Lekoil Oil and Gas Investments Limited has executed a prepayment facility agreement with Shell Western Supply and Trading Limited, SWST, a member of the Royal Dutch Shell group of companies.
This prepayment facility follows the renewal of the offtake agreement with SWST, which occurred in the second quarter of this year as announced on June 26, 2020.
The deal will provide further short-term liquidity with the proceeds already received.
The facility size valued at $3.5 million has a tenor of five months and charges a market margin over LIBOR. The facility is repayable from future crude oil liftings.
With the receipt of this facility, the offtake agreement between both parties has been extended for an additional year, to expire on 28 April 2022.
Speaking on the deal, Chief Executive Officer of Lekoil, Lekan Akinyanmi, said, “We are pleased to continue our relationship with Shell as a commercial and financial partner.
Together with the recent cost reduction measures, we have undertaken receipt of the proceeds of this prepayment facility, which will further strengthen our balance sheet to support the execution of our strategy.”