Shares in West Africa-focused oil and gas explorer Lekoil closed up almost six per cent yesterday after the firm signed a memorandum of understanding (MOU) with US utilities giant General Electric.
Lekoil signed the MOU with GE Oil & Gas, a General Electric subsidiary, for the development of one of its fields in Nigeria. Once Lekoil has completed an appraisal programme, GE Oil & Gas intends to invest funds towards the project’s development capital.
Lekoil expects the full field oil development cost to total around $400m (£319m), while subsequent upstream gas field development will cost around $600m.
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The appraisal will include an appraisal well, which is expected to spud by year-end 2017 or in early 2018.
It has not yet been established how much GE Oil & Gas will put towards the full field oil development.
"We are pleased to announce this MOU with GE Oil & Gas which marks the first step in our aim to fully develop the Ogo field," said Lekan Akinyanmi, chief executive of Lekoil.
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"The agreement... significantly reduces Lekoil's cost of capital to bring the field into production."
Lekoil's shares closed up 5.95 per cent to 24.5p last night.