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RNS Number : 9401F
San Leon Energy PLC
24 March 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.
24 March 2022
San Leon Energy plc
("San Leon" or the "Company")
Update on development of the Oza field, Nigeria
San Leon, the independent oil and gas production, development
and exploration company focused on Nigeria, notes the announcement
made today by Decklar Resources Inc. ("Decklar") in Canada. San
Leon has a 11.5% shareholding in Decklar Petroleum Limited ("DPL"),
the local subsidiary of Decklar operating in Nigeria, and has also
made a US$5.5 million loan to DPL, via 10% per annum unsecured
subordinated loan notes.
Part of the text of Decklar's announcement is set out below:
-- "Decklar and its co-venturer Millenium Oil & Gas Company
Limited ("Millenium") have signed a crude handling agreement with
Umugini Pipeline Infrastructure Limited ("UPIL") whereby oil
produced at the Oza Oil Field will be trucked to the UPIL crude
handling facilities and further transferred to the Shell Petroleum
Development Company of Nigeria Limited ("SPDC") JV Forcados Oil
Export Terminal via the Umugini Pipeline.
-- A permit from the Nigerian government regulatory authorities
to transport the crude oil by truck is in the final stages of
approval, and it is anticipated that the first shipments of oil
will be delivered to the UPIL facilities in early April 2022.
-- As previously announced, due to unforeseen downtime,
maintenance and other issues with the Shell-operated Trans Niger
Pipeline, Decklar has suffered delays in establishing crude export
activities and commercial production from the Oza-1 well.
-- A second alternative delivery strategy incorporating barging
oil from the Oza field to an offshore floating storage facility is
also being pursued and would allow for higher shipping volumes once
in place. Negotiations with local firms are in advanced stages to
secure exports through barging oil to an offshore floating storage
and offloading facility.
Calgary, Alberta -- Decklar Resources Inc. (TSX-V: DKL) (OTCQX:
DLKRF) (FSE: A1U1) (the "Company" or "Decklar") is pleased to
announce the signing of a Crude Handling Agreement ("CHA") between
the Company's wholly-owned subsidiary Decklar Petroleum Limited
("DPL"), its co-venturer Millenium and UPIL to deliver oil produced
at the Oza Oil Field to the UPIL crude handling facilities for
injection into the Umugini Pipeline for ultimate delivery to the
SPDC JV Forcados Oil Export Terminal for export and sale of Oza
crude oil production.
Oza Field Oil Export Operations - Trucking and Barging
Decklar has been pursuing logistics and export activities and
made progress on several options, including:
- Completion and signing of the CHA between DPL, Millenium and
UPIL to deliver oil produced at the Oza Oil Field to the UPIL crude
handling facilities for injection into the Umugini Pipeline which
will transport the crude oil to the SPDC JV Forcados Oil Terminal
for export and sale.
- A permit from the Nigerian regulatory authority to transport
the crude oil by truck is in the final stages of approval. It is
anticipated that the first shipments of oil to the UPIL export
facilities commence in early April 2022.
- The next phase, and the most likely mid- to long-term solution
for an alternate export option is barging oil directly from storage
facilities at the Oza Oil Field along the Imo River to a floating
storage and offloading ("FSO") facility located offshore in shallow
waters off the Bonny River.
- Options and logistics to transport oil by barge from the Oza
field to an offshore floating storage facility are currently at
advanced stages of negotiations. Shipping and exporting the Oza
crude oil using the barge and FSO system could enable higher crude
oil volumes per shipment and greater transportation and cost
efficiency.
In terms of operations, Decklar has successfully finalized the
re-entry, re-completion, and flow testing of the Oza-1 well, as
detailed in the press release dated November 5, 2021. Crude oil
storage tanks on site now hold approximately 20,000 barrels of oil,
awaiting export and sale. Once Oza-1 is brought onto commercial
production, the Company expects a stabilized flow rate of between
1,200 - 1,500 barrels of oil per day ("bopd").
Decklar and Millenium had initially planned to utilize the
Shell-operated Trans Niger Pipeline ( " TNP ") to the Bonny Export
Terminal; however, the link to the TNP between Isimiri, where Oza
crude would enter the Shell operated pipeline network, and the TNP
tie-in at Owaza, has been down for maintenance with an uncertain
timeline to restart operations.
As previously announced, 2022 development plans for the Oza
Field include:
- Currently in advanced stages of finalizing arrangements with
local communities and contractors to begin construction of the
access road and associated infrastructure for a new oil well
drilling pad;
- Drilling the first new development well;
- Re-entry, re-completion, and flow testing of the other two
existing wells (Oza-2 and Oza-4), including tie-in to existing
production facilities;
- Installation of a Central Production Facility and
infrastructure tie-ins for new well locations to replace the
current Early Production Facility;
- Completion of an inter-field evacuation pipeline and all related infrastructure; and
- Drilling of up to two additional development wells.
Development plans for the Oza Field beyond 2022 include up to
five additional development wells."
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
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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