Lekoil Limited, the oil and gas exploration and production company with a focus on Nigeria and West Africa, has rejected the announcement on 1st April in which Lekoil Nigeria offered to purchase the Oil Prospecting Licence (OPL) 310 loan.
Lekoil Limited also turned down Lekoil Nigeria’s request to repay the outstanding amount under the Savannah Energy Investments Limited convertible facility agreement.
In a statement on Tuesday, Lekoil Limited maintained it was incapable of accepting Lekoil Nigeria’s offer without being ‘in breach of written legally binding obligations to Savannah’, which is another party to the deal.
Commenting on Lekoil Limited’s decision, its Interim Executive Chairman, Anthony Hawkins said that even if the company were to consider Lekoil Nigeria’s offer, it was not likely to be a superior offer to any other.
It premised that decision on several reasons.
‘Lekoil Nigeria has not demonstrated the capability to fund the offer’, Hawkins said, and added: ‘It (Lekoil Nigeria) has not, since 2013, shown any evidence of the ability to fund the appraisal and/or development of OPL 310 (the licence for which is due to expire in August 2022 due to inactivity); it would be using Group cash to which the shareholders already have an entitlement to; and it has chosen to conduct the negotiation process by way of public announcement rather than private dialogue with the company’.
Hawkins’ statements then concluded: ‘For these reasons, the offer should not be seen as a serious attempt to provide an alternative to the company and its shareholders but as an attempt to muddy the waters prior to the Extraordinary General Meeting. I would encourage shareholders to vote by way of proxy at the EGM in favour of the resolutions’.