Lime Petroleum is experiencing short-term liquidity constraints due to start-up delays and operational interruptions at its Seme field development offshore Benin. These difficulties, including significant technical issues and stuck pipe incidents during drilling, have postponed oil production and increased costs, leading to delayed revenues.

Financial Measures and Shareholder Support

To address the liquidity squeeze, Lime has requested bondholder approval to defer interest payments due in January 2026 to no later than March 31, 2026, and to temporarily waive minimum liquidity covenants until that date. Its main shareholder, Rex International, is working to raise additional equity, but these funds are not expected before the deferred payment dates.

Operational Status and Plans

Production from the Seme field is expected by the end of January. The mobile offshore production unit and floating storage and offloading unit are on location and ready. Drilling into the main reservoir of the AK-2H production well is planned to commence imminently. Only this well will be brought into production initially; the other two wells from the original campaign (AK-1P and AK-1H) will be suspended until a new drilling rig is contracted later this year to complete the campaign.

Drilling Challenges

Drilling operations have faced significant challenges in the geomechanically unstable shale layers above the reservoir, causing delays due to several stuck pipe incidents and necessitating redrilling. However, the challenging overburden section for the AK-2H well has now been successfully drilled through using new geo-mechanical data to optimize parameters.

Field Development Overview

The Seme development plan involves three wells tied back to a mobile offshore production unit connected to a floating storage and offloading vessel, with gross production forecast at about 16,000 barrels per day. Akrake Petroleum holds a 76% working interest and operatorship of Block 1 under a production sharing contract awarded in December 2023, with the Benin government holding 15% and Octogone Trading holding 9%.