LEKOIL Oil and Gas Investments Limited has announced the signing of a new $11.5m debt facility with FBNQuest Merchant Bank.

The company said in a statement made available to the London Stock Exchange that the agreement was signed on Friday.

LEKOIL Nigeria Limited, which is the parent company of LEKOIL Oil and Gas, said it had agreed to guarantee the obligations of Lekoil Oil and Gas Investments Limited pursuant to the facility.

The statement said the facility had a maturity of four years and was repayable quarterly with a margin of LIBOR + 10 per cent.

The statement read in part, “The facility will be used primarily to pay all outstanding quarterly repayments (including principal and interest) due to Shell Western Supply and Trading Limited and payment of the licence/lease extension fees on OPL 276 (as announced on August 23 2019) and OPL 310 ($7.5m due by October 31, 2019).”

The company said it expected to draw down on the facility as needed, which had no pre-payment penalty.

The Chief Executive Officer, LEKOIL, Lekan Akinyanmi, said, “I am delighted that we have agreed to this additional facility with FBNQuest, a key local lender in Nigeria.

“This facility provides us with increased flexibility at a cost of capital in-line with our existing facilities.  We appreciate FBNQuest’s support and appreciate our growing long-term relationship with them.”