TIDMSLE
RNS Number : 3967D
San Leon Energy PLC
29 June 2021
The information communicated within this announcement is deemed
to constitute inside information for the purposes of Regulation 11
of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310.
Upon the publication of this announcement, this inside information
is now considered to be in the public domain.
29 June 2021
San Leon Energy plc
("San Leon" or the "Company")
Final Results
San Leon, the independent oil and gas production, development
and exploration company focused on Nigeria, is pleased to announce
its audited final results for the year ended 31 December 2020. The
full annual report for the year to 31 December 2020 is available on
the Company's website (www.sanleonenergy.com) and will be posted to
shareholders shortly.
Highlights
Corporate
-- Completed the return of approximately US$33.8 million to
shareholders during the first half of 2020 delivering on the
Company's commitment to shareholder returns.
-- The Company entered into an agreement dated 6 April 2020
amending the existing Loan Notes Instrument (the "Amendment")
between San Leon and Midwestern Leon Petroleum Limited ("MLPL").
Under the terms of the Amendment, US$40.0 million was received
immediately by San Leon.
-- On 3 August 2020 the Company provided a US$10.0 million loan
plus an additional US$5.0 million loan on 6 October 2020 and
acquired a direct 10% interest in Energy Link Infrastructure
(Malta) Ltd ("ELI"). ELI's sole asset is the proposed new
Alternative Crude Oil Evacuation System ("ACOES") constructed to
provide a dedicated oil export route (comprising a new pipeline
together with a Floating Storage and Offloading ("FSO") vessel)
from OML 18. Once commissioned, the system is expected, by Eroton,
to reduce the downtime and allocated pipeline losses to below
10%.
-- On 1 September 2020, the Company announced that it had
conditionally agreed to invest US$7.5 million by way of a loan to
Decklar Petroleum Limited ("Decklar"), which is the holder of a
Risk Service Agreement ("RSA") with Millenium Oil and Gas Company
Limited ("Millenium") on the Oza marginal field, carved out of OML
11, onshore Nigeria. Under the agreements, once completed, the
Company will also receive a 15% interest in Decklar for a nominal
amount paid. This transaction is still awaiting final conditions
precedents to complete.
-- Board appointment process previously announced completed with
appointment of John Brown as Independent Non-Executive Director and
Chair of the Audit and Risk Committee and Adekolapo Ademola as Non
-Independent Non-Executive Director on behalf of Midwestern Oil
& Gas Company Ltd. Non-Executive Directors, Mark Phillips, Bill
Higgs and Linda Beal, left the Board during 2020 and Alan Campbell
has since stepped off the Board in 2021 as part of a board
restructure.
Financial
-- Cash and cash equivalents as at 31 December 2020 of US$18.5
million (includes US$6.8 million restricted and held in escrow for
the Oza transaction) (31 December 2019: US$36.7 million).
-- Cash and cash equivalents as at 18 June 2021 were US$14.8
million (includes Oza escrow of US$6.8 million).
-- In the past 18 months US$47.3 million, of which US$46.5
million relates to 2020 (31 December 2019: US$43.2 million) in
principal and interest payments has been received under the MLPL
Loan Notes.
-- US$5.8 million has so far been paid of the US$10.0 million
due under the MLPL Loan Notes in September 2020, leaving US$4.2
million still outstanding.
-- A share repurchase programme of US$2.0 million of Company's
shares was completed between October 2019 and January 2020.
-- A special dividend of US$33.3 million was declared in May
2020, giving a dividend yield of approximately 30% as at the date
of dividend announcement.
Operational
An update on OML 18 activity during 2020 is provided below.
-- Oil delivered to the Bonny terminal for sales was
approximately 21,100 barrels of oil per day ("bopd") in 2020
(32,000 bopd in 2019) and continues to be affected by combined
losses and downtime of approximately 35%. The 2020 figure has also
been affected by OPEC oil production quota restrictions, and some
Covid-related delays. Together, the losses, downtime, OPEC
restrictions and Covid-related delays have caused the majority of
the difference between gross production when there is minimal
disruption to production, and oil is received at Bonny terminal for
sales.
-- Gas sales averaged 32.7 million standard cubic feet per day
("mmscf/d") in 2020 after downtime (36.0 mmscf/d in 2019).
-- Production downtime of 9% in 2020 was caused by third party
terminal and gathering system issues. This relates to days when oil
production was entirely shut down at OML 18. OPEC quota
restrictions on production also had an adverse effect on production
rates, however downtime and Covid-related delays have meant these
quotas at times have not been met. Such issues in the third-party
export system are expected to be substantially resolved by the
implementation of the new ACOES for the purpose of transporting,
storing and evacuating crude oil from OML 18 export Pipeline. The
pipeline will run from within the OML 18 acreage to a dedicated FSO
vessel in the open sea, approximately 50 kilometres offshore.
Expected timing for the commencement of operations is H2 of 2021.
See ELI update below.
-- Pipeline losses by the Bonny Terminal operator have increased
over the past year (31 December 2020: 28%; 31 December 2019: 22%),
largely due to lower pipeline throughput as a result of OPEC quota
restrictions. In the longer term, the ACOES is expected to reduce
losses significantly.
-- Eroton completed its three well drilling programme in early
2020, with the final completion and flow of these wells impacted by
Covid-19. Lower oil prices for much of 2020 have led Eroton to
improve capital discipline and the prudent deferral of the next
drilling campaign, now expected to commence during 2022.
-- Eroton has taken all appropriate precautions for its
operations and people, with regards to Covid-19 and we understand
has had no Covid-19 cases on OML 18.
ELI
-- ELI has received approval from the President of Nigeria
(acting in his capacity as Minister for Petroleum Resources) for
the FSO, ELI Akaso, to be set up as an oil terminal.
-- ELI is in advanced negotiations with other third party
injectors for use of its pipeline and terminalling facilities.
-- Construction of the pipeline continues to progress and hook
up with ELI Akaso is expected to take place in H2 2021.
Outlook 2021
-- The commissioning of the ELI pipeline.
-- Expected close out of the Oza transaction.
-- Continuing to position the Company for further transactions.
Oisin Fanning, CEO of San Leon, Commented:
"The period under review has been one of considerable
uncertainty globally. Despite this, San Leon has continued to
deliver its strategy. 2020 saw operational progress at OML 18 in
preparation for its next stage of development, tempered by the
macroeconomic environment. On a corporate level, we are very
pleased to have been able to return just over $33 million to
shareholders while also building and diversifying our portfolio
with the Oza and ELI transactions, respectively. Our underlying
strategy remains unchanged to deliver sustainable value to our
shareholders."
Enquiries:
+ 353 1291
San Leon Energy plc 6292
Oisin Fanning, Chief Executive
Allenby Capital Limited
(Nominated adviser and joint broker +44 20 3328
to the Company) 5656
Nick Naylor
Alex Brearley
Panmure Gordon & Co (Joint broker to +44 20 7886
the Company) 2500
Nick Lovering
Brandon Hill Capital Limited +44 20 3463
(Joint broker to the Company) 5000
Oliver Stansfield, Jonathan Evans
Tavistock +44 20 7920
(Financial Public Relations) 3150
Nick Elwes, Simon Hudson
+353 1 230
Plunkett Public Relations 3781
Sharon Plunkett
Qualified Person's Statement
Pursuant to the requirements of the AIM Rules and in particular,
the AIM Note for Mining and Oil and Gas Companies, Joel Price has
reviewed and approved the technical information and resource
reporting contained in this announcement. Joel has more than 25
years' experience in the oil & gas industry and is a member of
the Society of Petroleum Engineers. He holds a BA in Natural
Sciences (Geology) from Cambridge University, an MEng in Petroleum
Engineering from Heriot-Watt University, and an MBA from Durham
University. Joel is Chief Operating Officer for San Leon Energy and
is based in the United Kingdom.
Chairman's statement
As we went into 2020, there had been significant turmoil in the
financial markets due to the impact of the Covid-19 pandemic. This,
along with certain geopolitical issues, had also led to a sharp
fall and continued volatility in the oil price, which continued for
much of 2020.
During this sustained period of reduced demand, San Leon
continued to deliver further shareholder returns. An additional
US$46.5 million was received in cash from the loan notes mechanism
relating to its OML 18 investment during the year, which enabled us
to announce the inaugural special dividend of US$33.3 million in
April 2020.
On receipt of US$40.0 million in Loan Note repayments (principal
and interest) in April 2020, the Company amended the terms of the
Loan Notes, extending the term out to December 2021. The Company
anticipates the remaining outstanding balance at 31 December 2020
of US$ 84.2 million , including interest, to be repaid, however
given the issues around Covid-19, volatility in the oil price and
demand as well as short term production issues at the asset level,
the Company is not confident of repayments being received on time.
This has resulted in a credit impairment of the Loan Notes due to
uncertainty in timing of these repayments.
The Company's financial position enabled it to take advantage of
potential value-adding opportunities, and I am pleased to report
that San Leon did so during the second half of 2020, acquiring an
interest in ELI and announcing the proposed Oza field
investment.
Last year I reported that Eroton had continued to drill its
three-well campaign and progressed the new oil export system. The
drilling campaign was successfully completed during 2020, and the
new oil export system, ACOES, is expected to be operational during
H2 2021.
I continue to believe that we should not expect significant
long-term impacts resulting from the sustained economic downturn,
to our indirect interest in OML 18 or the underlying asset, however
we have credit impaired the MLPL Loan Notes due to these increased
risks previously mentioned. San Leon and Eroton, the operator of
OML 18, continue to observe work from home where possible for
office employees, while continuing to adjust field location
rotations and managing working capital. Naturally, the operational
deferrals, OPEC production restrictions and increased production
downtime have reduced production during 2020 and have some natural
delay in achieving future production increases from new well
drilling. Alongside the revival in oil prices post the reporting
period, I expect Eroton to start to consider when to restart well
operations with an aim to boosting production on what we consider
to be a world-class asset.
West Africa, focusing on Nigeria, is where San Leon's activities
and resources will continue to be concentrated, and we expect this
focus to continue to deliver value for shareholders.
Our investment in ELI is expected to yield attractive returns to
the Company from its loan plus equity component, and we anticipate
the ACOES and FSO will be commissioned in the second half of 2021.
We continue to finalise our investment in the Oza marginal field,
within the broader OML 11 block, onshore Nigeria. This is an
existing field with some production history, where we believe
workovers and new drilling can release the asset's expected
inherent value. Again, a relatively low-risk investment with a cash
sweep, combined with an equity interest via the Risk Service
Provider on Oza, fits well with the Company's strategy to broaden
its portfolio in Nigeria using limited risk investments with
near-term targeted cash flow. This transaction is still awaiting
final conditions precedents to complete.
The Company still retains two non--Nigerian, non-core assets.
These are the Durresi block o shore Albania, for which a farm out
is being sought, and the Company's Net Pro t Interest ("NPI") in
the Barryroe field, offshore Ireland, the operator, Providence
Resources plc, continues to work on a funding solution which is
expected by Providence to conclude by the end of the third quarter
in time to meet drilling in 2022 and progress development of the
field.
The Company has nearly completed its exit from Poland, with the
small amount of remaining activity being administrative. The
Company continues to hold certain NPIs in relation to Polish
licences.
The assets of NovaSeis are planned to be sold as part of the
Company's exit from Poland, with the majority of non-seismic
equipment having already been sold.
Staff welfare is of utmost importance to us and as such at San
Leon Energy plc we have also been working remotely whenever
possible since March 2020 as mandated by the different governments
in the countries in which we have a presence. All employees and
consultants have continued to be actively engaged regardless of the
home working conditions.
As at 18 June 2021 San Leon had unrestricted cash on hand of
US$8.0 million, however given the issues around Covid-19,
volatility in the oil price and demand as well as short term
production issues at the asset level, the Company is not confident
of repayments being received on time. This has resulted in a credit
impairment of the Loan Notes due to uncertainty in timing of
repayments. Our cash inflows have allowed the Company not only to
survive the on-going market turmoil, but also to take advantage of
potential value-adding opportunities. The Company continues to
monitor the situation and is managing its financial position
accordingly.
During 2020 , the Company appointed Adekolapo Ademola as a
Non-Executive Director. Adekolapo brings a wealth of experience
across a variety of disciplines with a strong focus on Nigeria.
John Brown was recently appointed as Independent Non-Executive
Director and the Chair of the Audit and Risk Committee. John brings
20 years of international experience in the oil and gas and related
industries , including 10 years in West Africa . Following John's
appointment and as part of a corporate governance review conducted
in conjunction with its search for a new non-executive director,
Alan Campbell, Director of Commercial & Business Development,
also stepped down from the Board. I am grateful to Alan for
stepping down from his Board role at this time as part of our
corporate governance Board restructuring, where there is now an
equal balance of three Non-Executive Directors and three Executive
Directors. Alan was a key figure in San Leon's growth and
transformation during his time as a Director. He will remain a part
of the Company's executive management team and continue to
contribute to San Leon's commercial and business operations going
forward. He also remains as Company Secretary. The Company would
like to thank Non-Executive Directors, Mark Phillips, Bill Higgs
and Linda Beal, who left the Board during the period, for their
service and wish them well for the future.
During July, Allenby Capital Limited was appointed as the
Company's Nominated Adviser and Joint Broker. At the same time,
pursuant to the acquisition of Whitman Howard Limited by Panmure
Gordon & Co ("Panmure Gordon"), the Company appointed Panmure
Gordon as its Joint Broker.
Environment, Social and Governance ("ESG") is an area of
increasing importance for businesses and investors. We constituted
a formal Committee of the Board during December 2020 to oversee San
Leon's ESG strategy and initiatives. This is an area to which San
Leon continues to be committed and our focus in 2021 is in
developing our own ESG strategy, which the Company anticipates will
meet the expectations of good international industry practice. As
part of this we will continue ongoing engagement with all
stakeholders and governments to ensure that we operate our business
in a way that is sustainable and benefits the local communities in
which we have a presence. The Company continued several initiatives
during the course of 2020 in Nigeria including the provision of
educational support for disadvantaged children, the building of a
new medical centre, and construction of a new classroom block at a
school in Benue State. This is in addition to our ongoing support
of women-led small enterprises in Nassarawa and Benue States and
the installation of motorised water boreholes .
With its increasing technical involvement in OML 18,
relationships in-country, additional investments in ELI and Oza
(yet to be completed), and funds expected in the future, we believe
San Leon is well-positioned to continue to realise value for
shareholders from Nigeria. With the stabilised oil price and
planned ACOES, we hope to see an improvement in the short term
production issues at the asset level, and continue to monitor the
situation closely.
Our strategy continues to include the delivery of sustainable
long-term returns to shareholders. We aim to achieve this through a
combination of returns to shareholders and also growth in our asset
base.
I look forward with confidence to updating shareholders on the
achievement of these aims.
Mutiu Sunmonu Chairman
CEO's statement
OML 18 IS POSITIONED FOR ITS NEXT STAGE IN DEVELOPMENT
2020 saw operational progress at OML 18 in preparation for its
next stage of development, tempered by the macroeconomic
environment.
Eroton completed its three-well drilling programme and the new
oil export system (Alternative Crude Oil Evacuation and Storage
system, or "ACOES") had continued to progress its implementation.
Following year end, the FSO has arrived in Nigerian waters. Such
operational activity, together with expected future well work, is
we believe, the key to the anticipated unlocking of further value
for the stakeholders in OML 18.
Both gross production at the wellhead and sales oil volumes were
lower than expected. This was due to downtime; allocated pipeline
losses associated with the use of the Nembe Creek Trunk Line
("NCTL"); Covid-related operational delays; prudent reduced
operational expenditure and capital expenditure spending as a
result of lower oil price; and also, OPEC production quota
restrictions. Gross oil production, taking out the e ect of NCTL
downtime, (but after reductions for OPEC quota production
restrictions), was around 32,000 bopd. Sales oil, including the e
ects of downtime and allocated losses, and of OPEC quota production
restrictions, was around 21,000 bopd.
The most positive impact on OML 18 oil sales is expected to be
Eroton's agreement with Energy Link Infrastructure (Malta) Limited
("ELI"). ELI is financing and constructing the ACOES and once
commissioned, this system is expected, by Eroton, to significantly
reduce the downtime and allocated pipeline losses currently
associated with the NCTL. The NCTL was responsible for the majority
of the approximately 11,000 bopd difference between gross
production, when the pipeline is running, and average sales oil. In
addition, it is anticipated that the ACOES and FSO project will
greatly improve overall well uptime.
San Leon continues to be involved with the subsurface technical
input into OML 18 and has a contract to provide such services on
OML 18, providing geoscience and engineering resource into well and
reservoir planning for new wells. We believe that OML 18 is a world
class asset and one that we look forward to developing further with
our partners.
Additions to our asset base
I have previously been clear that San Leon's strong cash
position, professional relationships and technical capability would
be used to broaden our portfolio of assets, particularly where
market forces make financial strength a differentiator. To that
end, we were pleased to announce our investment in ELI.
The Company invested US$15.0 million into ELI as a loan, whilst
securing a 10% equity interest in ELI. Repayments are expected from
31 July 2021 adding to our cashflow in the second half of the year.
It is anticipated that the pipeline will be commissioned during the
second half of 2021 and we are pleased to report that third party
sales are planned to commence during the second half of 2021. It is
expected that Eroton volumes will commence during H2 which will
then complete the vital role in optimising cashflow from OML 18.
The ELI investment is also expected to be a value-adding asset for
Company shareholders as part of a broader portfolio.
Additionally, San Leon also announced an investment of US$7.5
million into Decklar during 2020, which is still to complete. This
transaction involves Decklar, as Risk Service Provider to the
operator of the Oza field, performing workover and new well
drilling to develop the reserves and contingent resources on what
is a proven producing field with existing infrastructure. Under the
terms of the financing, SLE have rights to a cash sweep until the
loan coupon is repaid, with an option to purchase an additional 15%
equity holding (30% in total) on the same terms following the
initial development well. With near term operations imminent, I
look forward to updating you after the first well results are known
and in relation to the completion of the investment.
San Leon also notes the announcement by Providence Resources plc
that it has terminated the farm-out agreement with SpotOn Energy
for the Barryroe Licence and is progressing arrangements for an
alternative funding package to finance 100% of the costs of the
early development scheme ("EDS") for the Barryroe licence (SEL
1/11). San Leon retains a 4.5% Net Profit Interest over the
Barryroe field, one of the largest undeveloped discoveries in
Western Europe, with independently appraised 2C resources of 346
MMboe and significant further resource potential in additional
reservoirs. The Company continues to follow these negotiations with
interest.
