity of OPL 325 *Third party technical report from Lumina Geophysical SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA I NVESTOR P RESENTATION | J UNE 2019 11
O TAKIKPO U PDATE SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA
Otakikpo Overview Producing Marginal Field 40% Working Interest Ramp up towards Gross Reserves & ▪ ▪ 15-20,000 bopd resources (6-8,000 net to LEK) 1P+ 1C at 47mmbbls ▪ 2P+ 2C at 56.60mmbbls ▪ 3P+ 3C at 66.20mmbbls ▪ Adjacent to shoreline with multiple crude ▪ evacuation options Company controlled infrastructure ▪ (no Trans Forcados pipeline exposure) Reserves and resources from current CPR ▪ currently exclude Otakikpo South prospect 3D seismic acquisition and interpretation ▪ complete; updated CPR being finalized SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA I NVESTOR P RESENTATION | J UNE 2019 13
Otakikpo Infrastructure Schematic Currently (gross production numbers) Gas Fuel Gas Scrubber flare 22,000 HP & LP 20,000 10,000 Prod. 6,000 bpd Tanks Sep-01 6,000 120,000 PLEM 70,000 Transfer Pumps 10,000 Heat Exchanger 6,000 Test Sep-02 Shuttle Tanker <4,000 Surge Vessel 25,000 Wells 01 12,000 6,000 <4,000 LACT Export Pumps Unit 20,000 20,000 Offtake Partner Legend Lifting proceeds made to LEKOIL within 30 days of lifting from IMA Price realized at a ~$1 premium to Brent 10,000 – System Capacity Terminal 6,000 – Current utilization SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA I NVESTOR P RESENTATION | J UNE 2019 14
Naira Redenomination Improves Debt Cost of Capital Interest on Facilities Prior (NGN) New (USD) 20% 12.4% NIBOR (14%) + 6% 4.5 billion NGN facility LIBOR (2.4%*) + 10% US $ 8.45 million facility 26% + extended tenor to 2021 5 billion NGN facility Loan Balance 2017 2018 US $ 29.5 million US $ 20.5 million US overnight LIBOR and NIBOR on 25 Jun 2019; Using actual data disclosed in 2017 and 2018 AR SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA I NVESTOR P RESENTATION | J UNE 2019 15
Strengthening Balance Sheet Cash Balance Outstanding debt financing Trade payables in US $ million net of cash in US $ million in US $ million 13.1 22.6 10.4 32.5 6.9 10.1 13.6 YE 2017 YE 2018 YE 2017 YE 2018 YE 2017 YE 2018 May 2019 from respective annual reports; May 2019 disclosed in 2018 AR SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA I NVESTOR P RESENTATION | J UNE 2019 16
Solid and Diversified Shareholder Register MERIDIAN CAPITAL LSE AIM: LEK Source: RD:IR, Bloomberg SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA I NVESTOR P RESENTATION | J UNE 2019 17
T EAM AND A PPENDIX SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA
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