San Leon Energy PLC Amendment to investment in the Oza field, Nigeria (8979Z)
January 27 2022 - 10:57AM
UK Regulatory
TIDMSLE
RNS Number : 8979Z
San Leon Energy PLC
27 January 2022
The information communicated within this announcement is deemed
to constitute inside information as stipulated under 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.
27 January 2022
San Leon Energy plc
("San Leon" or the "Company")
Amendment to investment in the Oza field, Nigeria
San Leon, the independent oil and gas production, development
and exploration company focused on Nigeria, is pleased to announce
that its investment in the Oza oil field in Nigeria ("Oza") is now
proceeding with the following amendments.
On 1 September 2020, San Leon announced that it had
conditionally agreed to provide a US$7.5 million loan to Decklar
Resources Limited ("Decklar"), via 10% per annum unsecured
subordinated loan notes of Decklar. Decklar is the holder of a Risk
Service Agreement with Millenium Oil and Gas Company Limited in
relation to Oza. San Leon also announced that it would
conditionally subscribe for a 15% equity interest in Decklar at
nominal value.
As previously announced, US$ 6.75 million of San Leon's proposed
investment remained in escrow and was to be released upon
satisfaction (or waiver) of certain conditions precedent. Despite
delays to concluding the transaction documents, Decklar has
performed the workover of the Oza-1 well, the results of which have
already been announced by San Leon. In summary, the Oza-1 well test
has indicated positive oil results from the lowermost zone,
encountered gas in the middle zone and oil in the uppermost zone.
San Leon has evaluated these results and the San Leon Board has
recommended that it proceeds with an investment in Oza. Decklar is
in agreement with that strategy and also to fully involve San Leon
in future development planning and determining the location of the
first new well to be drilled on the Oza Oil Field.
Accordingly, San Leon has entered into an amendment to its
original agreement with Decklar, the principal terms of which
are:
1) San Leon has agreed to proceed with its investment in Oza,
waiving the remaining conditions precedent.
2) Of the US$6.75 million of funds held in escrow, US$4.75
million has now been released to Decklar and US$2.0 million has
been returned to San Leon pending final completion. San Leon is
obliged to either provide a further loan of US$2.0 million to
Decklar by 30 April 2022 or, alternatively, accept a pro rata
reduction in its shareholding in Decklar.
3) San Leon has agreed to waive its option to invest an additional US$7.5 million in Decklar.
The transactions contemplated by the Subscription Agreement and
Binding LOI are subject to final approval by the TSX Venture
Exchange.
San Leon has previously advanced US$750,000 to Decklar as an
initial deposit. As a consequence of the above transactions, upon
completion San Leon will be interested in US$5,500,000 of 10%
unsecured subordinated Decklar loan notes and a 11.5% equity
interest in Decklar, which will be subscribed for at a nominal
value of N 1,294,118 (approximately US$3,400). The key terms of the
loan notes remain unchanged from those described in the Company's
announcement of 1 September 2020.
In its audited accounts for the year ended 31 December 2020,
Decklar reported a loss before tax of US$5.1 million and total
assets of US$6.0 million. San Leon will be entitled to one seat on
the board of Decklar.
Oisin Fanning, CEO of San Leon Energy, commented:
"Our investment in Oza has taken longer to conclude than
originally anticipated, but Decklar's advancement of the project in
the interim period means that we are now committing funds on the
back of greater clarity around the field performance, which should
de-risk the project for San Leon. We look forward to working more
closely with Decklar on the next stage of development."
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 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.
Enquiries:
San Leon Energy plc +353 1291 6292
Oisin Fanning, Chief Executive
Julian Tedder, Chief Financial Officer
Allenby Capital Limited
(Nominated adviser and joint broker to the Company) +44 20 3328 5656
Nick Naylor
Alex Brearley
Vivek Bhardwaj
Panmure Gordon & Co
(Joint broker to the Company) +44 20 7886 2500
Nick Lovering
James Sinclair-Ford
Brandon Hill Capital Limited
(Joint broker to the Company) +44 20 3463 5000
Oliver Stansfield
Jonathan Evans
Tavistock
(Financial Public Relations) +44 20 7920 3150
Nick Elwes
Simon Hudson
Plunkett Public Relations +353 1 230 3781
Sharon Plunkett
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