REG - San Leon Energy PLC - Update on refinancing and proposed transactions

San Leon EnergyAnnouncement

24/03/2023 07:00

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RNS Number : 0864U  San Leon Energy PLC  24 March 2023

 

 

 

rior 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.

 

24 March 2023

San Leon Energy plc

("San Leon" or the "Company")

 

Update on refinancing and proposed transactions

 

San Leon, the independent oil and gas production, development and exploration
company focused on Nigeria, announces a further update in relation to: i) its
current refinancing discussions and ii) the proposed transactions with
Midwestern Oil & Gas Company Limited ("Midwestern") and the Company's
further conditional investments in ELI (together the "Proposed Transactions").
 Details of the Proposed Transactions were announced by the Company on 8 July
2022.

 

Update on the refinancing discussions

 

As announced by the Company on 20 December 2022, the Company was expecting to
conclude a refinancing with a preferred alternative funding partner early in
2023. Discussions have advanced since then, albeit much slower than
anticipated, both with this partner and also with a second potential lender.
 However, the Company is now in final discussions and expects to complete the
refinancing in the near term.  Further announcements will be made as and when
appropriate.

 

Pending completion of the refinancing, the Company has received only very
limited cash inflows and as a result continues to take steps to manage its
overheads. These cashflows are contributing towards the day to day running of
the business but several creditors remain outstanding, predominantly related
to the ongoing transactions with Midwestern and ELI, as described more fully
below.  The Company is maintaining a regular dialogue with these creditors
and keeping them informed of the expected conclusion of the refinancing. The
Company's creditors are not currently putting the Company under undue pressure
and the board of directors (the "Board") is confident that all creditors will
be settled following the conclusion of the proposed refinancing referenced
above.

 

In addition to the proposed refinancing, and as confirmed in the Company's
recent announcement on 13 March 2023, San Leon continues to explore a
potential sale of its non-core investments in Decklar Petroleum Limited,
although the completion of that sale remains subject to the purchaser
finalising its own funding arrangements. With documentation substantially
agreed, San Leon has been advised by the purchaser that, once the purchaser's
funding is in place, completion will take place within a matter of days.
 Nevertheless, the timing is outside of the Company's control at present and
further announcements will be made as and when appropriate.

 

Update on the Proposed Transactions

 

The Board continues to believe that the Proposed Transactions will be
transformational for the Company and it continues to work towards their
completion. However, the Board notes the recent challenge by NNPC Limited and
OML 18 Energy Resource Limited of the operatorship of Oil Mining License (OML)
18 ("OML 18"), details of which have been announced by the Company on 7 and 13
March 2023. In addition, the Board notes that Eroton is in the Nigerian Law
courts challenging the matter and expects the case to be resolved shortly.
 San Leon expects that the New Eroton Debt Facility (details of which were
announced on 8 July 2022) is unlikely to be completed whilst the legal action
is ongoing but the Company understands that the documentation is in final form
and, consequently, expects that completion could follow relatively shortly
thereafter.

 

The Proposed MLPL Reorganisation was previously expected to be concluded by 31
March 2023 but, in light of the above and the pending conclusion of San Leon's
refinancing, San Leon now expects completion of the Proposed Transactions to
be in the second quarter of this year and the long stop dates of the various
underlying agreements, currently set for 31 March 2023, will shortly be
extended by mutual agreement.  Further announcements will be made by the
Company as appropriate.

 

In addition, pending the potential refinancing described above, the Company
has not yet been able to progress the Further ELI Investments.

 

Unless otherwise defined herein, the capitalised defined terms used in this
announcement have the same meaning as those used in the Company's Admission
Document.

Enquiries:

 

 San Leon Energy plc                                   +353 1291 6292
 Oisin Fanning, Chief Executive

 Julian Tedder, Chief Financial Officer
 Allenby Capital Limited                               +44 20 3328 5656

 (Nominated adviser and joint broker to the Company)
 Nick Naylor

 Alex Brearley

 Vivek Bhardwaj
 Panmure Gordon & Co                                   +44 20 7886 2500

 (Joint broker to the Company)
 James Sinclair-Ford

 John Prior
 Tavistock                                             +44 20 7920 3150

 (Financial Public Relations)
 Nick Elwes

 Simon Hudson
 Plunkett Public Relations                             +353 1 230 3781
 Sharon Plunkett

 

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