J UNE 2019 Introduction We are an indigenous Nigerian upstream - - PowerPoint PPT Presentation

SHAPING THE FUTURE OF OIL EXPLORATION

AND PRODUCTION IN AFRICA

JUNE 2019

SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA

▪ are an indigenous Nigerian upstream company, focused on Africa ▪ have a producing asset, with material near-term upside at low cash breakeven ▪ opened a world-class basin with transformational oil and gas potential ▪ have a highly experienced technical team ▪ focus on cost discipline and efficiency ▪ are positioned to create midstream value via our Gas & Power franchise ▪ aim to create value through the cycle

INVESTOR PRESENTATION | JUNE 2019 1

~6,000 BOPD

5 BN BOE, STOIIP (OPL325) 163 MMBLS (OTAKIKPO)

Introduction

…are a True ‘E&P’ Company We

15-20,000 BOPD

2020 PRODUCTION TARGET* CURRENT PRODUCTION* EXPLORATION UPSIDE APPRAISAL ASSET

774 MMBLS (OGO)**

OPL310

~2,400 BOPD NET 6-8,000 BOPD NET

*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

Corporate Strategy

INVESTOR PRESENTATION | JUNE 2019 2

SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA

▪ Create a balanced portfolio of E&P assets ▪ Exploit overlooked opportunities in new and existing basins ▪ Focus on a Pan African Strategy: assets in the Dahomey Basin and the Niger Delta ▪ Optimize our strong technical team and industry relationships

Six Years Later, Progress Continues

In 2013 we aimed to: To date in 2019 we have:

▪ Built the “pyramid” with exploration, appraisal and production assets ▪ Drilled OPL310 and added a promising asset in the same basin (OPL325) ▪ Added Otakikpo (Eastern Niger Delta) and OPL325 (Dahomey Basin) ▪ Grown our technical team to prepare for OPL310 appraisal drilling and raised LEKOIL’s profile within country and industry

INVESTOR PRESENTATION | JUNE 2019 3

SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA

OFFSHORE

OPL310 & OPL325

SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA

The Next Big Thing(s)?

Follow the West African Transform Margin

Source: IHS Markit

1.7 billion boe recoverable 1.6 billion boe recoverable 900 million boe recoverable 777 million boe recoverable 2.3 billion boe recoverable

INVESTOR PRESENTATION | JUNE 2019 5

SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA

Current Status of OPL310

Plans Advancing Despite Ruling

• Wells selected for OGO Appraisal Program
• Funding discussions underway with industry partners

INVESTOR PRESENTATION | JUNE 2019 6

from respective annual reports; May 2019 disclosed in 2018 AR

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

SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA

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
• f wirelog data

▪ Determine Oil / Gas Ratio

• Important data that will impact course of the

Field Development Plan

INVESTOR PRESENTATION | JUNE 2019 7

SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA

Potential Ogo well locations

NW SE

OGO – 1 & 2 (282ft) OGO – 3 & 4 (320ft)

Sea floor depth

INVESTOR PRESENTATION | JUNE 2019 8

SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA

Ogo Development Partner: BHGE

Envisioned Capital Program US $400m

Full field oil development

US $600m

Subsequent upstream gas development

Proposed US $1 billion in capital* to first oil

▪ GE to commit funds for full field development

* 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

▪ Will receive a % of LEK’s future cash flows ▪ Ability to leverage GE’s equipment and technical expertise throughout life of project

INVESTOR PRESENTATION | JUNE 2019 9

SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA

* Subject to successful appraisal well and certain conditions

Consent Funding Solution CPR Update FDP

Unlocking Value in Ogo

Appraisal Drilling Full Field Development

INVESTOR PRESENTATION | JUNE 2019 10

SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA

▪ 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

OPL 325 Promising Asset With Deep Water Turbidite Fan Play

62% Equity Interest

*Third party technical report from Lumina Geophysical

INVESTOR PRESENTATION | JUNE 2019 11

SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA

OTAKIKPO UPDATE

SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA

▪ 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

Otakikpo Overview Producing Marginal Field

40% Working Interest

▪ Ramp up towards 15-20,000 bopd (6-8,000 net to LEK)

▪ Gross Reserves & resources ▪ 1P+ 1C at 47mmbbls ▪ 2P+ 2C at 56.60mmbbls ▪ 3P+ 3C at 66.20mmbbls

INVESTOR PRESENTATION | JUNE 2019 13

SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA

Otakikpo Infrastructure Schematic

Currently (gross production numbers)

Surge Vessel 01 12,000 6,000 6,000 <4,000 10,000 6,000 <4,000 Transfer Pumps 10,000 Heat Exchanger Prod. Sep-01 Tanks 120,000 70,000 Export Pumps 20,000 PLEM Shuttle Tanker 25,000 Wells 6,000 bpd LACT Unit 20,000 22,000 20,000 Gas flare HP & LP Test Sep-02

