• Thursday, March 28, 2024
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San Leon give details of $40m received for OML 18 development

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London Stock Exchange (LSE) listed San Leon Energy has provided inside details concerning funds its expects for development of Oil Mining License (OML) 18 including the newly received $40 million while changing the terms of its lending notes agreement with Midwestern Leon Petroleum.

Nigeria focused oil company San Leon said it had received a loan notes payment of $40m further boasting the company is in a “very strong position armed with such significant cash.”

“San Leon has around $100 million of additional Loan Notes and interest receipts expected by the end of next year, as well as income from the provision of our technical services to Eroton as operator of OML 18,” San Leon’s Chief Executive Officer Oisin Fanning said in a statement.

OML 18 is located in Rivers State and hosts the Akaso, Asaritoru, Awoba, Bille, Buguma Creek, Krakama, Orubiri, Cawthorne Channel and Alakiri fields.

Fanning noted that  San Leon expects to receive dividends from its indirect shareholding in Eroton in due course as it looks forward with confidence to updating shareholders on the Company’s growth and progress.

Sources said an alternative crude oil evacuation and storage system is being installed on OML 18, with a link running to a Floating Storage and Offloading (FSO) vessel, named ELI Akaso. The pipeline is due to be completed, and ACOES commissioned, in May.

Incorporated in August 2013, and began full operations in 2015, Eroton E&P won the bid for the 45 percent total interest in OML 18, previously held by the Shell Petroleum Development Company, Total E&P Nigeria Limited, and Nigerian Agip Oil Company Limited which was then producing 10,000 barrels per day (bpd) but later improved to 65,000bpd after Eroton took over.

San Leon also announces that it has entered into an agreement dated 6 April 2020 amending the Loan Notes Instrument (the “Amendment”) between the company and Midwestern Leon Petroleum Limited.

Midwestern Oil & Gas is the guarantor of the loan notes. Midwestern also has a 13.18percent stake in San Leon and a 60percent stake in Midwestern Leon Petroleum.

Under the new agreement, San Leon is owed $82million, with another payment of $10million due by October 6 this year. The rest of the loan is due to be paid off in three quarterly payments, starting on July 2021 and being completed by December 2021.

“The Directors consider, having consulted with the Company’s nominated adviser, Cantor Fitzgerald Europe, that the terms of the Amendment are fair and reasonable insofar as the Company’s shareholders are concerned,” San Leon said in a statement.

San Leon admitted it has received just over $190million in payments from its loan, with around $74million held in cash as of April 7. It has no debt. The loan notes were originally worth $175.5milion. The loan notes have an interest rate of 17percent per year.