Cash ow
The Company has four anticipated sources of cash ow, as it
builds its portfolio in line with its stated strategy. As of 31
December 2020, cash receipts totalling US$195.6 million have come
from the repayment of MLPL Loan Notes, including interest. The
outstanding balance payable as of 18 June 2021 is US$93.2 million*
at par value (US$92.4 million under IFRS), which continues to
accrue interest. Final payment of the MLPL Loan Notes was
anticipated by the end of 2021, however due to issues around
Covid-19, volatility in the oil price and demand as well as short
term production issues on OML 18, the Company believes this date is
unlikely to be met. The Company is still confident in receiving all
repayments and late payment interest, however in line with our
accounting policy we have recognised a credit impairment to reflect
the uncertainty around timing of repayments.
Repayments of loan notes from our investment in ELI are due to
commence in July this year.
The Company will also generate income from the provision of
subsurface technical services to Eroton which will align with field
development expected in 2022. In addition, future OML 18 rig
activity is an opportunity for the Company to generate income from
the provision of services under its Master Service Agreement with
Eroton.
Cash ow from the Company's indirect shareholding in Eroton is
anticipated once OML 18 is generating su cient free cash ow. We are
also hopeful of future dividends from our equity interest in ELI in
the medium to long term.
Corporate
Further shareholder returns were provided in 2020 via the
Company's first special dividend of US$33.3 million, in line with
the Company's announced policy. This follows on from share
repurchases of US$2.0 million over October 2019 to January
2020.
ESG
As discussed in the Chairman's statement ESG is an area of
increasing importance. This is an area in which San Leon is
committed to meeting high standards of ESG practices across all
aspects of the business. The Company is committed to the countries
in which it operates and is dedicated to promoting sustainable
growth as well as providing support to local communities in
Nigeria. The Company firmly believes that by providing the younger
generation with the valuable skills and education needed to
succeed, the whole country will benefit from growth and
prosperity.
Outlook
The Oil price was significantly impacted for the majority of
2020, due to the combined effects of Covid-19 affecting demand, and
quota disagreements within OPEC regarding how to deal with that
reduction in demand. This uncertainty presented the Company with
both risks and opportunities, and we are delighted to see that the
oil priced has strengthened considerably in 2021. The opportunities
taken to date were the investment in and loan to ELI and the
expected finalisation of the investment in Oza (still to
complete).
The Company has cash in hand as at 18 June 2021 of US$14.8
million, and with future loan note repayments, we believe it will
put us in a position to continue moving forward with our strategy
and capitalising on accretive opportunities. The Company continues
to monitor the performance of OML 18, and is ready to pursue any
appropriate opportunities that may arise in the current market.
I look forward to updating shareholders with news of the impact
of the ACOES on OML 18, plans for operations on OML 18 as we
hopefully emerge from macroeconomic issues, and how our various
expected cash ow streams are performing. The Company is in a good
position, with several future cash streams, and together with its
professional relationships and people, I believe is well-positioned
to grow and add further value to shareholders.
OisÃn Fanning
CEO
* Refer to Alternate Performance Measures for full
reconciliation of IFRS numbers and Alternative Performance
Measures
Consolidated Income Statement
for the year ended 31 December 2020
Notes 2020 2019
US$'000 US$'000
(Restated
*)
---------------------------------------------- ----- -------- ----------
Continuing operations
---------------------------------------------- ----- -------- ----------
Revenue from contracts with customers 2 - 266
---------------------------------------------- ----- -------- ----------
Cost of sales - (148)
---------------------------------------------- ----- -------- ----------
Gross profit - 118
---------------------------------------------- ----- -------- ----------
Share of loss of equity accounted investments 6 (1,139) (9,214)
---------------------------------------------- ----- -------- ----------
Administrative expenses (14,918) (14,899)
---------------------------------------------- ----- -------- ----------
Loss on disposal of subsidiaries 3 (1,044) (13,770)
---------------------------------------------- ----- -------- ----------
Impairment / write off of exploration
and evaluation assets (196) (1,407)
---------------------------------------------- ----- -------- ----------
Other income - 1,400
---------------------------------------------- ----- -------- ----------
Loss from operating activities (17,297) (37,772)
---------------------------------------------- ----- -------- ----------
Finance expense (131) (144)
---------------------------------------------- ----- -------- ----------
Finance income 4 17,442 24,123
---------------------------------------------- ----- -------- ----------
Expected credit losses (13,692) 3,465
---------------------------------------------- ----- -------- ----------
Fair value movements in financial assets 8 4,073 (48,373)
---------------------------------------------- ----- -------- ----------
Loss before income tax (9,605) (58,701)
---------------------------------------------- ----- -------- ----------
Income tax (2,248) 14,079
---------------------------------------------- ----- -------- ----------
Loss for the financial year (11,853) (44,622)
---------------------------------------------- ----- -------- ----------
Loss per share (cent) - total
---------------------------------------------- ----- -------- ----------
Basic loss per share 5 (2.63) (9.57)
---------------------------------------------- ----- -------- ----------
Diluted loss per share 5 (2.63) (9.57)
---------------------------------------------- ----- -------- ----------
* See Note 6 for details on restated amounts
The accompanying notes below form an integral part of these
financial statements.
Consolidated Statement of
Other Comprehensive Income
for the year ended 31 December 2020
2020 2019
US$'000 US$'000
(Restated
Notes *)
------------------------------------------------ ----- -------- ----------
Loss for the year (11,853) (44,622)
------------------------------------------------ ----- -------- ----------
Items that may be reclassified subsequently
to profit or loss
------------------------------------------------ ----- -------- ----------
Currency translation differences - subsidiaries 83 (26)
------------------------------------------------ ----- -------- ----------
Recycling of currency translation reserve
on disposal of subsidiaries 1,044 13,870
------------------------------------------------ ----- -------- ----------
Fair value movements in financial assets 8 (194) (2,625)
------------------------------------------------ ----- -------- ----------
Deferred tax on fair value movements in
financial assets - 40
------------------------------------------------ ----- -------- ----------
Total other comprehensive income 933 11,259
------------------------------------------------ ----- -------- ----------
Total comprehensive loss for the year (10,920) (33,363)
------------------------------------------------ ----- -------- ----------
* See Note 6 for details on restated amounts
Consolidated Statement
of Changes in Equity
for the year ended 31 December 2020
Shares Attributable
Share to to
Share Share Other Currency based be Fair equity
capital premium un-denominated Special translation payment issued value Retained holders
reserve reserve reserve reserve reserve reserve reserve reserve earnings in Group
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
-------------- ------- ------- -------------- ------- ----------- ------- ------- -------- --------- ------------
2019
-------------- ------- ------- -------------- ------- ----------- ------- ------- -------- --------- ------------
Balance
as at
1 January
2019 150,600 478,666 - - 10,777 14,977 2,099 80 (396,049) 261,150
-------------- ------- ------- -------------- ------- ----------- ------- ------- -------- --------- ------------
Restatements
*:
-------------- ------- ------- -------------- ------- ----------- ------- ------- -------- --------- ------------
Share of
loss of
equity
accounted
investments - - - - - - - - (1,058) (1,058)
-------------- ------- ------- -------------- ------- ----------- ------- ------- -------- --------- ------------
Balance
as at
1 January
2019
(Restated) 150,600 478,666 - - 10,777 14,977 2,099 80 (397,107) 260,092
-------------- ------- ------- -------------- ------- ----------- ------- ------- -------- --------- ------------
Total
comprehensive
income for
year
-------------- ------- ------- -------------- ------- ----------- ------- ------- -------- --------- ------------
Loss for
the year
(Restated
*) - - - - - - - - (44,622) (44,622)
-------------- ------- ------- -------------- ------- ----------- ------- ------- -------- --------- ------------
Other
comprehensive
income
-------------- ------- ------- -------------- ------- ----------- ------- ------- -------- --------- ------------
Recycling
of currency
translation
reserve
on disposal
of
subsidiaries - - - - 13,870 - - - - 13,870
-------------- ------- ------- -------------- ------- ----------- ------- ------- -------- --------- ------------
Foreign
currency
translation
differences
-
subsidiaries - - - - (26) - - - - (26)
-------------- ------- ------- -------------- ------- ----------- ------- ------- -------- --------- ------------
Fair value
movements
in financial
assets - - - - - - - (2,625) - (2,625)
-------------- ------- ------- -------------- ------- ----------- ------- ------- -------- --------- ------------
Deferred
tax on fair
value
movements
in financial
assets - - - - - - - 40 - 40
-------------- ------- ------- -------------- ------- ----------- ------- ------- -------- --------- ------------
Total
comprehensive
income for
year - - - - 13,844 - - (2,585) (44,622) (33,363)
-------------- ------- ------- -------------- ------- ----------- ------- ------- -------- --------- ------------
The accompanying notes below form an integral part of these
financial statements.
Transactions
with owners
recognised
directly
in equity
---------------------- ----------- ----------- --- ------- ------ ------- ------- ------- --------- --------
Contributions
by and distributions
to owners
---------------------- ----------- ----------- --- ------- ------ ------- ------- ------- --------- --------
Tender offer
(Note 10) (144,871) (459,721) - 5,024 - - - - 599,568 -
---------------------- ----------- ----------- --- ------- ------ ------- ------- ------- --------- --------
Reduction
of capital
(Note 10) (576) - 576 - - - - - (30,512) (30,512)
---------------------- ----------- ----------- --- ------- ------ ------- ------- ------- --------- --------
Share buybacks
(Note 10) (47) - 47 - - - - - (1,535) (1,535)
---------------------- ----------- ----------- --- ------- ------ ------- ------- ------- --------- --------
Share-based
payment - - - - - 848 - - - 848
---------------------- ----------- ----------- --- ------- ------ ------- ------- ------- --------- --------
Issue of
shares in
lieu of
salary 63 2,036 - - - - (2,099) - - -
---------------------- ----------- ----------- --- ------- ------ ------- ------- ------- --------- --------
Effect of
share options
exercised 3 96 - - - (72) - - 72 99
---------------------- ----------- ----------- --- ------- ------ ------- ------- ------- --------- --------
Effect of
repricing
of share
options - - - - - 219 - - - 219
---------------------- ----------- ----------- --- ------- ------ ------- ------- ------- --------- --------
Effect of
options
expired - - - - - (1,680) - - 1,680 -
---------------------- ----------- ----------- --- ------- ------ ------- ------- ------- --------- --------
Total transactions
with owners (145,428) (457,589) 623 5,024 - (685) (2,099) - 569,273 (30,881)
---------------------- ----------- ----------- --- ------- ------ ------- ------- ------- --------- --------
Balance
at
31 December
2019 5,172 21,077 623 5,024 24,621 14,292 - (2,505) 127,544 195,848
---------------------- ----------- ----------- --- ------- ------ ------- ------- ------- --------- --------
* The balance at 1 January 2019 has been restated to account for
the following:
The share of loss of equity accounted investments increased by
US$1.1 million in 2018 resulting in a decrease in the Company's
equity by the same amount, see Note 6 for full details.
The accompanying notes below form an integral part of these
financial statements.
Shares Attributable
Other Special Share to to
Share Share un-denominated reserve Currency based be Fair equity
capital premium reserve US$'000 translation payment issued value Retained holders
reserve reserve US$'000 reserve reserve reserve reserve earnings in Group
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
-------------- -------- ------- --------------- -------- ----------- ------- ------- -------- -------- ------------
2020
--------------- ------- ------- --------------- -------- ----------- ------- ------- -------- -------- ------------
Balance as
at
1 January
2020 5,172 21,077 623 5,024 24,621 14,292 - (2,505) 127,544 195,848
--------------- ------- ------- --------------- -------- ----------- ------- ------- -------- -------- ------------
Total
comprehensive
income for
year
--------------- ------- ------- --------------- -------- ----------- ------- ------- -------- -------- ------------
Loss for
the year - - - - - - - - (11,853) (11,853)
-------------- -------- ------- --------------- -------- ----------- ------- ------- -------- -------- ------------
Other
comprehensive
income
-------------- -------- ------- --------------- -------- ----------- ------- ------- -------- -------- ------------
Foreign
currency
translation
differences
-
subsidiaries - - - - 83 - - - - 83
-------------- -------- ------- --------------- -------- ----------- ------- ------- -------- -------- ------------
Recycling
of currency
translation
reserve
on disposal
of
subsidiaries - - - - 1,044 - - - - 1,044
-------------- -------- ------- --------------- -------- ----------- ------- ------- -------- -------- ------------
Fair value
movements
in financial
assets - - - - - - - (194) - (194)
-------------- -------- ------- --------------- -------- ----------- ------- ------- -------- -------- ------------
Deferred - - - - - - - - - -
tax on fair
value
movements
in financial
assets
-------------- -------- ------- --------------- -------- ----------- ------- ------- -------- -------- ------------
Total
comprehensive
income for
year - - - - 1,127 - - (194) (11,853) (10,920)
-------------- -------- ------- --------------- -------- ----------- ------- ------- -------- -------- ------------
Transactions
with owners
recognised
directly
in equity
---------------------- ----- ------ --- ----- ------ ------ ------- -------- --------
Contributions
by and distributions
to owners
---------------------- ----- ------ --- ----- ------ ------ ------- -------- --------
Tender offer - - - - - - - - - -
(Note 10)
---------------------- ----- ------ --- ----- ------ ------ ------- -------- --------
Dividend
payment - - - - - - - - (33,251) (33,251)
---------------------- ----- ------ --- ----- ------ ------ ------- -------- --------
Reduction - - - - - - - - - -
of capital
(Note 10)
---------------------- ----- ------ --- ----- ------ ------ ------- -------- --------
Share buybacks
(Note 10) (15) - 15 - - - - - (507) (507)
---------------------- ----- ------ --- ----- ------ ------ ------- -------- --------
Share-based
payment - - - - - 417 - - - 417
---------------------- ----- ------ --- ----- ------ ------ ------- -------- --------
Issue of - - - - - - - - - -
shares in
lieu of
salary
---------------------- ----- ------ --- ----- ------ ------ ------- -------- --------
Effect of
share options
modified - - - - - 473 - - - 473
---------------------- ----- ------ --- ----- ------ ------ ------- -------- --------
Effect of - - - - - - - - - -
repricing
of share
options
---------------------- ----- ------ --- ----- ------ ------ ------- -------- --------
Effect of
options
expired - - - - - (43) - - 43 -
---------------------- ----- ------ --- ----- ------ ------ ------- -------- --------
Total transactions
with owners (15) - 15 - - 847 - - (33,715) (32,868)
---------------------- ----- ------ --- ----- ------ ------ ------- -------- --------
Balance
at
31 December
2020 5,157 21,077 638 5,024 25,748 15,139 -(2,699) 81,976 152,060
---------------------- ----- ------ --- ----- ------ ------ ------- -------- --------
The accompanying notes below form an integral part of these
financial statements.
Company Statement
of Changes in Equity
for the year ended 31 December 2020
Shares
Other Share- to
un-denominated Currency based be Fair
Share Share reserve Special translation payment issued value Retained Total
capital premium US$'000 reserve reserve reserve reserve reserve earnings equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
-------------- ----------- ----------- --------------- ------- ----------- ------- ------- ------- --------- --------
2019
-------------- ----------- ----------- --------------- ------- ----------- ------- ------- ------- --------- --------
Balance as at
1
January 2019 150,600 478,666 - - - 14,977 2,099 80 (416,122) 230,300
-------------- ----------- ----------- --------------- ------- ----------- ------- ------- ------- --------- --------
Total
comprehensive
income
-------------- ----------- ----------- --------------- ------- ----------- ------- ------- ------- --------- --------
Profit for the
year - - - - - - - - (12,284) (12,284)
-------------- ----------- ----------- --------------- ------- ----------- ------- ------- ------- --------- --------
Fair value
movements
in financial
assets - - - - - - - (2,625) - (2,625)
-------------- ----------- ----------- --------------- ------- ----------- ------- ------- ------- --------- --------
Deferred tax
on
fair value
movements
in financial
assets - - - - - - - 40 - 40
-------------- ----------- ----------- --------------- ------- ----------- ------- ------- ------- --------- --------
Total
comprehensive
income
for the year - - - - - - - (2,585) (12,284) (14,869)
-------------- ----------- ----------- --------------- ------- ----------- ------- ------- ------- --------- --------
Transactions
with
owners
recognised
directly in
equity
-------------- ----------- ----------- --------------- ------- ----------- ------- ------- ------- --------- --------
Contributions
by
and
distributions
to owners
-------------- ----------- ----------- --------------- ------- ----------- ------- ------- ------- --------- --------
Tender offer
and
reduction of
capital
(Note 10) (144,871) (459,721) - 5,024 - - - - 599,568 -
-------------- ----------- ----------- --------------- ------- ----------- ------- ------- ------- --------- --------
Reduction of
capital
(Note 10) (576) - 576 - - - - - (30,512) (30,512)
-------------- ----------- ----------- --------------- ------- ----------- ------- ------- ------- --------- --------
Share buybacks
(Note 10) (47) - 47 - - - - - (1,535) (1,535)
-------------- ----------- ----------- --------------- ------- ----------- ------- ------- ------- --------- --------
Share-based
payment - - - - - 848 - - - 848
-------------- ----------- ----------- --------------- ------- ----------- ------- ------- ------- --------- --------
Issue of
shares
in lieu of
salary 63 2,036 - - - - (2,099) - - -
-------------- ----------- ----------- --------------- ------- ----------- ------- ------- ------- --------- --------
Effect of
share
options
exercised 3 96 - - - (72) - - 72 99
-------------- ----------- ----------- --------------- ------- ----------- ------- ------- ------- --------- --------
Effect of
repricing
of share
options - - - - - 219 - - - 219
-------------- ----------- ----------- --------------- ------- ----------- ------- ------- ------- --------- --------
Effect of
options
expired - - - - - (1,680) - - 1,680 -
-------------- ----------- ----------- --------------- ------- ----------- ------- ------- ------- --------- --------
Total
transactions
with owners (145,428) (457,589) 623 5,024 - (685) (2,099) - 569,273 (30,881)
-------------- ----------- ----------- --------------- ------- ----------- ------- ------- ------- --------- --------
Balance at 31
December
2019 5,172 21,077 623 5,024 - 14,292 - (2,505) 140,867 184,550
-------------- ----------- ----------- --------------- ------- ----------- ------- ------- ------- --------- --------
The accompanying notes below form an integral part of these
financial statements.
