According to Lekoil, the onshore licence 276 contains four hydrocarbon discoveries, and is in close proximity to three existing producing fields

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Image: Lekoil to take stake in OPL276 PSC in the eastern Niger Delta basin. Photo: courtesy of John R Perry/Pixabay.

Lekoil, an Africa-focused oil and gas company, has agreed to acquire 45% stake in an onshore licence in the eastern Niger Delta basin in Nigeria from Newcross Petroleum.

The transaction, which is being carried out through its subsidiary Lekoil 276, is for participating stake in the production sharing contract (PSC) pertaining to the oil prospecting licence 276 (OPL276 PSC).

Lekoil said that the transaction is said to be in line with its continuing strategy to bring together a balanced portfolio of oil and gas interests. Included in these are the producing Otakikpo field, OPL310 which is in appraisal stage, along with high impact exploration assets like OPL325 located across known basins.

What the acquisition in the Nigerian onshore licence means for Lekoil

Lekoil CEO Lekan Akinyanmi said: “The acquisition of an interest in the OPL276 PSC represents an excellent opportunity to further build our growing production base in line with our stated strategy to create a balanced portfolio of assets.

“With the completion of this, LEKOIL will have acquired a potential near-term producing asset with significant resource potential. We are optimistic about the prospects here, which have shallow reservoirs and are cost efficient to develop. Our focus will now shift to moving plans quickly forward for oil and gas production.”

The onshore Nigerian license is near three existing producing fields – Effiat-Abana in OML114, Stubb Creek straddling it and OML13, and Uquo in OML67, all located within 20km from it.

Newcross Petroleum had identified ten prospects and seven leads in the acreage under the licence 276. Four wells were drilled in the asset between 1972 and 1986, which led to two oil and two gas discoveries, which include the Uda oil and gas discovery, Okposo-East oil and gas discovery, Mbo gas discovery, and the Davy Bank gas discovery.

Based on data from the four wells, the preliminary resource estimates by Newcross Petroleum are gross recoverable volumes of 29 million barrels of oil and 333Bcf of gas, and an upside of 33 million barrels of oil and 476Bcf of recoverable gas.

Lekoil’s subsidiary will also sign an interim governance agreement with Newcross Petroleum and Albright Waves Petroleum Development, which will define terms as per which the former will offer technical support to the PSC.

Post-acquisition, Newcross Petroleum will reduce its stake in the onshore Nigerian licence from 90% to 45%, and will continue to be the operator, while Albright Waves will retain its 10% stake.