Offtake Partner

Lifting proceeds made to LEKOIL within 30 days of lifting from IMA Terminal

Price realized at a ~$1 premium to Brent

10,000 – System Capacity 6,000 – Current utilization Legend Fuel Gas Scrubber INVESTOR PRESENTATION | JUNE 2019 14

SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA

Naira Redenomination Improves Debt Cost of Capital

US overnight LIBOR and NIBOR on 25 Jun 2019; Using actual data disclosed in 2017 and 2018 AR

Prior (NGN) New (USD) 20%

NIBOR (14%) + 6%

26% 12.4%

LIBOR (2.4%*) + 10%

5 billion NGN facility 4.5 billion NGN facility US $ 8.45 million facility

+ extended tenor to 2021

Loan Balance Interest on Facilities 2017 2018 US $ 29.5 million US $ 20.5 million

INVESTOR PRESENTATION | JUNE 2019 15

SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA

Strengthening Balance Sheet

YE 2017

Cash Balance

in US $ million YE 2018

Outstanding debt financing

net of cash

in US $ million

INVESTOR PRESENTATION | JUNE 2019 16

from respective annual reports; May 2019 disclosed in 2018 AR

May 2019 6.9 10.4 13.1

Trade payables

in US $ million 32.5 13.6 22.6 10.1 YE 2017 YE 2018 YE 2017 YE 2018

SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA

Solid and Diversified Shareholder Register

LSE AIM: LEK

Source: RD:IR, Bloomberg

MERIDIAN CAPITAL

INVESTOR PRESENTATION | JUNE 2019 17

SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA

TEAM AND APPENDIX

SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA

Management Team

✓

Formerly the international Energy Sector Head at AllianceBernstein

✓

Engineering and operational roleswithin Schlumberger in a career that spanned Nigeria, Egypt, Pakistan, Oman and Scotland

✓

• BSc. in Electronic and Electrical Engineering from

Obafemi Awolowo University Ile-Ife, Nigeria (1991); and an MBA from MIT Sloan

✓

Member of the #1 Institutional Investor- ranked team of analysts covering the

• ilfield services industry as an Associate

Director at UBS Investment Research

Lekan Akinyanmi

Executive Board Member, Chief ExecutiveOfficer

✓

Over 35 years of experience in the industry with Shell and Agip in a career that spanned locations in Nigeria, Italy, The Netherlands andOman

✓

General Manager, Corporate Security at Shell inNigeria

✓

Has held various senior management positions (Production Operations and Maintenance Manager, Senior Portfolio Development Manager and General Manager Corporate Security)

Leke Adedipe

Chief OperatingOfficer

GregoryEckersley

Interim Chief Financial Officer

✓

Until recently, was Global head of the Abu Dhabi Investment Authority’s internal equities department overseeing portfolios, risk management and due-diligenceprocesses

✓

Former Senior Vice President and Portfolio Manager at Alliance Bernstein, managing multi-billion dollar portfolios in Global and International LargeCap GrowthEquities

✓

Currently Chairman of LEKOIL’s Remuneration Committee and a member of the Company’s Audit Committee INVESTOR PRESENTATION | JUNE 2019 19

SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA

Management Team (Continued)

✓

Over 25 years experience in the industry with Oil majors and Schlumberger

✓

Former chief geophysicist at Shell

✓

Sound ability in building/leading diverse teams of varying sizes and delivering in a performance-driven environment. Has held responsibilities in Nigeria, Europe, Middle-East andAsia

Sam Olotu

Chief TechnicalOfficer

✓

Leads LEKOIL’s Gas & Power business with a focus on profitably monetizing equity gas in existing assets and also generating new businesses to create a thriving enterprise

✓

Responsible for the stewardship and implementation of LEKOIL’s Corporate Strategy

✓

Over 20 years’ experience in the Oil & Gas industry serving in various commercial and technical leadership roles in Nigeria, Venezuela, the USA and the UAE

Shola Adekeye

Managing Director LEKGAS

INVESTOR PRESENTATION | JUNE 2019 20

SHAPING THE FUTURE OF OIL EXPLORATION & PRODUCTION IN AFRICA

Current Asset Base

*Acquisition subject to ministerial consent

Otakikpo

20.4 mmbls net |56.6 mmbls gross 2P + 2C resources 65.2 mmbls net | 163.0 mmbls gross, STOIIP upside

OPL310

774.0 mmboe gross prospective resources*

OPL325

5 -6 billion boe STOIIP**

**Third party estimate by Lumina Geophysical

+

INVESTOR PRESENTATION | JUNE 2019 21

IR@lekoil.com