Share Shares
Other Currency based to Fair
Share Share un-denominated Special translation payment be issued value Retained Total
capital premium reserve reserve reserve reserve reserve reserve earnings equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
---- -------- -------- --------------- --------- ------------ -------- --------- -------- --------- --------
2020
---- -------- -------- --------------- --------- ------------ -------- --------- -------- --------- --------
Balance as at
1 January 2020 5,172 21,077 623 5,024 - 14,292 - (2,505) 140,867 184,550
----------------------- ------- -------- ----- ------- --- -------- --- --------- --------- ---------
Total comprehensive
income
----------------------- ------- -------- ----- ------- --- -------- --- --------- --------- ---------
Loss for the year - - - - - - - - (9,946) (9,946)
----------------------- ------- -------- ----- ------- --- -------- --- --------- --------- ---------
Fair value movements
in financial assets - - - - - - - - - -
----------------------- ------- -------- ----- ------- --- -------- --- --------- --------- ---------
Deferred tax on
fair value movements - - - - - - - - - -
in financial assets
----------------------- ------- -------- ----- ------- --- -------- --- --------- --------- ---------
Total comprehensive
income
for the year - - - - - - - - (9,946) (9,946)
----------------------- ------- -------- ----- ------- --- -------- --- --------- --------- ---------
Transactions with
owners recognised
directly in equity
----------------------- ------- -------- ----- ------- --- -------- --- --------- --------- ---------
Contributions by
and distributions
to owners
----------------------- ------- -------- ----- ------- --- -------- --- --------- --------- ---------
Tender offer and
reduction of capital - - - - - - - - - -
(Note 10)
----------------------- ------- -------- ----- ------- --- -------- --- --------- --------- ---------
Dividend payment - - - - - - - - (33,251) (33,251)
----------------------- ------- -------- ----- ------- --- -------- --- --------- --------- ---------
Reduction of capital - - - - - - - - - -
(Note 10)
----------------------- ------- -------- ----- ------- --- -------- --- --------- --------- ---------
Share buybacks
(Note 10) (15) - 15 - - - - - (507) (507)
----------------------- ------- -------- ----- ------- --- -------- --- --------- --------- ---------
Share-based payment - - - - - 417 - - - 417
----------------------- ------- -------- ----- ------- --- -------- --- --------- --------- ---------
Issue of shares - - - - - - - - - -
in lieu of salary
----------------------- ------- -------- ----- ------- --- -------- --- --------- --------- ---------
Effect of share
options modified - - - - - 473 - - - 473
----------------------- ------- -------- ----- ------- --- -------- --- --------- --------- ---------
Effect of repricing
of share options - - - - - - - - - -
----------------------- ------- -------- ----- ------- --- -------- --- --------- --------- ---------
Effect of options
expired - - - - - (43) - - 43 -
----------------------- ------- -------- ----- ------- --- -------- --- --------- --------- ---------
Total transactions
with owners (15) - 15 - - 847 - - (33,715) (32,868)
----------------------- ------- -------- ----- ------- --- -------- --- --------- --------- ---------
Balance at 31 December
2020 5,157 21,077 638 5,024 - 15,139 - (2,505) 97,206 141,736
----------------------- ------- -------- ----- ------- --- -------- --- --------- --------- ---------
The accompanying notes form an integral part of these financial
statements.
Consolidated Statement
of Financial Position
as at 31 December 2020
2019 2018
2020 US$'000 US$'000
US$'000 (Restated (Restated
Notes *) *)
------------------------------------------------- ----- --------- ---------- ----------
Assets
------------------------------------------------- ----- --------- ---------- ----------
Non-current assets
------------------------------------------------- ----- --------- ---------- ----------
Intangible assets - - -
------------------------------------------------- ----- --------- ---------- ----------
Equity accounted investments 6 44,102 44,798 54,012
------------------------------------------------- ----- --------- ---------- ----------
Property, plant and equipment 3,294 4,344 1,964
------------------------------------------------- ----- --------- ---------- ----------
Financial assets 8 17,846 2,963 124,876
------------------------------------------------- ----- --------- ---------- ----------
Deferred tax asset - 1,718 -
------------------------------------------------- ----- --------- ---------- ----------
Other non-current assets - - 206
------------------------------------------------- ----- --------- ---------- ----------
65,242 53,823 181,058
------------------------------------------------- ----- --------- ---------- ----------
Current assets
------------------------------------------------- ----- --------- ---------- ----------
Inventory 183 180 272
------------------------------------------------- ----- --------- ---------- ----------
Trade and other receivables 1,878 987 2,440
------------------------------------------------- ----- --------- ---------- ----------
Financial assets 8 72,889 112,252 57,611
------------------------------------------------- ----- --------- ---------- ----------
Cash and cash equivalents 18,510 36,697 40,762
------------------------------------------------- ----- --------- ---------- ----------
93,460 150,116 101,085
------------------------------------------------- ----- --------- ---------- ----------
Total assets 158,702 203,939 282,143
------------------------------------------------- ----- --------- ---------- ----------
Equity and liabilities
------------------------------------------------- ----- --------- ---------- ----------
Equity
------------------------------------------------- ----- --------- ---------- ----------
Called up share capital 10 5,157 5,172 150,600
------------------------------------------------- ----- --------- ---------- ----------
Share premium account 10 21,077 21,077 478,666
------------------------------------------------- ----- --------- ---------- ----------
Other undenominated reserve 638 623 -
------------------------------------------------- ----- --------- ---------- ----------
Special reserve 5,024 5,024 -
------------------------------------------------- ----- --------- ---------- ----------
Share-based payments reserve 15,139 14,292 14,977
------------------------------------------------- ----- --------- ---------- ----------
Shares to be issued reserve - - 2,099
------------------------------------------------- ----- --------- ---------- ----------
Currency translation reserve 25,748 24,621 10,777
------------------------------------------------- ----- --------- ---------- ----------
Fair value reserve (2,699) (2,505) 80
------------------------------------------------- ----- --------- ---------- ----------
Retained earnings 81,976 127,544 (397,107)
------------------------------------------------- ----- --------- ---------- ----------
Total equity attributable to equity shareholders 152,060 195,848 260,092
------------------------------------------------- ----- --------- ---------- ----------
Non-current liabilities
------------------------------------------------- ----- --------- ---------- ----------
Lease liability 2,428 2,501 -
------------------------------------------------- ----- --------- ---------- ----------
Derivative 9 128 659
------------------------------------------------- ----- --------- ---------- ----------
Deferred tax liabilities 518 - 12,404
------------------------------------------------- ----- --------- ---------- ----------
2,955 2,629 13,063
------------------------------------------------- ----- --------- ---------- ----------
2019 2018
2020 US$'000 US$'000
US$'000 (Restated (Restated
Notes *) *)
----------------------------- ------ --------- ---------- ----------
Current liabilities
----------------------------- ------ --------- ---------- ----------
Trade and other payables 3,631 5,406 8,228
------------------------------------- --------- ---------- ----------
Provisions 56 56 760
------------------------------------- --------- ---------- ----------
3,687 5,462 8,988
------------------------------------ --------- ---------- ----------
Total liabilities 6,642 8,091 22,051
------------------------------------- --------- ---------- ----------
Total equity and liabilities 158,702 203,939 282,143
------------------------------------- --------- ---------- ----------
* See Note 6 for details on restated amounts
The accompanying notes below form an integral part of these
financial statements.
OisÃn Fanning Lisa Mitchell
Director Director
Company Statement
of Financial Position
as at 31 December 2020
2020 2019
Notes US$'000 US$'000
---------------------------------------------- ----- -------- --------
Assets
---------------------------------------------- ----- -------- --------
Property, plant and equipment 2,612 3,066
---------------------------------------------- ----- -------- --------
Financial assets 8 6,842 2,769
---------------------------------------------- ----- -------- --------
Financial assets - investment in subsidiaries 7 31,539 31,539
---------------------------------------------- ----- -------- --------
Deferred tax asset - 1,691
---------------------------------------------- ----- -------- --------
40,993 39,065
---------------------------------------------- ----- -------- --------
Current assets
---------------------------------------------- ----- -------- --------
Trade and other receivables 19,992 4,068
---------------------------------------------- ----- -------- --------
Financial assets 8 68,925 112,252
---------------------------------------------- ----- -------- --------
Cash and cash equivalents 18,145 36,388
---------------------------------------------- ----- -------- --------
107,062 152,708
---------------------------------------------- ----- -------- --------
Total assets 148,055 191,773
---------------------------------------------- ----- -------- --------
Equity and liabilities
---------------------------------------------- ----- -------- --------
Equity
---------------------------------------------- ----- -------- --------
Called up share capital 10 5,157 5,172
---------------------------------------------- ----- -------- --------
Share premium account 10 21,077 21,077
---------------------------------------------- ----- -------- --------
Other un-denominated reserve 638 623
---------------------------------------------- ----- -------- --------
Special reserve 5,024 5,024
---------------------------------------------- ----- -------- --------
Share-based payments reserve 15,139 14,292
---------------------------------------------- ----- -------- --------
Fair value reserve (2,505) (2,505)
---------------------------------------------- ----- -------- --------
Retained earnings 97,206 140,867
---------------------------------------------- ----- -------- --------
Attributable to equity shareholders 141,736 184,550
---------------------------------------------- ----- -------- --------
Non-current liabilities
---------------------------------------------- ----- -------- --------
Lease liability 2,428 2,501
---------------------------------------------- ----- -------- --------
Derivative 9 128
---------------------------------------------- ----- -------- --------
Deferred tax liabilities 245 -
---------------------------------------------- ----- -------- --------
2,682 2,629
---------------------------------------------- ----- -------- --------
Current liabilities
---------------------------------------------- ----- -------- --------
Trade and other payables 3,637 4,594
---------------------------------------------- ----- -------- --------
3,637 4,594
---------------------------------------------- ----- -------- --------
Total liabilities 6,319 7,223
---------------------------------------------- ----- -------- --------
Total equity and liabilities 148,055 191,773
---------------------------------------------- ----- -------- --------
The accompanying notes form an integral part of these financial
statements.
OisÃn Fanning Lisa Mitchell
Director Director
Consolidated Statement
of Cash Flows
for the year ended 31 December 2020
2019
2020 US$'000
US$'000 (Restated
Notes *)
---------------------------------------------- ----- --------- ----------
Cash flows from operating activities
---------------------------------------------- ----- --------- ----------
Loss for the year - continuing operations (11,853) (44,622)
---------------------------------------------- ----- --------- ----------
Adjustments for:
---------------------------------------------- ----- --------- ----------
Depletion and depreciation 1,028 960
---------------------------------------------- ----- --------- ----------
Finance expense 131 144
---------------------------------------------- ----- --------- ----------
Finance income 4 (17,442) (24,123)
---------------------------------------------- ----- --------- ----------
Share-based payments charge 890 1,069
---------------------------------------------- ----- --------- ----------
Foreign exchange 113 (403)
---------------------------------------------- ----- --------- ----------
Income tax expense 2,248 (14,079)
---------------------------------------------- ----- --------- ----------
Impairment of exploration and evaluation
assets - continuing operations 196 1,407
---------------------------------------------- ----- --------- ----------
Expected credit losses 13,692 (3,465)
---------------------------------------------- ----- --------- ----------
Loss on disposal of subsidiaries 1,044 13,770
---------------------------------------------- ----- --------- ----------
Decommissioning payments - (702)
---------------------------------------------- ----- --------- ----------
Fair value movements in financial assets 8 (4,073) 48,373
---------------------------------------------- ----- --------- ----------
(Increase) / decrease in inventory (3) 92
---------------------------------------------- ----- --------- ----------
(Increase) / decrease in trade and other
receivables (897) 532
---------------------------------------------- ----- --------- ----------
Decrease in trade and other payables (1,778) (3,876)
---------------------------------------------- ----- --------- ----------
Share of loss of equity-accounted investments 6 1,139 9,214
---------------------------------------------- ----- --------- ----------
Tax paid - (18)
---------------------------------------------- ----- --------- ----------
Net cash outflow from operating activities (15,565) (15,727)
---------------------------------------------- ----- --------- ----------
Cash flows from investing activities
---------------------------------------------- ----- --------- ----------
Expenditure on exploration and evaluation
assets (196) (466)
---------------------------------------------- ----- --------- ----------
Purchase of property, plant and equipment - (82)
---------------------------------------------- ----- --------- ----------
Lease - prepaid rental - (231)
---------------------------------------------- ----- --------- ----------
Loans repaid by Directors - 727
---------------------------------------------- ----- --------- ----------
Interest on Director's loan - 1
---------------------------------------------- ----- --------- ----------
Interest and investment income received 47 278
---------------------------------------------- ----- --------- ----------
Acquisition of ELI Equity Interest (14,557) -
---------------------------------------------- ----- --------- ----------
ELI Loan Notes (443) -
---------------------------------------------- ----- --------- ----------
OML 18 Loan Notes principal payments received 8 35,285 23,361
---------------------------------------------- ----- --------- ----------
OML 18 Loan Notes interest payments received 8 11,215 19,885
---------------------------------------------- ----- --------- ----------
Net cash inflow from investing activities 31,351 43,473
---------------------------------------------- ----- --------- ----------
2019
2020 US$'000
US$'000 (Restated
Notes *)
------------------------------------------- ------ --------- ----------
Cash flows from financing activities
------------------------------------------- ------ --------- ----------
Dividends paid (33,251) -
--------------------------------------------------- --------- ----------
Share buybacks (507) (32,048)
--------------------------------------------------- --------- ----------
Proceeds from issue of shares - 99
--------------------------------------------------- --------- ----------
Repayment of lease liability - principal (211) (192)
--------------------------------------------------- --------- ----------
Interest paid (131) (144)
--------------------------------------------------- --------- ----------
Net cash outflow from financing activities (34,100) (32,285)
--------------------------------------------------- --------- ----------
Net decrease in cash and cash equivalents (18,314) (4,539)
--------------------------------------------------- --------- ----------
Effect of foreign exchange fluctuation
on cash and cash equivalents 127 474
--------------------------------------------------- --------- ----------
Cash and cash equivalents at start of
year 36,697 40,762
--------------------------------------------------- --------- ----------
Cash and cash equivalents at end of year 18,510 36,697
--------------------------------------------------- --------- ----------
* See Note 6 for details on restated amounts
The accompanying notes form an integral part of these financial
statements.
Company Statement of Cash Flows
for the year ended 31 December 2020
2020 2019
Notes US$'000 US$'000
---------------------------------------------- ----- -------- --------
Cash flows from operating activities
---------------------------------------------- ----- -------- --------
Loss for the year (9,946) (12,284)
---------------------------------------------- ----- -------- --------
Adjustments for:
---------------------------------------------- ----- -------- --------
Depletion and depreciation 358 343
---------------------------------------------- ----- -------- --------
Finance income 4 (16,646) (24,123)
---------------------------------------------- ----- -------- --------
Finance expense 131 144
---------------------------------------------- ----- -------- --------
Share-based payments charge 890 1,069
---------------------------------------------- ----- -------- --------
Impairment / (reversal of impairment)
of investment in subsidiaries
and amounts due from Group undertakings 4,020 (6,943)
---------------------------------------------- ----- -------- --------
Fair value movements in financial assets 8 (4,073) 48,373
---------------------------------------------- ----- -------- --------
Expected credit losses 13,307 (3,465)
---------------------------------------------- ----- -------- --------
Foreign exchange 76 (678)
---------------------------------------------- ----- -------- --------
Income tax expense 1,937 (14,084)
---------------------------------------------- ----- -------- --------
(Increase) / decrease in trade and other
receivables (926) 130
---------------------------------------------- ----- -------- --------
Decrease in trade and other payables (968) (2,403)
---------------------------------------------- ----- -------- --------
Tax paid - (18)
---------------------------------------------- ----- -------- --------
Net cash outflow from operating activities (11,840) (13,939)
---------------------------------------------- ----- -------- --------
Cash flows from investing activities
---------------------------------------------- ----- -------- --------
Advances to subsidiary companies (19,010) (2,160)
---------------------------------------------- ----- -------- --------
OML 18 Loan Notes principal payments received 8 35,285 23,361
---------------------------------------------- ----- -------- --------
OML 18 Loan Notes interest payments received 8 11,215 19,885
---------------------------------------------- ----- -------- --------
Loans repaid by Directors - 727
---------------------------------------------- ----- -------- --------
Interest on Director's loan - 1
---------------------------------------------- ----- -------- --------
Interest and investment income received 47 278
---------------------------------------------- ----- -------- --------
Lease - prepaid rental 96 (231)
---------------------------------------------- ----- -------- --------
Purchase of property, plant and equipment - (82)
---------------------------------------------- ----- -------- --------
Net cash inflow from investing activities 27,633 41,779
---------------------------------------------- ----- -------- --------
Cash flows from financing activities
---------------------------------------------- ----- -------- --------
Dividends paid (33,251) -
---------------------------------------------- ----- -------- --------
Share buybacks (507) (32,048)
---------------------------------------------- ----- -------- --------
Proceeds of issue of shares - 99
---------------------------------------------- ----- -------- --------
Repayment on lease obligations (211) (192)
---------------------------------------------- ----- -------- --------
Interest paid (131) (144)
---------------------------------------------- ----- -------- --------
Net cash outflow from financing activities (34,100) (32,285)
---------------------------------------------- ----- -------- --------
2020 2019
Notes US$'000 US$'000
------------------------------------------ ------ -------- --------
Net decrease in cash and cash equivalents (18,307) (4,445)
-------------------------------------------------- -------- --------
Effect of foreign exchange fluctuation
on cash and cash equivalents 64 653
-------------------------------------------------- -------- --------
Cash and cash equivalents at start of
year 36,388 40,180
-------------------------------------------------- -------- --------
Cash and cash equivalents at end of year 18,145 36,388
-------------------------------------------------- -------- --------
The accompanying notes form an integral part of these financial
statements.
Notes to the Financial Statements
for the year ended 31 December 2020
These Notes are truncated but can be viewed in full in the
Annual Report and Accounts for the year ended 31 December 2020.
This document is available on the Company's website at
www.sanleonenergy.com .
1. Accounting Policies
San Leon Energy plc ("the Company") is a company incorporated
and domiciled in the Republic of Ireland. The Company's ordinary
shares are admitted to trading on the AIM Market of the London
Stock Exchange. The Group financial statements consolidate those of
the Company and its subsidiaries (together referred to as the
"Group"). The registered office address is 2 Shelbourne Buildings,
Crampton Avenue, Shelbourne Road, Ballsbridge, Dublin 4.
Statement of compliance
As required by the AIM Rules and permitted by Company Law, the
Group financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS") as adopted by
the EU. The individual financial statements of the Company (Company
financial statements) have been prepared in accordance with IFRS as
adopted by the EU and as applied in accordance with the Companies
Act 2014 which permits a Company that publishes its Company and
Group financial statements together, to take advantage of the
exemption in Section 304 of the Companies Act 2014, from presenting
to its members its Company statement of comprehensive income and
related notes that form part of the approved Company financial
statements. The IFRS adopted by the EU as applied by the Company
and the Group in the preparation of these financial statements are
those that were effective for accounting periods commencing on or
before 1 January 2020 or were early adopted as indicated below.
