TIDMSLE
RNS Number : 6150C
San Leon Energy PLC
14 June 2023
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information for the purposes of Regulation 11 of the Market Abuse
(Amendment) (EU Exit) Regulations 2019/310. With the publication of
this announcement, this information is now considered to be in the
public domain.
14 June 2023
San Leon Energy plc
(" San Leon " or the " Company ")
Proposed refinancing and cashflow update
Expected delay in publication of the Company's results for the
year ended 31 December 2022
San Leon, the independent oil and gas production, development
and exploration company focused on Nigeria, announces a further
update in relation to its proposed refinancing and its current
financial situation.
Update on refinancing discussions and outstanding creditors
Since the announcement by the Company on 8 July 2022 of the
proposed transactions with Midwestern Oil & Gas Company Limited
("Midwestern") and the Company's further conditional investments in
Energy Link Infrastructure (Malta) Limited ("ELI") (together the
"Proposed Transactions") the Company has had continuing discussions
in relation to securing an alternative US$50 million loan facility
to be applied towards the Proposed Transactions and to satisfy the
Company's working capital requirements. Details of the Proposed
Transactions were announced by the Company on 8 July 2022 and set
out in the Admission Document published by the Company on 8 July
2022 (the "Admission Document") .
As previously announced, the proposed refinancing discussions
have not progressed as fast as the Board expected and, although the
discussions are now at a very advanced stage, the Company has not
yet been able to access the funding from such an alternative loan
facility. However, with significant progress having been made in
the past weeks, the Board is still optimistic that a conclusion
will be reached and expects to provide an update to shareholders in
due course.
As announced on 24 March 2023 (and previously), pending
completion of the proposed refinancing, the Company has received
only very limited cash inflows. The Company currently has
approximately US$10.5 million of unpaid creditors, including
directors, employees, professional advisers and tax authorities.
San Leon has sought to maintain a regular dialogue with both its
creditors and major shareholders and keep them informed of the
status of the proposed refinancing, but there is understandably
some pressure from creditors for settlement of amounts due to them
and the continuing support of creditors cannot be guaranteed
indefinitely. However, the Board is confident that, following the
proposed refinancing being successfully concluded, all creditors
will be settled in full shortly afterwards.
Assets update
Further to the announcement by the Company on 3 April 2023, the
spread mooring of the FSO (floating storage and offloading) vessel
for ELI has been completed (spread mooring is a multi-point mooring
system that moors vessels to the seabed using multiple mooring
lines). ELI is now in the process of finalising the renewal of
necessary administrative regulatory permits to commence full
terminal operations. The importance of this milestone is that it
places ELI, once it receives the funds from the Further ELI
Investments from the Company (details of which are set out in the
Admission Document), in a position to export crude oil and thereby
generate near-term cashflows which, in turn, will enable it in time
to repay San Leon's investment and loans.
San Leon reminds shareholders and investors that,
notwithstanding its short term cashflow constraints, the Company's
current unaudited balance sheet has a significant asset base with,
inter alia, over US$115 million and US$20 million owed by
Midwestern Leon Petroleum Limited (the "MLPL Loan") and ELI
respectively. Although the MLPL Loan would be extinguished as part
of the Proposed Transactions (and is currently subject to a
conditional payment waiver with Midwestern until the sooner of
completion of the MLPL Reorganisation) it otherwise remains a valid
obligation, with interest continuing to accrue on the principal
amounts waived pending completion of the MLPL Reorganisation, and
therefore a significant asset of the Company.
Furthermore, the Board remains in negotiations for the proposed
sale of the Company's non-core investment in the Oza oil field in
Nigeria, which had a current book value of US$5.6 million in San
Leon's unaudited interim results for the six months ended 30 June
2022, to generate near-term funding. Disappointingly the
prospective buyer's own funding has taken longer than expected to
conclude, but this potential transaction remains live with
discussions ongoing.
Accounts for the year ended 31 December 2022
In light of the delay in securing the proposed refinancing
referred to above, the Board has concluded that the Company will
not be in a position to publish its audited accounts for the year
ended 31 December 2022 before 30 June 2023. The delay is due to San
Leon not yet receiving the audited financial statements for the
year ended 31 December 2022 of Midwestern Leon Petroleum Limited
("MLPL"), which includes the consolidated results of both
Martwestern Energy Limited and Eroton Exploration & Production
Company Limited (the operator of OML 18), as well as not yet
receiving the audited financial statements of ELI for the same
period. Each of these are independently run companies and so San
Leon has no control over their respective audit and year end
processes.
This process also involves several jurisdictions, and when
completed, it will be followed by a number of normal audit
confirmatory and technical review matters, which when completed
(following the completion of the Company's refinancing) will then
put the Company in a position to finalise and publish its audited
accounts for the year ended 31 December 2022.
Although it is the Board's intention and expectation that work
will continue expeditiously on finalising its accounts, the Board
expects that the Company's shares will be suspended from trading on
AIM with effect from 3 July 2023, pending publication of the
Company's accounts for the year ended 31 December 2022.
Further announcements will be made as and when appropriate.
Oisin Fanning, CEO of San Leon, commented:
"I recognise that shareholders will be disappointed with the
delays to our refinancing and publication of accounts and I, and
all of the San Leon board, share that frustration. However, based
on our most recent discussions with our proposed funding partners,
there is good reason to be optimistic that we are nearing a
satisfactory conclusion. Once funding has been secured, we expect
to progress quickly towards making our further investments in ELI
and finalising our accounts. In the meantime, San Leon's asset
base, including our investment in the OML 18 oil & gas field
and its prospects in the second half of this calendar year,
particularly through ELI's activities, is looking exciting."
Unless otherwise defined herein, the capitalised defined terms
used in this announcement have the same meaning as those used in
the Company's announcement of 8 July 2022 and the Admission
Document published on the same date.
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
James Sinclair-Ford
John Prior
Tavistock
(Financial Public Relations) +44 20 7920 3150
Nick Elwes
Simon Hudson
Plunkett Public Relations +353 1 230 3781
Sharon Plunkett
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
MSCEAPKDFSPDEFA
(END) Dow Jones Newswires
June 14, 2023 02:00 ET (06:00 GMT)
San Leon Energy (LSE:SLE)
Historical Stock Chart
From Nov 2024 to Dec 2024
San Leon Energy (LSE:SLE)
Historical Stock Chart
From Dec 2023 to Dec 2024
