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(Alliance News) - San Leon Energy PLC on Wednesday said it is "optimistic" about ongoing refinancing discussions and the potential sale of a Nigerian oil field, and is "confident" that it still can repay all creditors once refinancing concludes.
San Leon, a Dublin-headquartered oil and gas company focused on Nigeria, has been in discussions for almost 12 months about securing an alternative USD50 million loan facility. The funding would be applied towards proposed transactions with Midwestern Oil & Gas Company Ltd, announced on July 8, 2022, and towards satisfying working capital requirements for further conditional investments in Energy Link Infrastructure Ltd.
San Leon reiterated its claim from March 24 that the proposed refinancing discussions have not progressed as quickly as anticipated. It said it is still unable to access the alternative loan facility funding, although "discussions are now at a very advanced stage".
However San Leon said it made "significant progress" in recent weeks and expects discussions to successfully conclude in due course.
In light of the delays, San Leon believes it will be unable to publish its 2022 accounts before June 30. Consequently its shares are expected to be suspended from trading on AIM, effective July 3.
On Wednesday, meanwhile, San Leon's shares were down 27% at 16.41 pence in London.
"I recognise that shareholders will be disappointed with the delays to our refinancing and publication of accounts," said Chief Executive Officer Oisin Fanning. "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...is looking exciting."
San Leon currently has about USD10.5 million of unpaid creditors, including directors, employees and tax authorities. It said there is "understandably some pressure" from said creditors for settlement. San Leon said it is "confident" that all creditors will be settled in full once refinancing is successfully concluded.
San Leon also said the spread mooring of the floating storage and offloading vessel for ELI, announced on April 3, now has been completed. ELI is currently renewing the administrative regulatory permits needed to commence full terminal operations, which should in time allow it to repay San Leon's investment and loans.
Finally, San Leon said negotiations are ongoing for the proposed sale of its USD5.6 million non-core investment in the Oza oil field in Nigeria. It said the prospective buyer's own funding was taking longer than expected to conclude.
By Emma Curzon, Alliance News reporter
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