New standards required by EU companies for the year ended 31
December 2020
The following new standards and amendments were adopted by the
Group and the Company for the first time in the current financial
reporting period.
New standards and interpretations effective that were
adopted
IASB effective EU effective
Standard date date
------------------------------------ --------------- --------------
Definition of material (Amendments
to IAS 1 and IAS 8) 1 January 2020 1 January 2020
------------------------------------ --------------- --------------
Amendments to References to
the Conceptual Framework in
IFRS Standards 1 January 2020 1 January 2020
------------------------------------ --------------- --------------
Interest Rate Benchmark Reform
(Amendments to IFRS 9, IAS
39 and IFRS 7) 1 January 2020 1 January 2020
------------------------------------ --------------- --------------
Definition of a Business (Amendments
to IFRS 3) 1 January 2020 1 January 2020
------------------------------------ --------------- --------------
The standards listed above, are effective from 1 January 2020
but they do not have a material effect on the Group's financial
statements.
New standards and amendments issued by the IASB but not yet
effective
There are a number of new standards, amendments to standards and
interpretations that are not yet effective and have not been
applied in preparing these consolidated financial statements. These
new standards, amendments to standards and interpretations are
either not expected to have a material impact on the Group and the
Company's financial statements or are still under assessment by the
Group and the Company.
The principal new standards, amendments to standards and
interpretations are as follows:
IASB effective
Standard date EU effective date
--------------------------------- ----------------------- -----------------------
COVID-19 Related Rent Concessions
(Amendment to IFRS 16) 1 June 2020 1 June 2020
--------------------------------- ----------------------- -----------------------
Interest Rate Benchmark
Reform - Phase 2 (Amendments
to IFRS 9, IAS 39, IFRS
7, IFRS 4 and IFRS 16) 1 January 2021 1 January 2021
--------------------------------- ----------------------- -----------------------
Onerous Contracts - Cost
of Fulfilling a Contract
(Amendments to IAS 37) 1 January 2022 1 January 2022
--------------------------------- ----------------------- -----------------------
Annual Improvements to IFRS
Standards 2018 - 2020 1 January 2022 1 January 2022
--------------------------------- ----------------------- -----------------------
Property, Plant and Equipment:
Proceeds before Intended
Use (Amendments to IAS 16) 1 January 2022 1 January 2022
--------------------------------- ----------------------- -----------------------
Reference to the Conceptual
Framework (Amendments to
IFRS 3) 1 January 2022 1 January 2022
--------------------------------- ----------------------- -----------------------
Classification of Liabilities
as Current or Non-current
(Amendments to IAS 1) 1 January 2023 1 January 2023
--------------------------------- ----------------------- -----------------------
IFRS 17 Insurance Contracts
and amendments to IFRS 17
Insurance Contracts 1 January 2023 1 January 2023
--------------------------------- ----------------------- -----------------------
Sale or Contribution of
Assets between an Investor
and its Associate or Joint
Venture (Amendments to IFRS Effective date Effective date deferred
10 and IAS 28) deferred indefinitely indefinitely
--------------------------------- ----------------------- -----------------------
New standards that came into effect on 1 January 2021 will be
applied in the year ending 31 December 2021 first reporting to
include these will be for the period ending 30 June 2021. The
Directors do not believe that any of these standards will have a
significant impact on Group and Company reporting.
Basis of preparation
The Group and Company financial statements are prepared on the
historical cost basis, except for financial assets (net profit
interests, quoted shares and unquoted shares), which are carried at
fair value, and equity settled share option awards and warrants
which are measured at grant date fair value.
Going concern
The Directors have prepared a detailed cash flow forecast for
the Group and Company for the period from 1 June 2021 to 31
December 2022.
The principal assumptions underlying the cash flow forecast and
the availability of finance to the Group are as follows:
-- Following completion of a transaction in 2016, the Company
paid US$174.5 million to acquire Loan Notes in Midwestern Leon
Petroleum Limited ("MLPL"), which are repayable by MLPL to San Leon
and a 40% shareholding in MLPL. The economic effect of this
structure is that San Leon has an initial indirect economic
interest of 10.584% in OML 18. Shareholders will note this is
0.864% higher than the percentage interest anticipated by San Leon
at the time of the acquisition in 2016. There have been no further
purchases or payments by San Leon but this revised percentage is
based on a reassessment and recalculation of the various parties'
interests in OML 18 which has resulted in Martwestern Energy
Limited's ("Martwestern") economic interest in Eroton now standing
at 98%. The Group will receive cash flows from the Loan Notes in
the form of interest and capital repayments. This continued to be
the case during 2020 and the basis of the forecast for 2021 and
2022. On 6 April 2020, the Company entered into an agreement
amending the Loan Notes Instrument. The Amendment extends the term
of the Loan Notes to December 2021 and changes the expected loan
note repayment schedule. Up to 31 December 2020, Loan Note payments
totalling US$195.6 million of both principal and interest have been
made on behalf of MLPL. Since the reporting date, a further US$0.8
million has been received. Of the US$10.0 million due on 6 October
2020, a balance of US$4.2 million is still outstanding. Quarterly
repayments are due to start from July 2021.
-- Income from the provision of subsurface technical and
management services of US$5.3 million in 2022.
-- Ongoing exploration and administrative expenditure from the
Group's existing activities are in line with current expectations
and commitments.
-- Repayments from ELI of loan notes of US$10.6 million during
2021 and 2022.
-- OZA deal finalised in June 2021, with repayments of loan
notes in 2022 of US$2.2 million.
Given the Group's well understood cost base, the principal
uncertainty relates to the quantum and timing of receipt of
interest and capital repayments on the Loan Notes with MLPL. It was
originally envisaged that the MLPL Loan Note payments due to the
Group would be sourced by MLPL from the receipt of dividends
through its indirect interest in Eroton via Martwestern. These
dividends have not been received and consequently MLPL has entered
into loan arrangements in order to be able to make Loan Note
payments to the Company. In the absence of the dividend payments,
MLPL will be reliant on further advances under the loan arrangement
and in turn being able to make Loan Note payments to the Company.
The Company has no obligation arising from the loan arrangements
entered into by MLPL.
The Directors have considered the impact of the Covid-19
pandemic, the volatility in oil prices and demand, OPEC quotas, and
recent operational challenges being experienced by OML 18 upon the
Company's indirect interest in OML 18, and upon the Loan Notes. The
Directors are still confident in the operational potential and
ultimately recovering the full amount of the outstanding Loan
Notes, however due to the above issues management recognise the
uncertainty in timing of future cashflows and for this reason the
MLPL Loan Notes have been credit impaired.
The Directors have concluded, that whilst any MLPL Loan Note
payments, if delayed or not received, represents an uncertainty,
the receipt of any further MLPL Loan Note payment(s) is not
required given other expected cash inflows considered in the
assumptions, such as ELI Loan Note repayments, and mitigants such
as the implementation of certain cost saving measures, to continue
for a period of at least 12 months from the date of approval of the
financial statements.
Based on its consideration of Group cash flow projections and
underlying assumptions outlined above, the Directors have a
reasonable expectation that the Group and Company will have
adequate resources to continue in operational existence and to
discharge its debts as they fall due for the foreseeable future and
for a period of at least 12 months from the date of approval of the
financial statements.
Accordingly, the Directors continue to adopt the going concern
basis of preparation of the financial statements for the year ended
31 December 2020.
Functional and presentation currency
Items included in the financial statements of each of the
Group's entities are measured using the currency of the primary
economic environment in which the entity operates (the "functional
currency"). These consolidated financial statements are presented
in US Dollars (US$), which is the Company's functional currency and
the Group's presentational currency, rounded to the nearest
thousand.
Use of estimates and judgements
The preparation of financial statements, in conformity with EU
IFRS, requires management to make judgements, estimates and
assumptions that affect the application of policies and reported
amounts of assets and liabilities, income and expenses. Actual
results may differ from these estimates. The estimates and
associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the
judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Estimates and underlying
assumptions are reviewed on an on-going basis. Revisions to
accounting estimates are recognised in the period in which the
estimate is revised and in any future periods affected. In
particular, significant areas of estimation uncertainty and
critical judgements used in applying accounting policies that have
the most significant effect on the amounts recognised in the
financial statements include:
Judgements
-- Going concern (Note 1)
-- Classification of finance income (Note 4)
-- Impairment of investment in subsidiary (Note 7)
-- Recoverability of equity accounted investments (Note 6)
-- Recoverability of financial assets (Note 8)
Estimates
-- Measurement of equity accounted investments (Note 6)
-- Measurement of financial assets (Note 8)
-- Recognition and measurement of derivatives
-- Measurement of share-based payments
-- Recognition of deferred tax asset for tax losses
Basis of consolidation
The financial information incorporates the financial information
of the Company and entities controlled by the Group (its
subsidiaries). Control is defined as when the Group is exposed to
or has the rights to variable returns from its investment with the
entity and has the ability to affect these returns through its
power over the entity. The financial statements of subsidiaries are
included in the consolidated financial statements from the date
control commences until the date that control ceases. Where
necessary, adjustments are made to the financial information of
subsidiaries to bring their accounting policies into line with
those used by other members of the Group. Intra-group balances and
any unrealised gains and losses or income or expenses arising from
intragroup transactions are eliminated in preparing the Group
financial statements.
Business combinations and goodwill
Business combinations are accounted for using the acquisition
method as at the acquisition date, which is the date on which
control is transferred to the Group. Control is defined as when the
Group and Company have the rights to variable returns from its
investment with the entity and have the ability to affect these
returns through its power over the entity. In assessing control,
the Group takes into consideration potential voting rights that
currently are substantive.
Acquisitions
The Group and Company measures goodwill at the acquisition date
as:
-- the fair value of the consideration transferred; plus
-- the recognised amount of any non-controlling interests in the
acquiree; plus, if the business combination is achieved in stages,
the fair value of the existing equity interest in the acquiree;
less
-- the net recognised amount (generally fair value) of the
identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is
recognised immediately in profit or loss.
Costs related to the acquisition, other than those associated
with the issue of debt or equity securities, that the Group incurs
in connection with a business combination are expensed as
incurred.
Any contingent consideration payable is recognised at fair value
at the acquisition date. If the contingent consideration is
classified as equity, it is not re-measured and settlement is
accounted for within equity. Otherwise, subsequent changes to the
fair value of the contingent consideration are recognised in profit
or loss.
Intangible assets - exploration and evaluation assets
Expenditure incurred prior to obtaining the legal rights to
explore an area is recognised in profit or loss as incurred. All
other expenditure relating to licence acquisition, exploration,
evaluation and appraisal of oil and gas interests, including an
appropriate share of directly attributable overheads, is
capitalised on a licence by licence basis.
Exploration and evaluation assets are carried at cost until the
exploration phase is complete or commercial reserves have been
discovered. The Group and Company regularly review the carrying
amount of exploration and evaluation assets for indicators of
impairment and capitalised costs are written off where the carrying
amount of assets may not be recoverable. Where commercial reserves
have been established and development is approved by the Board, the
relevant expenditure is transferred to oil and gas properties
following assessment of impairment.
Impairment of non-financial assets
The carrying amounts of the Group's assets are reviewed at each
reporting date and, if there is any indication that an asset may be
impaired, its recoverable amount is estimated. The recoverable
amount is the higher of its fair value less costs to sell and its
value in use.
Estimates of impairment are limited to an assessment by the
Directors of any events or changes in circumstance that would
indicate that the carrying amount of the asset may not be
recoverable.
Any impairment loss arising from the review is recognised in
profit or loss to the extent the carrying amount of the asset
exceeds its recoverable amount. An impairment loss is reversed only
to the extent that the asset's carrying amount does not exceed the
carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been
recognised.
Property, plant and equipment
Property, plant and equipment are stated at cost less
accumulated depreciation. Depreciation is provided at rates
calculated to write off the cost less residual value of each asset
over its expected useful life. The residual value is the estimated
amount that would currently be obtained from disposal of the asset
if the asset were already of the age and in the condition expected
at the end of its useful life. The annual rate of depreciation for
each class of depreciable asset is:
Office equipment 25% Straight line
Motor vehicles 20% Reducing balance
Plant and equipment 20% - 33% Straight line
Leased assets Shorter of the term of lease or useful life of the
asset as defined under IFRS 16
Inventories
Inventories are valued at the lower of cost and net realisable
value.
Joint ventures
The Group has also entered into a joint venture arrangement
which is operated through a joint venture. The Group accounts for
its interest in this entity on an equity basis, with Group share of
profit or loss after tax recognised in the Income Statement and its
share of Other Comprehensive Income ("OCI") of the joint venture
recognised in OCI.
Financial fixed assets - investment in subsidiaries
Financial fixed assets in the Company Statement of Financial
Position consist of investments in subsidiary undertakings and are
stated at cost less provision for impairment where applicable.
Financial assets and financial liabilities
i. Recognition and initial measurement
Financial assets are classified at initial recognition and
subsequently measured at amortised cost, Fair Value through Other
Comprehensive Income ("FVOCI") or Fair Value Through Profit or Loss
("FVTPL"). The classification of financial assets is determined by
the contractual cash flows and where applicable the business model
for managing the financial assets.
A financial asset or financial liability is initially measured
at fair value plus, for an item not at FVTPL, transaction costs
that are directly attributable to its acquisition or issue.
ii. Classification and subsequent measurement
Financial assets
On initial recognition, a financial asset is classified as
measured at: amortised cost; FVOCI - debt investment; FVOCI -
equity investment; or FVTPL. Financial assets are not reclassified
subsequent to their initial recognition unless the Group changes
its business model for managing financial assets.
A financial asset is measured at amortised cost if the objective
of the business model is to hold the financial asset in order to
collect contractual cash flows and the contractual terms give rise
to cash flows that are solely payments of principal and interest.
Subsequently the financial asset is measured using the effective
interest method less any impairment. The amortised cost is reduced
by impairment losses in accordance with Group policy set out below.
Interest income, foreign exchange gains and losses and impairment
are recognised in profit or loss. Any gain or loss on derecognition
is recognised in profit or loss.
The business model in which a financial asset is held is
assessed at an individual asset level for assets that are
individually material, and otherwise at a portfolio level.
Financial assets that are held as part of a long-term strategic
investment are considered within a business model to collect
contractual cash flows.
In assessing whether the contractual cash flows are solely
payments of principal and interest, the Group considers the
contractual terms of the instrument. This includes assessing
whether the financial asset contains a contractual term that could
change the timing or amount of contractual cash flows such that it
would not meet this condition.
On initial recognition of an equity investment that is not held
for trading, the Group may irrevocably elect to present subsequent
changes in the investment's fair value in OCI (FVOCI - equity
investment). This election is made on an investment -- by --
investment basis. These assets are subsequently measured at fair
value. Dividends are recognised as income in profit or loss unless
the dividend clearly represents a recovery of part of the cost of
the investment. Other net gains and losses are recognised in OCI
and are never reclassified to profit or loss.
All financial assets not classified as measured at amortised
cost or FVOCI as described above are measured at FVTPL. This
includes all derivative financial assets. These assets are
subsequently measured at fair value. Net gains and losses,
including any interest or dividend income, are recognised in profit
or loss.
On initial recognition, the Group may irrevocably designate a
financial asset that otherwise meets the requirements to be
measured at amortised cost or at FVOCI as at FVTPL if doing so
eliminates or significantly reduces an accounting mismatch that
would otherwise arise.
Financial liabilities
Financial liabilities are classified as measured at amortised
cost or FVTPL. A financial liability is classified as at FVTPL if
it is classified as held -- for -- trading, it is a derivative or
it is designated as such on initial recognition. Financial
liabilities at FVTPL are measured at fair value and net gains and
losses, including any interest expense, are recognised in profit or
loss. Other financial liabilities are subsequently measured at
amortised cost using the effective interest method. Interest
expense and foreign exchange gains and losses are recognised in
profit or loss. Any gain or loss on derecognition is also
recognised in profit or loss.
iii. Impairment (including receivables)
The Group recognises loss allowances for expected credit losses
("ECL's") on financial assets measured at amortised cost.
A provision for 12-month ECL is recognised in respect of low
risk assets. A provision for the lifetime ECL is recognised in
respect of higher risk assets that are not credit impaired. If an
asset is credit impaired, the carrying amount of the asset is
reduced by its lifetime ECL.
The 12-month ECL represents the weighted average of credit
losses that result from default events on a financial instrument
that are possible within the 12 months after the reporting date.
This requires a number of outcomes to be considered, a probability
assigned to each, and a resulting credit loss applied to each. ECLs
are discounted at the effective interest rate of the financial
asset.
12-month ECL is determined based on forward looking analysis
where a range of outcomes have been considered taking into account
the size and timing of the contractual cashflows, the risk of late
payment and the risk of default leading to less than full recovery
of the amounts due. Lifetime ECL is calculated the same way, but
over the relevant period.
At each reporting date, the Group assesses whether financial
assets carried at amortised cost are credit -- impaired. A
financial asset is 'credit -- impaired' when one or more events
that have a detrimental impact on the estimated future cash flows
of the financial asset have occurred. The Group considers a
financial asset to be in default and presumed credit impaired when
contractual payments are outstanding 90 days after their due date,
unless there is reasonable information that amounts will be
recovered; or when the borrower is unlikely to pay its credit
obligations to the Group in full, without recourse by the Group to
actions such as realising security including guarantees (if any is
held).
The Company has determined that MLPL is likely to meet its
credit obligations as evidenced by the preparation of a Competent
Persons Report in relation to San Leon's interest in OML 18,
however are uncertain of the timing of when these obligations will
be met. The Company has therefore credit impaired the asset.
The Company has determined that ELI is likely to meet its credit
obligations as evidenced by recent management information in
relation to San Leon's interest in ELI.
Write-off
The gross carrying amount of a financial asset is written off
when the Group has no reasonable expectations of recovering a
financial asset in its entirety or a portion thereof. The Group
expects no significant recovery from the amount written off.
However, financial assets that are written off could still be
subject to enforcement activities in order to comply with the
Group's procedures for recovery of amounts due.
iv. Derecognition
The Group derecognises a financial asset when the contractual
rights to the cash flows from the financial asset expire.
The Group derecognises a financial liability when its
contractual obligations are discharged or cancelled or expire.
On derecognition of a financial asset or financial liability,
the difference between the carrying amount removed or extinguished
and the consideration received or paid is recognised in profit or
loss.
Decommissioning provision
A provision is made for decommissioning of oil and gas wells.
The cost of decommissioning is determined through discounting the
amounts expected to be payable to their present value at the date
the provision is recognised and reassessed at each reporting date.
This amount is regarded as part of the total investment to gain
access to economic benefits and consequently capitalised as part of
the cost of the asset and the liability is recognised in
provisions. Such cost is depleted over the life of the asset on the
basis of proven and probable reserves and charged to the Income
Statement. The unwinding of the discount is reflected as a finance
cost in the Income Statement over the life of the field or
well.
Taxation
Income tax expense comprises current and deferred tax. Income
tax expense is recognised in the Consolidated Income Statement
except to the extent that it relates to items recognised directly
in Other Comprehensive Income or equity, in which case it is
recognised in Other Comprehensive Income or equity.
i. Current tax
Current tax comprises the expected tax payable or receivable on
the taxable income or loss for the year and any adjustment to the
tax payable or receivable in respect of previous years. The amount
of current tax payable or receivable is the best estimate of the
tax amount expected to be paid or received that reflects
uncertainty relates to income taxes, if any. It is measured using
tax rates enacted or substantively enacted at the reporting date.
Current tax also includes any tax arising from dividends.
Current tax assets and liabilities are offset only if certain
criteria are met.
ii. Deferred tax
Deferred tax is recognised using the liability method, providing
for temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts
used for taxation purposes. Deferred tax is not recognised for the
following temporary differences: the initial recognition of
goodwill, the initial recognition of assets or liabilities in a
transaction that is not a business combination and that affects
neither accounting nor taxable profit, and differences relating to
investments in subsidiaries to the extent that they are controlled
and probably will not reverse in the foreseeable future. Deferred
tax is measured at the tax rates that are expected to be applied to
the temporary differences when they reverse, based on the laws that
have been enacted or substantively enacted by the reporting
date.
A deferred tax asset is recognised to the extent that it is
probable that future taxable profits will be available against
which the temporary differences can be utilised. Deferred tax
assets are reviewed at each reporting date and are reduced to the
extent that it is no longer probable that the related tax benefit
will be realised.
Unrecognised deferred tax assets are reassessed as each
reporting date and recognised to the extent that it has become
probable that future taxable profits will be available against
which they can be used.
Deferred tax assets and liabilities are offset only if certain
criteria are met.
Foreign currencies
Transactions in foreign currencies are initially translated to
the respective functional currencies of Group entities at the
exchange rates at the dates of the transactions. Monetary assets
and liabilities denominated in foreign currencies are retranslated
to the functional currency at the exchange rates ruling at the
reporting date with gains or losses recognised in profit or loss.
Non-monetary items are translated using the exchange rates ruling
as at the date of the initial transaction.
Foreign currency differences are generally recognised in profit
or loss and presented within finance costs. However, foreign
currency differences arising from the translation of the following
items are recognised in OCI:
-- an investment in equity securities designated as at FVOCI
(except on impairment, in which case foreign currency differences
that have been recognised in OCI are reclassified to profit or
loss);
-- a financial liability designated as a hedge of the net
investment in a foreign operation to the extent that the hedge is
effective; and
-- qualifying cash flow hedges to the extent that the hedges are
effective.
Foreign operations
The assets and liabilities of foreign operations are translated
into US Dollars at the exchange rate at the reporting date and the
income and expenses of foreign operations are translated at the
actual exchange rates at the date of the transaction or at average
exchange rates for the year where this approximates to the actual
rate. Exchange differences arising on translation are recognised in
Other Comprehensive Income and presented in the foreign currency
translation reserve in equity. Details of exchange rates used are
set out in Note 32 of the Annual Report and Accounts.
Revenue recognition
For the year ended 31 December 2020 the Group used the five-step
model as prescribed under IFRS 15 on the Group's revenue
transactions. This included the identification of the contract,
identification of the performance obligations under same,
determination of the transaction price, allocation of the
transaction price to performance obligations and recognition of
revenue. The point of recognition arises when the Group satisfies a
performance obligation by transferring control of a promised
seismic processing service to the customer, which could occur over
time.
Finance income and expenses
Interest income is accrued on a time basis by reference to the
principal on deposit and the effective interest rate
applicable.
The 'effective interest rate' is the rate that at initial
recognition exactly discounts estimated future cash payments or
receipts through the expected life of the financial instrument
to:
-- the gross carrying amount of the financial asset; or
-- the amortised cost of the financial liability.
In calculating interest income and expense, the effective
interest rate is applied to the gross carrying amount of the asset
(when the asset is not credit -- impaired) or to the amortised cost
of the liability. However, for financial assets that have become
credit -- impaired subsequent to initial recognition, interest
income is calculated by applying the effective interest rate to the
amortised cost of the financial asset net of impairment provision.
If the asset is no longer credit -- impaired, then the calculation
of interest income reverts to the gross basis.
Finance expenses comprise interest or finance costs on
borrowings and unwinding of any discount on provisions using the
effective interest rate.
Share capital
Incremental costs directly attributable to the issue of ordinary
shares are recognised as a deduction from equity.
Share based payments
The Group has applied the requirements of IFRS 2 'share based
payments'. The Group issues share options as an incentive to
certain key management and staff (including Directors), which are
classified as equity settled share based payment awards. The grant
date fair value of share options granted to Directors and employees
under the Company's share option scheme is recognised as an expense
over the vesting period with a corresponding credit to the
share-based payments reserve. The fair value is measured at grant
date and spread over the period during which the awards vest.
The options issued by the Group are subject to both market-based
and non-market based vesting conditions. Market conditions are
included in the calculation of fair value at the date of the grant.
Non-market vesting conditions are not taken into account when
estimating the fair value of awards as at grant date; such
conditions are taken into account through adjusting the number of
the equity instruments that are expected to vest.
The proceeds received will be credited to share capital (nominal
value) and share premium when options are converted into ordinary
shares.
Where the terms of an equity-settled transaction are modified,
an additional expense is recognised for any modification that
increases the total fair value of the share-based payment
transaction, or is otherwise beneficial to the employee as measured
at the date of modification.
Where an equity-settled award is cancelled, it is treated as if
it had vested on the date of cancellation, and any expense not yet
recognised for the award is recognised immediately. However, if a
new award is substituted for the cancelled award, and designated as
a replacement award on the date that it is granted, the cancelled
and new awards are treated as if they were a modification of the
original award, as described in the previous paragraph.
Dividends
The Group has elected to classify cashflows from dividends paid
as financing activities.
Earnings per share
The Group and the Company present basic and diluted earnings per
share ("EPS") data for its ordinary shares. Basic EPS is calculated
by dividing the profit or loss attributable to equity shareholders
of the Company by the weighted average number of ordinary shares
outstanding during the period. Diluted EPS is determined by
adjusting the profit or loss attributable to ordinary shareholders
and the weighted average number of ordinary shares outstanding for
the effects of all dilutive potential ordinary shares, which
comprise convertible notes, share options granted to employees and
warrants.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand on
demand.
Leases:
As a lessee
The Group recognises right-of-use assets representing its right
to use the underlying assets and lease liabilities representing its
obligation to make lease payments at the lease commencement date.
The right-of-use assets are initially measured at cost, which
comprises the initial amount of the lease liability adjusted for
any lease payments made at or before the commencement date, plus
any initial direct costs incurred and an estimate of costs to
dismantle and remove the underlying asset or to restore the
underlying asset or to restore the site on which it is located,
less any lease incentives received.
The right-of-use asset is subsequently depreciated using the
straight-line method from the commencement date to the end of the
lease term, unless the lease transfers ownership of the underlying
asset to the Group by the end of the lease term or the cost of the
right-of-use asset reflects that the Group will exercise a purchase
option. In that case the right-of-use asset will be depreciated
over the useful life of the underlying asset, which is determined
on the same basis as those of property and equipment. In addition,
the right-of-use asset is periodically reduced by impairment
losses, if any, and adjusted for certain remeasurements of the
lease liability.
The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, the Group's incremental
borrowing rate. Generally, the Group uses its incremental borrowing
rate as the discount rate.
The Group determines its incremental borrowing rate by obtaining
interest rates from various external financing sources and makes
certain adjustments to reflect the terms of the lease and type of
the asset leased.
Lease payments included in the measurement of the lease
liability comprise the following:
- fixed payments, including in-substance fixed payments;
- variable lease payments that depend on an index or rate,
initially measured using the index or rate as at the commencement
date;
- amounts expected to be payable under a residual value guarantee; and
- the exercise price under a purchase option that the Group is
reasonably certain to exercise, lease payments in an optional
renewal period if the Group is reasonably certain to exercise an
extension option, and penalties for early termination of a lease
unless the Group is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the
effective interest method. It is remeasured when there is a change
in the Group's estimate of the amount expected to be payable under
a residual value guarantee, if the Group changes its assessment of
whether it will exercise a purchase, extension or termination
option or if there is a revised in-substance fixed lease
payment.
When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying amount of the
right-of-use asset, or is recorded in profit or loss if the
carrying amount of the right-of-use asset has been reduced to
zero.
The Group presents right-of-use assets that do not meet the
definition of investment property in 'property, plant and
equipment' and lease liabilities in 'loans and borrowings' in the
Statement of Financial Position.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and
lease liabilities for leases of low-value assets and short-term
leases, including IT equipment. The Group recognises the lease
payments associated with these leases as an expense on a
straight-line basis over the lease term.
Segmental reporting
A segment is a distinguishable component of the Group that is
engaged in business activities from which it may earn revenues and
incur expenses which is subject to risks and rewards that are
different from those of other segments and for which discrete
financial information is available.
All operating segments and results are regularly reviewed by the
Board of Directors to make decisions about resources to be
allocated to each segment and to assess its performance.
Full details of the Group's operating segments all of which are
involved in oil and gas exploration and production are set out in
Note 2 to the Annual Report and Accounts.
Defined contribution pension scheme
The Company operates a defined contribution scheme. All
contributions made are recognised in the Income Statement in the
period in which they fall due.
Fair value movement
The Group has an established process with respect to the
measurement of fair values. The finance team regularly reviews
significant unobservable inputs and valuation adjustments. If third
party information, such as broker quotes or pricing services, is
used to measure fair values, then the valuation team assesses the
evidence obtained from the third parties to support the conclusion
that such valuations meet the requirements of IFRS, including the
level in the fair value hierarchy in which such valuations should
be classified.
Significant valuation issues are reported to the Board.
Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1
that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
For further detail on assumptions made in measuring Level 3 fair
values see the following notes:
-- Note 17 Financial Assets in the Annual Report and
Accounts
-- Note 22 Derivative in the Annual Report and Accounts
Assets and liabilities measured at fair value
In accordance with IFRS 13, the Group discloses its assets and
liabilities held at fair value after initial recognition in the
following categories: FVOCI - equity instrument and FVTPL.
With the exception of shares held in quoted entities, which are
classified as Level 1 items under the fair value hierarchy, all
assets and liabilities held at fair value are measured on the basis
of inputs classified as Level 3 under the fair value hierarchy on
the basis that the inputs underpinning the valuations are not based
on observable market data as defined in IFRS 13.
Where derivatives are traded either on exchanges or liquid
over-the-counter markets, the Group uses the closing price at the
reporting date. Normally, the derivatives entered into by the Group
are not traded in active markets. The fair values of these
contracts are estimated using a valuation technique that maximises
the use of observable market inputs, e.g. market exchange and
interest rates. All derivatives entered into by the Group are
included in Level 3 and consist of share warrants issued.
2. Revenue and Segmental Information
Operating segment information is presented on the basis of the
geographical areas as detailed below, which represent the financial
basis by which the Group manages its operations. The Board of
Directors, which has been recognised as the Chief Operating
Decision Maker ("CODM"), regularly receive verbal or written
reports at board meetings for each of the segments based on the
below criteria which management consider to be appropriate in
evaluating segment performance relative to other entities that
operate in the industry.
Revenue and Segmental Information
Poland Morocco Albania Nigeria Ireland Spain Unallocated# Total
2020 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
--------------------- --------- -------- -------- -------- -------- -------- ------------ ---------
Total revenue - - - - - - - -
--------------------- --------- -------- -------- -------- -------- -------- ------------ ---------
Impairment of
exploration
and evaluation
assets - - (196) - - - - (196)
--------------------- --------- -------- -------- -------- -------- -------- ------------ ---------
Segment (loss)
/ profit before
income tax (2,093) - (196) 3,259 4,073 (59) (14,589) (9,605)
--------------------- --------- -------- -------- -------- -------- -------- ------------ ---------
Property, plant
and equipment 11 - - 575 2,708 - - 3,294
--------------------- --------- -------- -------- -------- -------- -------- ------------ ---------
Equity accounted
investments - - - 44,102 - - - 44,102
--------------------- --------- -------- -------- -------- -------- -------- ------------ ---------
Segment non-current
assets - - - 55,729 9,513 - - 65,242
--------------------- --------- -------- -------- -------- -------- -------- ------------ ---------
Segment liabilities (83) (18) (804) (4) (3,279) (748) (1,706) (6,642)
--------------------- --------- -------- -------- -------- -------- -------- ------------ ---------
# Unallocated expenditure and liabilities include amounts
of a corporate nature and not specifically attributable
to a reportable segment.
Revenue relates to the provision of seismic acquisition services
in Poland.
Total
Poland Morocco Albania Nigeria Ireland Spain Unallocated# US$'000
(Restated
2019 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 *)
--------------------------- -------- -------- -------- -------- -------- -------- ------------ ----------
Total revenue 266 - - - - - - 266
--------------------------- -------- -------- -------- -------- -------- -------- ------------ ----------
Impairment of exploration
and evaluation
assets (126) (150) (190) - - (941) - (1,407)
--------------------------- -------- -------- -------- -------- -------- -------- ------------ ----------
Segment (loss)
/ profit before
income tax (Restated
*) (15,074) 1,134 (190) 17,565 (48,373) (1,014) (12,749) (58,701)
--------------------------- -------- -------- -------- -------- -------- -------- ------------ ----------
Property, plant
and equipment 32 - - 1,476 2,836 - - 4,344
--------------------------- -------- -------- -------- -------- -------- -------- ------------ ----------
Equity accounted
investments (Restated
*) - - - 44,798 - - - 44,798
--------------------------- -------- -------- -------- -------- -------- -------- ------------ ----------
Segment non-current
assets (Restated
*) 32 - - 46,043 7,554 - 194 53,823
--------------------------- -------- -------- -------- -------- -------- -------- ------------ ----------
Segment liabilities (194) (268) (804) - (2,835) (739) (3,251) (8,091)
--------------------------- -------- -------- -------- -------- -------- -------- ------------ ----------
# Unallocated expenditure and liabilities include amounts
of a corporate nature and not specifically attributable
to a reportable segment.
Revenue relates to the provision of seismic acquisition services
in Poland.
* See Note 6 for details on restated amounts
3. LOSS on disposal of subsidiaries
2020 2019
US$'000 US$'000
------------------------------------------------- -------- --------
Other, recycling from equity to income statement
(i) (1,044) (13,870)
------------------------------------------------- -------- --------
Horizon Petroleum Ltd (ii) - 100
------------------------------------------------- -------- --------
(1,044) (13,770)
------------------------------------------------- -------- --------
(i) Other
In 2020 the Company liquidated certain foreign operations that
held non-core assets. The Group's investment in the assets held by
the subsidiaries has been fully impaired in prior periods. The
liquidation of the foreign operations has resulted in the
realisation of cumulative foreign currency losses of US$1.0 million
(2019: US$13.9 million), that had previously been recognised in
equity. The realisation of the cumulative foreign currency losses
does not impact the consolidated assets or liabilities.
(ii) Horizon Petroleum Ltd
In August 2019, sale and purchase agreements were completed for
the sale of a 100% interest in two oil & gas concessions in
Poland, known as Bielsko-Biala and Cieszyn (together the "Primary
Concessions"), and a 100% interest in two additional oil & gas
concessions in Poland, known as Prusice and Kotlarka, (together the
"Secondary Concessions") with Horizon Petroleum Ltd. ('Horizon')
(TSXV: HPL).
San Leon will receive a 6% net profit interest on the Primary
and Secondary Concessions when the concessions are transformed and
granted to Horizon. Under revised completion terms, a cash payment
of US$1,080,000 is also due to be paid to San Leon if the
Bielsko-Biala concession is transformed and granted to Horizon. At
the same time, San Leon is also to receive US$769,558 (CAD$1.0
million) in shares of Horizon. A cash payment of approximately
US$75,000 is due to be paid to San Leon for each of the Secondary
Concessions if granted to Horizon.
The aggregate consideration of US$2.0 million has been noted as
a contingent asset in Commitments and Contingencies (Note 28 in the
Annual Report and Accounts).
On completion of the sale, a US$100,000 advance received by the
Company in 2017 as part of the Memorandum of Understanding became
non-refundable.
At 31 December 2020 and at the date of signing these accounts,
the concessions have yet to be transformed and granted to
Horizon.
4. Finance income
2020 2019
US$'000 US$'000
-------------------------------------------- -------- --------
Total finance income on Loan Notes (Note 8) 17,276 23,313
-------------------------------------------- -------- --------
Movement in fair value of derivatives 119 531
-------------------------------------------- -------- --------
Deposit interest received 47 278
-------------------------------------------- -------- --------
Interest on Director's loan - 1
-------------------------------------------- -------- --------
17,442 24,123
-------------------------------------------- -------- --------
All interest income is in respect of assets measured at
amortised cost.
5. LOSS per share
Basic loss per share
Basic loss per share is calculated by dividing the loss
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the year as
follows:
2019
2020 US$'000
US$'000 (Restated
*)
------------------ --------- ----------
Loss for the year (11,853) (44,622)
------------------ --------- ----------
The weighted average number of shares in issue is calculated as
follows:
2020 2019
Number Number
of shares of shares
------------------------------------------- ----------- ------------
In issue at start of year (Note 10) 451,303,014 500,256,857
------------------------------------------- ----------- ------------
Shares to be issued at start of year - 5,590,270
------------------------------------------- ----------- ------------
Effect of tender offer and buybacks in the
year (1,332,865) (39,697,582)
------------------------------------------- ----------- ------------
Effect of shares issued and shares to be
issued in the year - 195,890
------------------------------------------- ----------- ------------
Weighted average number of ordinary shares
in issue (basic) 449,970,149 466,345,435
------------------------------------------- ----------- ------------
Basic loss per ordinary share (cent) (2.63) (9.57)
------------------------------------------- ----------- ------------
* See Note 6 for details on restated amounts
Diluted loss per share
Diluted loss per share is calculated by dividing the loss
attributable to equity holders of the Company by the weighted
average number of ordinary shares outstanding after adjustment for
effects of all dilutive potential ordinary shares as follows:
2019
2020 US$'000
US$'000 (Restated
*)
------------------ --------- ----------
Loss for the year (11,853) (44,622)
------------------ --------- ----------
The diluted weighted average number of shares in issue is
calculated as follows:
2020 2019
Number Number
of shares of shares
---------------------------------------- ----------- -----------
Basic weighted average number of shares
in issue during the year 449,970,149 466,345,435
---------------------------------------- ----------- -----------
Effect of share options and warrants in - -
issue
---------------------------------------- ----------- -----------
449,970,149 466,345,435
---------------------------------------- ----------- -----------
Diluted loss per ordinary share (cent) (2.63) (9.57)
---------------------------------------- ----------- -----------
* See Note 6 for details on restated amounts
The number of options which are anti-dilutive and have therefore
not been included in the above calculations is 41,221,626 (2019:
39,559,074).
6. Equity accounted investments
Group 2019 2018
2020 US$'000 US$'000
US$'000 (Restated (Restated
*) *)
---------------------------------------------- --------- ---------- ----------
Cost and net book value
---------------------------------------------- --------- ---------- ----------
At 1 January 44,798 54,012 69,763
---------------------------------------------- --------- ---------- ----------
Additions (ELI) 443 - -
---------------------------------------------- --------- ---------- ----------
Share of loss of equity accounted investments (1,139) (9,214) (15,751)
---------------------------------------------- --------- ---------- ----------
At 31 December 44,102 44,798 54,012
---------------------------------------------- --------- ---------- ----------
The Group's only joint venture entities and associates at 31
December 2020 were as follows:
Name Registered office Type % held
--------------------------- ----------------------------------- ---------- ------
5th Floor Barkly Wharf, Le
Midwestern Leon Petroleum Caudan Waterfront, Joint
Limited Port Louis, Republic of Mauritius Venture 40%
--------------------------- ----------------------------------- ---------- ------
Energy Link Infrastructure 260 Triq San Albert, Griza,
(Malta) Limited GZR 1150, Malta Associate 10%
--------------------------- ----------------------------------- ---------- ------
2020
A summary of the financial information of the equity investments
is detailed below.
Midwestern Energy
Leon Petroleum Link Infrastructure
Limited (Malta)
(i) Limited
(ii) Total
------------------------------------------- --------------- -------------------- ---------
Equity Interest 40% 10%
-------------------------------------------- --------------- -------------------- ---------
US$'000 US$'000 US$'000
------------------------------------------- --------------- -------------------- ---------
Loss from continuing operations (2,440) (2,804) (5,244)
-------------------------------------------- --------------- -------------------- ---------
Total comprehensive loss (2,440) (2,804) (5,244)
-------------------------------------------- --------------- -------------------- ---------
Non-current assets 198,948 147,922 346,870
-------------------------------------------- --------------- -------------------- ---------
Current assets (excluding cash) 286,687 167 286,854
-------------------------------------------- --------------- -------------------- ---------
Cash - 46,334 46,334
-------------------------------------------- --------------- -------------------- ---------
Non-current liabilities - (141,458) (141,458)
-------------------------------------------- --------------- -------------------- ---------
Current liabilities (376,082) (47,214) (423,296)
-------------------------------------------- --------------- -------------------- ---------
Net assets 109,553 5,751 115,304
-------------------------------------------- --------------- -------------------- ---------
Group's interest in net assets of investee
at 1 January 2020 44,798 - 44,798
-------------------------------------------- --------------- -------------------- ---------
Additions - 443 443
-------------------------------------------- --------------- -------------------- ---------
Share of loss (976) (163) (1,139)
-------------------------------------------- --------------- -------------------- ---------
Group's interest in net assets of investee
at 31 December 2020 43,822 280 44,102
-------------------------------------------- --------------- -------------------- ---------
2019
A summary of the financial information of the equity investments
is detailed below.
Midwestern
Leon Petroleum
Limited
(i)
------------------------------------------- --- --- --- ---------------
Equity Interest 40%
---------------------------------------------------------- ---------------
US$'000
(Restated
*)
------------------------------------------- --- --- --- ---------------
Loss from continuing operations (23,035)
---------------------------------------------------------- ---------------
Total comprehensive loss (23,035)
---------------------------------------------------------- ---------------
Non-current assets 186,642
---------------------------------------------------------- ---------------
Current assets (excluding cash) 262,444
---------------------------------------------------------- ---------------
Non-current liabilities -
------------------------------------------- --- --- --- ---------------
Current liabilities (337,091)
---------------------------------------------------------- ---------------
Net assets 111,995
---------------------------------------------------------- ---------------
Group's interest in net assets of investee
at 1 January 2019 54,012
---------------------------------------------------------- ---------------
Share of loss (3,204)
---------------------------------------------------------- ---------------
Restatement of share of loss * (6,010)
---------------------------------------------------------- ---------------
Group's interest in net assets of investee
at 31 December 2019 44,798
---------------------------------------------------------- ---------------
2018
A summary of the financial information of the equity investments
is detailed below.
Midwestern
Leon Petroleum
Limited
(i)
------------------------------------------- --- --- --- ---------------
Equity Interest 40%
---------------------------------------------------------- ---------------
US$'000
(Restated
*)
------------------------------------------- --- --- --- ---------------
Loss from continuing operations (35,046)
---------------------------------------------------------- ---------------
Total comprehensive loss (39,378)
---------------------------------------------------------- ---------------
Non-current assets 201,148
---------------------------------------------------------- ---------------
Current assets (excluding cash) 242,749
---------------------------------------------------------- ---------------
Non-current liabilities (48,259)
---------------------------------------------------------- ---------------
Current liabilities (260,608)
---------------------------------------------------------- ---------------
Net assets 135,030
---------------------------------------------------------- ---------------
Group's interest in net assets of investee
at 1 January 2018 69,763
---------------------------------------------------------- ---------------
Share of loss (14,693)
---------------------------------------------------------- ---------------
Restatement of share of loss * (1,058)
---------------------------------------------------------- ---------------
Group's interest in net assets of investee
at 31 December 2018 54,012
---------------------------------------------------------- ---------------
(i) Midwestern Leon Petroleum Limited
During 2016 the Company acquired a 40% non-controlling interest
in MLPL as part of the OML 18 transaction. Full details of the OML
18 transaction are set out in Note 17(i). The movement during 2020
reflects a share of the loss of MLPL being administrative costs of
US$9.7 million (2019: US$2.1 million), other income of US$nil
(2019: US$7.2 million), net finance income / costs of US$3.3
million income (2019: US$5.5 million costs), profit on investment
of US$12.2 million (2019: US$14.6 million loss (restated *)), net
impairment losses on financial assets of US$0.3 million (2019:
US$nil) and a tax charge of US$7.9 million (2019: US$8.0
million).
The above interest is accounted for as an equity accounted
investment as San Leon does not have control over the entity, which
is governed under a Joint Venture Agreement requiring the approval
of both parties to the Joint Venture Agreement in respect of all
operating decisions.
The Group identified potential impairment indicators, being that
MLPL is yet to receive a dividend from Eroton, the equity interest
is currently loss making, US$5.0 million of a US$10.0 million
repayment due on 6 October 2020 was still outstanding at year end,
and MLPL has entered into a loan to be able to make Loan Note
repayments to the Group. To test for a potential impairment the
carrying value of the equity interest in MLPL was compared against
the fair value less cost of sale. This was estimated using a
discounted cashflow model of the expected future cashflows from
MLPL's share of the underlying OML 18 asset. Future cashflows of
OML 18 were estimated using the following price assumptions of
US$54/bbl in 2021, US$57/bbl in 2022, 2023 and 2024 and a
subsequent long term price US$62/bbl escalated at 2% annually, with
the cashflows discounted using a post-tax discount rate of 10%.
Assumptions involved in the impairment assessment include estimates
of commercial reserves, production rates, future oil prices,
discount rates and operating and capital expenditure profiles, all
of which are inherently uncertain. This analysis identified that
the carrying value of the equity interest in MLPL is not
impaired.
If the recoverable amount was estimated taking into account a
reduction in the oil price of 30% over the same period and an
increase in the discount rate to 25%, then the carrying value of
the equity interest in MLPL would still not be impaired.
The Directors recognise that the future realisation of the
equity accounted investment is dependent on future successful
exploration and appraisal activities and subsequent production of
oil and gas reserves.
* Restatements
Restatement adjustments have been made in the 2019 comparative
to reflect the following misstatements in MLPL's 100% owned
subsidiary Martwestern Energy Limited ("Martwestern"), who in turn
owns 50% of Eroton, which is recognised in Martwestern as an equity
accounted investment:
- Correction of the treatment of dividend received on equity
investment which had been recognised as income, resulting in an
increase in the restated loss of US$2.5 million
- Share of restated total comprehensive loss of the investee
(Eroton) due to the recognition of leases, resulting in an increase
in the restated loss of US$3.5 million
- Share of receivable impairment in investee (Eroton) not
previously recognised in Martwestern, resulting in an increase in
the restated loss of US$1.1 million in 2018
The earliest comparatives that required restatement for this
error was in 2018.
The impact on the prior year financial statements is outlined
below:
Income statement:
The impact of the restatement has resulted in the loss for the
financial year increasing by US$6.0 million from a loss of US$38.6
million to a loss of US$44.6 million
Loss for the financial year ended 31 December 2019 as disclosed
in the 2019 Annual Report (38,612)
----------------------------------------------------------------- --------
Restatement of loss on equity accounted investments (6,010)
----------------------------------------------------------------- --------
Restated loss for the financial year ended
31 December 2019 (44,622)
----------------------------------------------------------------------- --------
Basic and diluted loss per ordinary share (cent)
Basic and diluted loss per ordinary share (cent) for the financial
year ended 31 December 2019 as disclosed in the 2019 Annual Report (8.28)
--------------------------------------------------------------------------- ------
Restatement of basic and diluted loss per ordinary share (cent)
attributable to increase in loss on equity accounted investments (1.29)
--------------------------------------------------------------------------- ------
Restated basic and diluted loss per ordinary share (cent) for
the financial year ended 31 December 2019 (9.57)
--------------------------------------------------------------------- ------
Statement of Financial Position:
The impact of the restatement has resulted in lower Equity
accounted investments.
Equity accounted investments as at 31 December 2019 as disclosed
in the 2019 Annual Report 51,866
------------------------------------------------------------------ -------
Restatement of 2018 loss on equity accounted investments (1,058)
------------------------------------------------------------------ -------
Restatement of 2019 loss on equity accounted investments (6,010)
------------------------------------------------------------------ -------
Restated Equity accounted investments for the financial
year ended 31 December 2019 44,798
------------------------------------------------------------------------ -------
Cash flow statement:
The impact of the restatement has resulted in lower Equity
accounted investments.
Share of loss of equity-accounted investments for the ended
31 December 2019 as disclosed in the 2019 Annual Report (3,204)
---------------------------------------------------------------------- -------
Restatement of loss on equity accounted investments (6,010)
---------------------------------------------------------------------- -------
Restated share of loss of equity-accounted investments for the
financial year ended 31 December 2019 (9,214)
---------------------------------------------------------------- -------
(ii) Energy Link Infrastructure (Malta) Limited
In August 2020 the Company acquired a 10% non-controlling
interest in ELI (Malta) Limited (See Note 8(ii)). The movement
during 2020 reflects a share of the loss of ELI being sales income
of US$5.7 million, other income of US$0.1 million, cost of sales of
US$4.9 million and operating expenses including administrative
costs of US$3.7 million.
San Leon does not have control over the entity, however it has
been determined to have significant influence. On this basis, the
above interest is recognised as an equity accounted investment.
Significant influence has been determined based on the Company
having 10% of voting rights, a board position and a Shareholder
Agreement requiring a majority, and in some instances a super
majority (meaning 70% of votes are required to pass a resolution),
to approve all operating decisions.
Under the terms of ELI's senior debt facility, the lender has a
charge over all of the company's assets and, as further security,
each shareholder (including San Leon Energy) has pledged their
shares to the lender. The terms of the pledge are that the shares
cannot be transferred or otherwise utilised without the lender's
consent.
The Directors recognise that the future realisation of the
equity accounted investment is dependent on completion of the
pipeline and subsequent throughput of oil from various
customers.
7. Financial assets - Company
2020 2019
US$'000 US$'000
----------------------------------------------- -------- --------
Investment in subsidiary undertakings at cost:
----------------------------------------------- -------- --------
Balance at beginning and end of year 31,539 31,539
----------------------------------------------- -------- --------
San Leon Energy Nigeria B.V. holds the equity interest in MLPL.
As per Note 6(i), the Group identified potential impairment
indicators with respect to the equity interest. These same
indicators are also impairment indicators for the Company's holding
in San Leon Energy B.V. The same tests as detailed in Note 6(i)
were carried out to assess the carrying value of the Company's
investment in its subsidiary and the analysis identified that the
carrying value of the investment in MLPL is not impaired.
At 31 December 2020, the Company had the following principal
subsidiaries, all of which are wholly owned through holding all of
the issued ordinary shares of the entities:
Name Registered Office Principal Country of
Activities Incorporation
-------------------------- ------------------------ ---------------- ---------------
Directly held:
-------------------------- ------------------------ ---------------- ---------------
San Leon Energy B.V. de Ronge 16, Holding company Netherlands
1852 XB Heiloo
The Netherlands
-------------------------- ------------------------ ---------------- ---------------
San Leon Services Limited 12 Castle Street Service company Jersey
St. Helier
Jersey
JE2 3RT
-------------------------- ------------------------ ---------------- ---------------
San Leon Energy Nigeria de Ronge 16, Holding company Netherlands
B.V.
1852 XB Heiloo
The Netherlands
-------------------------- ------------------------ ---------------- ---------------
San Leon Energy Financing 2 Shelbourne Buildings, Financing Ireland
Limited company
Crampton Avenue
Shelbourne Road,
Ballsbridge,
Dublin 4
-------------------------- ------------------------ ---------------- ---------------
San Leon Holdings Limited 27/28 Eastcastle Holding company England
Street,
London,
England,
W1W 8DH
-------------------------- ------------------------ ---------------- ---------------
Indirectly held:
-------------------------- ------------------------ ---------------- ---------------
San Leon Nigeria Limited No. 801, Service company Nigeria
Eden Heights,
6 Elsie Femi Pearse
Street,
Victoria Island
Lagos,
Nigeria
-------------------------- ------------------------ ---------------- ---------------
San Leon Energy (UK) 27/28 Eastcastle Service company England
Limited Street,
London,
England,
W1W 8DH
-------------------------- ------------------------ ---------------- ---------------
San Leon Energy Eli 27/28 Eastcastle Holding company England
Limited Street,
London,
England,
W1W 8DH
-------------------------- ------------------------ ---------------- ---------------
San Leon Energy Oza 27/28 Eastcastle Holding company England
Limited Street,
London,
England,
W1W 8DH
-------------------------- ------------------------ ---------------- ---------------
A full list of subsidiaries will be annexed to the Annual Report
of the Company to be filed with the Irish Registrar of
Companies.
8. Financial Assets
Barryroe
4.5%
net profit Unquoted
OML 18 interest shares
(i) ELI (ii) (iii) (iv) (viii) Total
Group US$'000 US$'000 US$'000 US$'000 US$'000
------------------------------------------- --------- ------------ ------------- ------------ --------
FVOCI
-
Amortised Amortised equity
cost cost FVTPL instrument
------------------------------------------- --------- ------------ ------------- ------------ --------
Cost / Valuation
------------------------------------------- --------- ------------ ------------- ------------ --------
At 1 January 2019 134,187 - 51,142 2,625 187,954
------------------------------------------- --------- ------------ ------------- ------------ --------
Finance income 23,313 - - - 23,313
------------------------------------------- --------- ------------ ------------- ------------ --------
Loan Notes receipts - principal (23,361) - - - (23,361)
------------------------------------------- --------- ------------ ------------- ------------ --------
Loan Notes receipts - interest (19,885) - - - (19,885)
------------------------------------------- --------- ------------ ------------- ------------ --------
Impairment of unquoted shares,
Other comprehensive income - - - (2,625) (2,625)
------------------------------------------- --------- ------------ ------------- ------------ --------
Additions (viii) - - - 194 194
------------------------------------------- --------- ------------ ------------- ------------ --------
Fair value movement, Income statement - - (48,373) - (48,373)
------------------------------------------- --------- ------------ ------------- ------------ --------
At 31 December 2019 114,254 - 2,769 194 117,217
------------------------------------------- --------- ------------ ------------- ------------ --------
Net fair value of acquisition
of ELI Loan Notes - 14,557 - - 14,557
------------------------------------------- --------- ------------ ------------- ------------ --------
Finance income 16,480 796 - - 17,276
------------------------------------------- --------- ------------ ------------- ------------ --------
Loan Notes receipts - principal (35,285) - - - (35,285)
------------------------------------------- --------- ------------ ------------- ------------ --------
Loan Notes receipts - interest (11,215) - - - (11,215)
------------------------------------------- --------- ------------ ------------- ------------ --------
Lifetime ECL - credit-impaired
# (15,309) - - - (15,309)
------------------------------------------- --------- ------------ ------------- ------------ --------
Impairment of unquoted shares,
Other comprehensive income - - - (194) (194)
------------------------------------------- --------- ------------ ------------- ------------ --------
Fair value movement, Income statement - - 4,073 - 4,073
------------------------------------------- --------- ------------ ------------- ------------ --------
At 31 December 2020 68,925 15,353 6,842 - 91,120
------------------------------------------- --------- ------------ ------------- ------------ --------
Expected Credit Loss Provision
------------------------------------------- --------- ------------ ------------- ------------ --------
At 1 January 2019 and 31 December - - - -
2019
------------------------------------------- --------- ------------ ------------- ------------ --------
New financial asset acquired * (385) - - (385)
------------------------------------------- --------- ------------ ------------- ------------ --------
At 31 December 2020 (385) - - (385)
------------------------------------------- --------- ------------ ------------- ------------ --------
# See OML18 ECL table below
* See ELI ECL table below
------------------------------------------- --------- ------------ ------------- ------------ --------
Higher
risk assets
Expected Credit Loss - OML 18 Performing not credit Credit
12-month impaired impaired Total
ECL Lifetime Lifetime
ECL ECL
------------------------------------------- --------- ------------ ------------- ------------ --------
At 1 January 2019 - (5,467) - (5,467)
------------------------------------------- --------- ------------ ------------- ------------ --------
Net remeasurement of loss allowance - 3,465 - 3,465
------------------------------------------- --------- ------------ ------------- ------------ --------
At 31 December 2019 - (2,002) - (2,002)
------------------------------------------- --------- ------------ ------------- ------------ --------
Impact of modification - (5,857) - (5,857)
------------------------------------------- --------- ------------ ------------- ------------ --------
Net remeasurement of loss allowance - (7,450) - (7,450)
------------------------------------------- --------- ------------ ------------- ------------ --------
Transfer to lifetime ECL - credit-impaired - 15,309 (15,309) -
------------------------------------------- --------- ------------ ------------- ------------ --------
At 31 December 2020 - - (15,309) (15,309)
------------------------------------------- --------- ------------ ------------- ------------ --------
Higher
risk assets
Expected Credit Loss - ELI Performing not credit Credit
12-month impaired impaired Total
ECL Lifetime Lifetime
ECL ECL
---------------------------------- --------- ------------ ------------- ------------ --------
At 1 January 2019 and 31 December - - - -
2019
---------------------------------- --------- ------------ ------------- ------------ --------
New financial assets originated (385) - - (385)
---------------------------------- --------- ------------ ------------- ------------ --------
At 31 December 2020 (385) - - (385)
---------------------------------- --------- ------------ ------------- ------------ --------
Barryroe
4.5%
net profit Unquoted
OML 18 interest shares
(i) ELI (ii) (iii) (iv) (viii) Total
US$'000 US$'000 US$'000 US$'000 US$'000
---------------------------------- --------- ------------ ------------- ------------ --------
FVOCI
-
Amortised Amortised equity
cost cost FVTPL instrument
---------------------------------- --------- ------------ ------------- ------------ --------
Book value at 31 December 2020 68,925 14,968 6,842 - 90,735
---------------------------------- --------- ------------ ------------- ------------ --------
Current 68,925 3,964 - - 72,889
---------------------------------- --------- ------------ ------------- ------------ --------
Non-current - 11,004 6,842 - 17,846
---------------------------------- --------- ------------ ------------- ------------ --------
Book value at 31 December 2019 112,252 - 2,769 194 115,215
---------------------------------- --------- ------------ ------------- ------------ --------
Current 112,252 - - - 112,252
---------------------------------- --------- ------------ ------------- ------------ --------
Non-current - - 2,769 194 2,963
---------------------------------- --------- ------------ ------------- ------------ --------
Net Profit Interests (Poznan, v) (Gora, vi) (Liesa, vii): These
NPIs have a nil value from acquisition.
Barryroe
4.5%
net profit Unquoted
OML 18 interest shares
(i) (iii) (iv) Total
Company US$'000 US$'000 US$'000 US$'000
------------------------------------------- ------------ ------------- ----------- --------
FVOCI
-
Amortised equity
cost FVTPL instrument
------------------------------------------- ------------ ------------- ----------- --------
Cost / Valuation
------------------------------------------- ------------ ------------- ----------- --------
At 1 January 2019 134,187 51,142 2,625 187,954
------------------------------------------- ------------ ------------- ----------- --------
Finance income 23,313 - - 23,313
------------------------------------------- ------------ ------------- ----------- --------
Loan Notes receipts - principal (23,361) - - (23,361)
------------------------------------------- ------------ ------------- ----------- --------
Loan Notes receipts - interest (19,885) - - (19,885)
------------------------------------------- ------------ ------------- ----------- --------
Impairment of unquoted shares - - (2,625) (2,625)
------------------------------------------- ------------ ------------- ----------- --------
Fair value movement, Income statement - (48,373) - (48,373)
------------------------------------------- ------------ ------------- ----------- --------
At 31 December 2019 114,254 2,769 - 117,023
------------------------------------------- ------------ ------------- ----------- --------
Finance income 16,480 - - 16,480
------------------------------------------- ------------ ------------- ----------- --------
Loan Notes receipts - principal (35,285) - - (35,285)
------------------------------------------- ------------ ------------- ----------- --------
Loan Notes receipts - interest (11,215) - - (11,215)
------------------------------------------- ------------ ------------- ----------- --------
Lifetime ECL - credit-impaired
# (15,309) - - (15,309)
------------------------------------------- ------------ ------------- ----------- --------
Impairment of unquoted shares - - - -
------------------------------------------- ------------ ------------- ----------- --------
Fair value movement, Income statement - 4,073 - 4,073
------------------------------------------- ------------ ------------- ----------- --------
At 31 December 2020 68,925 6,842 - 75,767
------------------------------------------- ------------ ------------- ----------- --------
Expected Credit Loss Provision
------------------------------------------- ------------ ------------- ----------- --------
At 1 January 2019, 31 December - - -
2019 and 31 December 2020
------------------------------------------- ------------ ------------- ----------- --------
# See OML18 ECL table below
------------------------------------------- ------------ ------------- ----------- --------
Higher
risk assets
Expected Credit Loss - OML 18 Performing not credit Credit
12-month impaired impaired Total
ECL Lifetime Lifetime
ECL ECL
------------------------------------------- ------------ ------------- ----------- --------
At 1 January 2019 - (5,467) - (5,467)
------------------------------------------- ------------ ------------- ----------- --------
Net remeasurement of loss allowance - 3,465 - 3,465
------------------------------------------- ------------ ------------- ----------- --------
At 31 December 2019 - (2,002) - (2,002)
------------------------------------------- ------------ ------------- ----------- --------
Impact of modification - (5,857) - (5,857)
------------------------------------------- ------------ ------------- ----------- --------
Net remeasurement of loss allowance - (7,450) - (7,450)
------------------------------------------- ------------ ------------- ----------- --------
Transfer to lifetime ECL - credit-impaired - 15,309 (15,309) -
------------------------------------------- ------------ ------------- ----------- --------
At 31 December 2020 - (15,309) (15,309)
------------------------------------------- ------------ ------------- ----------- --------
Barryroe
4.5%
net profit Unquoted
OML 18 interest shares
(i) (iii) (iv) Total
Company US$'000 US$'000 US$'000 US$'000
------------------------------------------- ------------ ------------- ----------- --------
FVOCI
-
Amortised equity
cost FVTPL instrument
------------------------------------------- ------------ ------------- ----------- --------
Book value at 31 December 2020 68,925 6,842 - 75,767
------------------------------------------- ------------ ------------- ----------- --------
Current 68,925 - - 68,925
------------------------------------------- ------------ ------------- ----------- --------
Non-current - 6,842 - 6,842
------------------------------------------- ------------ ------------- ----------- --------
Book value at 31 December 2019 112,252 2,769 - 115,021
------------------------------------------- ------------ ------------- ----------- --------
Current 112,252 - - 112,252
------------------------------------------- ------------ ------------- ----------- --------
Non-current - 2,769 - 2,769
------------------------------------------- ------------ ------------- ----------- --------
(i) OML 18
In September 2016, the Company secured an indirect economic
interest in OML 18, onshore Nigeria.
The Company undertook a number of steps to effect this purchase.
MLPL, a company incorporated in Mauritius of which San Leon Nigeria
B.V. has a 40% shareholding, was established as a special purpose
vehicle to complete the transaction by purchasing all of the shares
in Martwestern, a company incorporated in Nigeria. Martwestern
holds a 50% shareholding in Eroton, a company incorporated in
Nigeria and the operator of OML 18, and Martwestern also holds an
initial 98% economic interest in Eroton. The economic effect of
this structure is that San Leon has an initial indirect economic
interest of 10.584% in OML 18. Shareholders will note that this is
higher than the percentage interest anticipated by San Leon at the
time of the acquisition in 2016. There have been no further
purchases or payments by San Leon but this revised percentage is
based on a reassessment and recalculation of the various parties'
interests in OML 18.
To partly fund the purchase of 100% of the shares of
Martwestern, MLPL borrowed US$174.5 million in incremental amounts
by issuing loan notes with an annual coupon of 17% ("Loan Notes")
and effective interest rate of 25%, as noted below. Midwestern Oil
and Gas Company Limited ("Midwestern") is the 60% shareholder of
MLPL and transferred its shares in Martwestern to MLPL as part of
the full transaction. Following its placing in September 2016, San
Leon became beneficiary and holder of all Loan Notes issued by MLPL
and the holder of an indirect economic interest in OML 18. San Leon
is due to be repaid the full amount of the US$174.5 million plus
the 17% coupon once certain conditions have been met and using an
agreed distribution mechanism. Through its wholly owned subsidiary,
San Leon Nigeria B.V., the Company is also a beneficiary of any
dividends that will be paid by MLPL as a 40% shareholder in MLPL
but the Loan Notes repayments must take priority over any dividend
payments made to the MLPL shareholders.
The fair value assessment of the Loan Notes on acquisition was
calculated as follows:
Total
US$'000
----------------------------------------------------------- --------
Total consideration 188,419
----------------------------------------------------------- --------
Fair value of Loan Notes attributable to equity investment
# (30,889)
----------------------------------------------------------- --------
Net fair value of Loan Notes 157,530
----------------------------------------------------------- --------
Arrangement fees (5,500)
----------------------------------------------------------- --------
Additions to Financial Assets in 2016 including accrued
interest
at date of acquisition 152,030
----------------------------------------------------------- --------
# The fair value of Loan Notes attributable to the equity
investment is calculated using a discount factor of management's
estimate of a market rate of interest of 8% above the coupon
rate of 17% over the term of the Loan Notes, giving an
effective interest rate of 25%.
The key information relevant to the fair value of the Loan Notes
on the date they were initially recognised is as follows:
Inter-relationships
between the unobservable
Significant unobservable inputs and fair value
Valuation technique inputs* measurements
--------------------- ----------------------------------------------------------- --------------------------
Discounted cash flows Nil
* Discount rate 25% based on a market rate of interest
of 8% above the coupon rate of 17%
* MLPL ability to generate cash flows for timely
repayment
* Loan Notes are repayable in full by 31 December 2021
(2019: 30 September 2020).
--------------------- ----------------------------------------------------------- --------------------------
*Day 1 and considered appropriate at 31 December 2020.
The business model for the MLPL loan is to hold to collect. The
Loan Notes are accounted for at amortised cost.
The credit risk is managed via various undertakings, guarantees,
a pledge over shares and the mechanism whereby MLPL prioritises
payment of sums due under the Loan Notes. These are described
further in Note 31 of Annual Report and Accounts. Given the size
and quality of the OML 18 oil and gas asset the main credit risk is
regarded as the timing of payments by MLPL which is dependent on
dividend distributions by Eroton rather than being unable to pay
the total quantum due under the Loan Notes. To date Eroton have
been unable to make a dividend distribution. Consequently, MLPL had
to enter into a loan in 2017 and subsequently, in order to be able
to meet its obligations under the Loan Notes and make payments to
San Leon.
On 6 April 2020, the Company entered into an Agreement with
MLPL, amending the timing of the remaining payment of the Loan
Notes Instrument. At the date of the Agreement, the remaining
outstanding balance on the par value was US$82.1 million*
(accounted for as US$79.5 million under IFRS). Under the terms of
the Agreement, US$10.0 million was due to be repaid on or before 6
October 2020, with the balance of the Loan Notes receivable payable
in three quarterly instalments, commencing in July 2021 and
completing by December 2021. The outstanding loan will continue to
have an annual coupon rate of 17% and an effective interest rate of
25% per annum until repaid. All other material terms of the Loan
Notes Instrument remain unchanged. The Agreement with MLPL was
accounted for as a modification of the financial asset which did
not give rise to derecognition. A loss of US$2.5 million was
recognised in respect of the change in present value of the revised
cashflows discounted at the original effective interest rate.
During 2020 San Leon received total payments under the Loan
Notes of US$46.5 million (2019: US$43.2 million). The payments
received during 2020 represent principal of US$35.3 million (2019:
US$23.3 million) and interest of US$11.2 million (2019: US$19.9
million)) on the Loan Notes repaid. As at 31 December 2020 there
was US$84.2 million in principal and interest (2019: US$114.3
million), due under the Loan Notes. As at 31 December 2020, US$5.0
million was outstanding from the US$10.0 million due to be repaid
on 6 October 2020. Since then, US$0.8 million of the balance
outstanding has been received.
The Directors of San Leon have considered the credit risk of the
Loan Notes at 31 December 2019 and 31 December 2020. Due to the
inability of MLPL to make dividend distributions, the Directors
continue to consider that the credit risk has significantly
increased since initial recognition. At 31 December 2019 a
provision for the lifetime expected credit loss of the Loan Notes
had been recognised. In 2020, issues such as the impact of the
Covid-19 pandemic on the global economy, the volatility in oil
prices and demand, OPEC quotas, and recent operational challenges
experienced by OML 18 resulted in a significant loss being recorded
in MLPL at 31 December 2020. This, along with ongoing production
issues at the field has impacted the financial strength of MLPL,
particularly in respect of short term liquidity.
In addition, the Directors have reviewed the counterparty credit
risk associated with measurement of the expected credit loss. This
was assessed as having increased significantly since initial
recognition, and is now considered to have increased further during
the year ended 31 December 2020.
Management are still confident in the operational potential of
OML 18 and ultimately recovering the full amount of the outstanding
Loan Notes, however due to the above issues management are unable
to determine the timing of future cashflows and for this reason the
Loan Notes are now considered credit impaired.
The Loan Notes are unique assets for which there is no directly
comparable market data. Repayments of the Loan Notes are expected
to be made from the underlying cashflows that support MLPL. The
Directors have considered the credit risk of MLPL, in particular in
light of the Covid-19 pandemic and the resultant impact on the oil
price and demand, as well as ongoing short term production issues.
As a result, the credit risk has been determined to have increased
since 31 December 2019 and the Loan Notes are now considered to be
impaired. In previous periods an annualised expected credit loss of
3.11% was applied to the amount outstanding on the Loan Notes. This
rate was determined on the basis of long-term historical default
rates of loans originated in similar geography and industry. A
default rate determined by reference to historical default rates
has been determined to be less appropriate in the current
environment as a result of the uncertainty created by the Covid-19
pandemic and ongoing operational issues. In addition, the change in
profile of the repayments due under the Loan Notes, arising as a
result of the amendments to the Loan Notes agreed in April 2020,
means that an expected default risk taking into account the timing
of the payments is now also appropriate. An impairment has been
estimated based on a forward looking analysis where a range of
outcomes has been considered taking into account the size and
timing of the contractual cashflows, the risk of late payment and
the risk of default leading to less than full recovery of the
amounts due in respect of the Loan Notes. The Directors have
considered the possible scenarios and used their judgement to
estimate a weighted average outcome of these scenarios. The
impairment is calculated as the difference between the present
value of the weighted average of possible outcomes (discounted at
the effective interest rate of the Loan Notes) and the present
value of the contractual cashflows. This has then been compared to
publicly available macroeconomic data of default rates by geography
and industry.
As at 31 December 2020 the Loan Notes are considered credit
impaired. The expected credit loss of US$15.3 million (2019: US$2.0
million) has been presented net with the amortised cost of the Loan
Notes.
*Refer to Alternate Performance Measures for full reconciliation
of IFRS numbers and Alternative Performance Measures.
(ii) Energy Link Infrastructure (Malta) Limited
In August 2020, the Company acquired an indirect economic
interest in the Alternate Crude Oil Evacuation System ("ACOES")
project.
The interest was acquired through the direct investment in
Energy Link Infrastructure (Malta) Limited ("ELI"), a company
incorporated in Malta, which owns the ACOES project through its
100% owned subsidiary Energy Link Infrastructure (Nigeria) Limited,
a company incorporated in Nigeria.
The investment comprises a 10% equity interest in ELI together
with a US$15.0 million shareholder loan at a coupon of 14% per
annum over 4 years, and repayable quarterly following a one year
moratorium from the date of investment. Funds were provided to ELI
in two tranches with the first US$10.0 million tranche being paid
in August, and the second tranche of US$5.0 million on 6 October
2020, being half of the funds due from Midwestern Leon Petroleum
Limited as part of the repayment of the MLPL Loan Notes.
The fair value assessment of the Loan Notes on acquisition was
calculated as follows:
Total
US$'000
----------------------------------------------------------- --------
Total consideration 15,000
----------------------------------------------------------- --------
Fair value of Loan Notes attributable to equity investment
# (443)
----------------------------------------------------------- --------
Net fair value of Loan Notes 14,557
----------------------------------------------------------- --------
# The fair value of Loan Notes attributable to the equity
investment is calculated using a discount factor of management's
estimate of a market rate of interest of 2% above the coupon
rate of 14% over the term of the Loan Notes, giving an
effective interest rate of 16%.
The key information relevant to the fair value of the Loan Notes
on the date they were initially recognised is as follows:
Inter-relationships
between the unobservable
Significant unobservable inputs and fair value
Valuation technique inputs* measurements
--------------------- ----------------------------------------------------------- --------------------------
Discounted cash flows Nil
* Discount rate 16% based on a market rate of interest
of 2% above the coupon rate of 14%
* ELI ability to generate cash flows for timely
repayment
* Loan Notes are repayable in full by 6 October 2024.
--------------------- ----------------------------------------------------------- --------------------------
*Day 1 and considered appropriate at 31 December 2020.
The intention for the ELI loan is to hold to collect.
The credit risk is managed via various undertakings, such as
representations, warranties and covenants and the ability for a
preferential distribution should some warranties be breached. These
are described further in Note 31 of the Annual Report and Accounts.
Given the nature and stage of the asset the main credit risk is
regarded as the timing of payments by ELI Malta which is dependent
on dividend distributions by ELI Nigeria rather than being unable
to pay the total quantum due under the Loan Notes. Currently the
Loan Notes are in good standing with the first repayment due on 31
July 2021.
During 2020 San Leon was not due any contractual repayments of
the Loan Notes. As at 31 December 2020 there was US$15.4 million in
principal and interest, due under the Loan Notes.
The Directors of San Leon have considered the credit risk of the
Loan Notes at 31 December 2020. Both tranches of the Loan Notes
were issued in H2 2020, with a one year repayment holiday. The
first repayment due is on 31 July 2021 and therefore the Loan Notes
are currently in good standing. Despite some project delays due to
the impacts of Covid-19, it is not expected that that this would
impact the ability of ELI to make Loan Note repayments, with
current projections indicating that all debt will be serviced in
accordance with contract expectations. The Directors do not
consider the credit risk has significantly increased since initial
recognition, and a provision for a 12-month expected credit loss of
the Loan Notes has been recognised.
In addition, the Directors have reviewed the counterparty credit
risk associated with measurement of the expected credit loss and,
this has been assessed as not having increased significantly since
initial recognition. A factor that has been considered to reduce
overall credit risk is a guarantee from ELI Nigeria, who guarantee
all payment obligations of ELI Malta.
An expected credit loss provision has been estimated based on a
forward looking analysis where a range of outcomes has been
considered taking into account the size and timing of the
contractual cashflows, the risk of late payment and the risk of
default leading to less than full recovery of the amounts due in
respect of the Loan Notes. The Directors have considered the
possible scenarios and used their judgement to estimate a weighted
average outcome of these scenarios. The ECL provision is calculated
as the difference between the present value of the weighted average
of possible outcomes (discounted at the effective interest rate of
the Loan Notes) and the present value of the contractual cashflows.
This has then been compared to publicly available macroeconomic
data of default rates by geography, industry and rating.
The Company determined that the expected credit loss provision
of US$0.4 million, being 2.6% of the balance at acquisition was
appropriate.
(iii) Barryroe - 4.5% Net Profit Interest
SLE holds a 4.5% Net Profit Interest in the Barryroe ("Barryroe
NPI") oil field at fair value through profit and loss under IFRS 9.
In 2019 a market-based valuation approach was adopted, using the
price of the publicly listed shares of Providence Resources plc
("Providence") (operator and holder of an 80% interest in the
Barryroe oil field) as its basis. The Directors believe the markets
assessment of the current risks and uncertainties of the project
have been reflected within the share price of Providence at year
end, and it is therefore appropriate to use this to update their
valuation.
The 2020 announcements by Providence in relation to Standard
Exploration Licence 1/11 which contains the Barryroe oil
accumulation indicated that a partner for the project had been
found, which had reduced project risk around both funding and
timing of the potential development of the asset.
Given the latest announcements, the Directors have reviewed the
modelling assumptions and consider it reasonable and appropriate to
continue to use a market based approach to increase the Barryroe
carrying value by US$4.0 million (2019: impairment of US$48.4
million) to US$6.8 million to reflect their estimate of the impact
of these risks to the future cash flows on the value of the
asset.
The key information relevant to the fair value of the Barryroe
4.5% net profit interest is as follows:
Inter-relationships
between the unobservable
Valuation Significant unobservable inputs and fair value
technique inputs measurements
------------ --------------------------------------------------------- ------------------------------------------------------
Market based The estimated fair
approach * Estimated value of NPI as percentage of total field value would increase
using share NPV 9.5% (2019: 9.5%) / (decrease) if:
price
of Operator * US Dollar exchange rate increased / (decreased)
(Providence)
------------ --------------------------------------------------------- ------------------------------------------------------
(iv) Ardilaun Energy Limited
As part of the consideration for the sale of Island Oil &
Gas Limited to Ardilaun Energy Limited ("Ardilaun") in 2014
Ardilaun agreed to issue shares equivalent to 15% of the issued
share capital of Ardilaun to San Leon. The original fair value of
the 15% interest in Ardilaun was based on a market transaction in
Ardilaun shares.
The Directors have considered the carrying value of this
interest at 31 December 2020 and given the length of time to obtain
Irish government approval for the transaction, the Directors feel
it is prudent to continue to carry the 15% of Ardilaun shares still
to be issued to San Leon at a value of US$Nil (2019: US$Nil).
(v) Poznan 10% Net Profit Interest
In 2016, San Leon sold its 35% interest in the Poznan assets for
a consideration of EUR1 plus a 10% NPI. Until active development
commences a nil value has been placed on the NPI. There has been no
change in 2020.
(vi) Gora 5% Net Profit Interest
In 2018, San Leon sold its interest in the Gora assets for a
consideration of EUR1 plus a 5% NPI. Until active development
commences a nil value has been placed on the NPI. There has been no
change in 2020.
(vii) Liesa 5% Net Profit Interest
In 2018, San Leon sold its interest in the Liesa assets for a
consideration of EUR1 plus a 5% Net Profit Interest ("NPI"). Until
active development commences a nil value has been placed on the
NPI. There has been no change in 2020.
(viii) Gemini Resources Limited
In 2019, San Leon converted a debtor of US$192,607 due from
Gemini Resources Limited ("Gemini") into 54,818 fully paid ordinary
shares in Gemini.
(ix) Amedeo Resources plc
At 31 December 2020, the Company holds 213,512 ordinary shares
at a market value of US$Nil (2019: US$Nil). The value of the
investment was written down to nil in 2018 due to the shares of
Amedeo Resources plc being de-listed.
9. Subsequent events
MLPL Loan Note
The Company has received US$0.8 million in Loan Note repayments
since 31 December 2020.
Barryroe NPI
On 22 April 2021, Providence Resources plc announced that the
farmout agreement with SpotOn Energy for the Barryroe Licence had
been terminated due to SpotOn Energy's inability to secure
financing. Providence are now progressing arrangements for an
alternative funding package to finance 100% of the costs for the
early development scheme of the Barryroe Licence.
Since this announcement the share price of Providence has
materially reduced compared to the price quoted at 31 December 2020
which was used as a key input in the valuation of the Company's
4.5% NPI in Barryroe. Should the share price remain materially
lower than at half year reporting, the carrying value of the
Barryroe NPI will likely be impaired.
Appointment of new Director
On 7 May 2021, John Brown was appointed to the Board as an
Independent Non-Executive Director.
Resignation of Director
On 7 May 2021, Alan Campbell stepped down from the Board as an
Executive Director.
Property owned by Mr. OisÃn Fanning
In June 2021, the Company signed a licence with Mr. OisÃn
Fanning to use the property previously disclosed in Note 31 of the
Annual Report and Accounts for office space. The monthly rent
payable is on average US$32,000.
ELI - additional investment
On 24 June 2021, the Company announced a conditional investment
of US$2.0 million and an option to conditionally invest a further
US$6.5 million in the equity of ELI. The equity being conditionally
purchased and the equity that may be purchased via the option are
existing equity interests in ELI owned by Walstrand (Malta)
Limited, ELI's largest shareholder.
Proposed transactions and Suspension of San Leon shares
On 24 June 2021, the Company announced that it was is in
preliminary discussions with Midwestern about acquiring
Midwestern's interest in the OML 18 oil and gas block located
onshore in Nigeria. At this date, heads of terms for the
transaction had not been agreed. The transaction would involve San
Leon acquiring the outstanding shares not already owned by San Leon
in relation to MLPL. San Leon is not contemplating acquiring
Midwestern. San Leon currently owns 40% of MLPL with Midwestern
owning the other 60%.
In addition, the Company is considering making further debt and
equity investments in ELI.
Elements of the above transactions would constitute a reverse
takeover under rule 14 of the AIM Rules for Companies.
San Leon and Midwestern are in discussions for the Company to
acquire the remaining 60% equity interest in MLPL from Midwestern.
The consideration for this would be satisfied by the issuance of a
substantial number of new ordinary shares in San Leon to Midwestern
such that Midwestern would become the majority shareholder of San
Leon.
The proposed transaction is at a very early stage and will
therefore be subject to a number of factors, including, inter alia,
the completion of due diligence, negotiation of transaction
documentation, regulatory approvals, a "whitewash" under the Irish
Takeover Rules and shareholder approval. As such, there is no
certainty that the transaction will proceed nor any certainty
regarding the terms on which they would proceed.
Related party
Midwestern currently holds more than 10% of the Company's
ordinary shares. Accordingly, Midwestern is classified as a related
party under the AIM Rules and the transactions above in which
Midwestern has an interest will therefore be treated as
transactions with a related party pursuant to rule 13 of the AIM
Rules.
Suspension of trading
As the transactions would constitute a reverse takeover under
rule 14 of the AIM Rules, these will be subject, inter alia, to the
approval of San Leon's shareholders. As such, a further
announcement including, inter alia, full details of the
transactions will be issued at the appropriate time once binding
contracts are entered into and an AIM admission document published
and sent to San Leon's shareholders with a notice of general
meeting.
In accordance with rule 14 of the AIM Rules, the Company's
ordinary shares were suspended from trading on AIM on 24 June 2021.
The Company's ordinary shares will remain suspended until such time
as either an AIM admission document is published or an announcement
is released confirming that the relevant transactions are not
proceeding.
10. Share capital - Group and Company
Rights and obligations attaching to the Ordinary Shares
The Company has no securities in issue conferring special rights
with regards control of the Company. All Ordinary Shares rank pari
passu, and the rights attaching to the Ordinary Shares (including
as to voting and transfer) are as set out in the Company's Articles
of Association ("Articles").
Number of
Number of Deferred
New Ordinary Ordinary shares Authorised
shares EUR0.0001 Equity
EUR0.01 each each US$'000
-------------------- ------------- ----------------- ----------
Authorised equity
-------------------- ------------- ----------------- ----------
At 1 January 2019 2,847,406,025 1,265,259,397,525 177,475
-------------------- ------------- ----------------- ----------
At 31 December 2019 2,847,406,025 - 177,475
-------------------- ------------- ----------------- ----------
At 31 December 2020 2,847,406,025 - 177,475
-------------------- ------------- ----------------- ----------
Issued, called up and fully paid:
Number of
Number of Deferred
New Ordinary Ordinary shares Share Share
shares EUR0.0001 capital premium
EUR0.01 each each US$'000 US$'000
-------------------------- ------------- ------------------- --------- ---------
At 1 January 2019 500,256,857 1,265,259,397,525 150,600 478,666
-------------------------- ------------- ------------------- --------- ---------
Issue of shares in lieu
of salary (i) 5,590,270 - 63 2,036
-------------------------- ------------- ------------------- --------- ---------
Exercise of share options
(ii) 250,000 - 3 96
-------------------------- ------------- ------------------- --------- ---------
Reduction of capital - (1,265,259,397,525) (144,871) (459,721)
-------------------------- ------------- ------------------- --------- ---------
Tender offer (50,475,000) - (576) -
-------------------------- ------------- ------------------- --------- ---------
Share buybacks (4,319,113) - (47) -
-------------------------- ------------- ------------------- --------- ---------
At 31 December 2019 451,303,014 - 5,172 21,077
-------------------------- ------------- ------------------- --------- ---------
Share buybacks (1,389,988) - (15) -
-------------------------- ------------- ------------------- --------- ---------
At 31 December 2020 449,913,026 - 5,157 21,077
-------------------------- ------------- ------------------- --------- ---------
(i) On 25 February 2019, 5,590,270 ordinary shares were issued
to OisÃn Fanning in lieu of 80% of his salary due to him for the
period 1 September 2016 to 30 September 2018.
(ii) On 20 March 2019, the Company issued and allotted 250,000
New Ordinary Shares of EUR0.01 each in respect of options
exercised. The options were exercised at a price of GBP0.30
(US$0.39) per share.
Reduction of Capital
On 8 February 2019, the Company obtained local statutory
approval to cancel all the Deferred Shares of EUR0.0001 each, this
resulted in the release of Share Capital of US$144.9 million, Share
Premium of US$459.7 million, a required Special Reserve of US$5.0
million and an increase in retained earnings of US$599.0
million.
Tender offer
On 22 March 2019 the Company announced the result of the Tender
Offer, being an offer by the Company to purchase shares from
shareholders at 46p per share set out in the shareholder circular
published by the Company on 20 February 2019 (the "Circular").
The maximum number of Ordinary Shares authorised by shareholders
under the Tender Offer, being 50,475,000 Ordinary Shares, was
acquired for a total cost of US$30.5 million. This represented
approximately 9.97% of the issued ordinary share capital of the
Company, at the date of the announcement.
The Tender Offer was oversubscribed, with a total of 81,177,508
Ordinary Shares validly tendered by Qualifying Shareholders.
Qualifying Shareholders who tendered Ordinary Shares equal to or
less than their Individual Basic Entitlement had their tender
accepted in full. Qualifying Shareholders who validly tendered in
excess of their Individual Basic Entitlement had their tender
accepted in respect of their Individual Basic Entitlement (being
approximately 9.97% of their shareholding) plus approximately
50.23% of the number of Ordinary Shares in excess of their
Individual Basic Entitlement that they validly tendered.
All proceeds payable under the Tender Offer to the Company's
shareholders were transferred to Computershare on 23 March 2019 for
distribution to the shareholders.
As set out in the Circular, the Ordinary Shares were purchased
by Cantor Fitzgerald Europe pursuant to the Tender Offer and the
Company purchased such Ordinary Shares from Cantor Fitzgerald
Europe under the terms of the Repurchase Agreement described in the
Circular.
The Company cancelled the Ordinary Shares purchased by it under
the Repurchase Agreement, reducing the number of Ordinary Shares in
issue from 506,097,127 Ordinary Shares to 455,622,127 Ordinary
Shares (the "Cancellation").
Share buyback programme
On 18 October 2019 the Company announced that, pursuant to the
shareholder resolutions passed on 27 September 2019 at the Annual
General Meeting, it planned to acquire ordinary shares of EUR 0.01
nominal value each ("Ordinary Shares"), up to a total value of
US$2.0 million (the "Buyback Programme"). In accordance with the
shareholder resolutions, the Company is proposed to acquire the
Ordinary Shares at a maximum price of the greater of (i) 105% of
the average market price of such shares for the previous five days
and (ii) the higher of the price quoted for the last independent
trade and the highest current independent bid or offer for such
shares.
Ordinary Shares acquired as a result of the Buyback Programme
were cancelled. The Buyback Programme was funded from the Company's
cash balances.
At 31 December 2019 Company had repurchased 4,319,113 Ordinary
Shares at an aggregate value of US$1.5 million. Following
cancellation of the shares repurchased to 31 December 2019, the
total number of Ordinary Shares in issue with voting rights was
451,303,014.
On 22 January 2020 the Company announced that it had completed
the buyback programme. Under the Buyback Programme, the Company
repurchased 5,709,101 Ordinary Shares at an aggregate value of
GBP1,570,085.49. Following cancellation of the final shares
repurchased, the total number of Ordinary Shares in issue with
voting rights was 449,913,026.
ALTERNATIVE PERFORMANCE MEASURES
The Group monitors the par value of the Loan Notes, which is a
non-IFRS measure.
The Group believes that the disclosure of the par value of the
Loan Notes will assist investors in evaluating the performance of
the underlying Loan Notes. Given that these cash metrics are used
by management, they also give the investor an insight into how the
Group management review and monitor the Loan Notes on an ongoing
basis.
A reconciliation from the value of the OML 18 Loan Notes under
IFRS 9, excluding expected credit losses, and the par value is
provided below:
IFRS
9 Amortised IFRS
Cost 9 Adjustment Par value
US$'000 US$'000* US$'000
--------------------------------------------------- ------------ -------------- ---------
Loan Notes at 31 December 2019 114,254 4,494 118,748#
--------------------------------------------------- ------------ -------------- ---------
Interest accrued on Loan Notes (1 January 2020 to
6 April 2020) 6,783 (1,886) 4,897
--------------------------------------------------- ------------ -------------- ---------
Cash receipts (1 January 2020 to 6 April 2020) (41,500) - (41,500)
--------------------------------------------------- ------------ -------------- ---------
Loan Notes at 6 April 2020 79,537 2,608 82,145
--------------------------------------------------- ------------ -------------- ---------
Interest accrued on Loan Notes (7 April 2020 to 31
December 2020) 9,697 595 10,292
--------------------------------------------------- ------------ -------------- ---------
Cash receipts (7 April 2020 to 31 December 2020) (5,000) - (5,000)
--------------------------------------------------- ------------ -------------- ---------
Loan Notes at 31 December 2020 84,234 3,203 87,437^
--------------------------------------------------- ------------ -------------- ---------
Interest accrued on Loan Notes (1 January 2021 to
18 June 2021) 8,961 (2,496) 6,465
--------------------------------------------------- ------------ -------------- ---------
Cash receipts (1 January 2021 to18 June 2021) (750) - (750)
--------------------------------------------------- ------------ -------------- ---------
Loan Notes at 18 June 2021 92,445 707 93,152
--------------------------------------------------- ------------ -------------- ---------
*The effective interest rate is 25% and the coupon rate is 17%
(Note 8)
# Made up of capital balance of US$108.4 million and accrued
interest of US$10.3 million
^ Made up of capital balance of US$82.1 million and accrued
interest of US$5.3 million
A reconciliation from the value of the ELI Loan Notes under IFRS
9, excluding expected credit losses, and the par value is provided
below:
IFRS
9 Amortised IFRS
Cost 9 Adjustment Par value
US$'000 US$'000* US$'000
-------------------------------------------------- ------------ -------------- ---------
Loan Notes at 31 December 2020 15,353 399 15,752^
-------------------------------------------------- ------------ -------------- ---------
Interest accrued on Loan Notes (1 January 2021 to
18 June 2021) 1,092 (120) 972
-------------------------------------------------- ------------ -------------- ---------
Cash receipts (1 January 2021 to 18 June 2021) - - -
-------------------------------------------------- ------------ -------------- ---------
Loan Notes at 18 June 2021 16,445 279 16,724
-------------------------------------------------- ------------ -------------- ---------
*The effective interest rate is 16% and the coupon rate is 14%
(Note 8)
^ Made up of capital balance of US$15.0 million and accrued
interest of US$0.8 million
Glossary
2C Best estimate of Contingent Resources
1P Proven Reserves
2P Proven plus Probable Reserves
3P Proven plus Probable plus Possible Reserves
AIM The London Stock Exchange's AIM market
AIM Rules AIM Rules for Companies
BCF or bcf Billion cubic feet
Bilton Bilton Energy Limited
B.V. Dutch private limited company
BVI British Virgin Islands
CPR Competent Person's Report
Eroton Eroton Exploration and Production Company Limited
US$'000 United States Dollars, thousands
ESM European Stability Mechanism
FSO Floating Storage and Offloading
Group San Leon and its subsidiaries
LLP Limited liability partnership
Loan Notes $174.5 million principal amount of 17% fixed rate
loan notes acquired by San Leon pursuant to the amended and
restated loan note instrument dated September 30, 2016 executed and
issued by Midwestern Leon Petroleum Limited
Ltd or limited A private limited company incorporated under the
laws of England and Wales, Scotland, certain Commonwealth countries
and Ireland
m Metres
'm Millions
Martwestern Martwestern Energy Limited
Midwestern Midwestern Oil and Gas Company Limited
MLPL Midwestern Leon Petroleum Limited
MSA Master Services Agreement
mmbbL Million barrels
Nomad A company that has been approved as a nominated advisor
for AIM by the London Stock Exchange
NNPC Nigerian National Petroleum Corporation
NPI Net Profit Interest
PLC A publicly held company
San Leon or the Company San Leon Energy PLC
SEDA Standby Equity Distribution Agreement
Sp. z o.o. Polish limited liability company
Sp. z o.o. sp.k Polish LLP
SPV Special purpose vehicle
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END
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June 29, 2021 02:00 ET (06:00 GMT)
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San Leon Energy (LSE:SLE)
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From May 2023 to May 2024