LONDON (Alliance News) - San Leon Energy PLC on Friday said shareholders of Mart Resources have approved the proposed acquisition of Mart by San Leon.
The proposed acquisition is being facilitated through a plan of arrangement, which was approved by Mart shareholders on Thursday, with 91% of the votes cast supporting the deal, well ahead of the 65% threshold needed.
Mart Resources did not provide any further guidance regarding the deal, with San Leon releasing its own statement Friday noting the press release.
Back in January, San Leon revealed a deal that will see it acquire Canada's Mart, an exploration and production company, for USD62.6 million. San Leon has previously faced minor delays in paying that consideration into an escrow account, as per the terms of the deal, but has now secured the necessary funding.
Earlier this week, San Leon secured funds from its investors totalling CAD89.26 million, plus an additional USD4.5 million in transaction costs.
San Leon was supposed to transfer the consideration for Mart Resources into an escrow account by February 17, but then extended that by one week before securing another extension later in the month to the beginning of March.
On Wednesday, San Leon said that it has provided Mart with confirmation from its investors that they will fund the agreed escrow account by March 8, and has agreed a further extension to the funding timing with Mart to facilitate this.
The result of the acquisition, together with a restructuring, is that San Leon will secure a 9.72% indirect economic interest in the OML 18 block, onshore Nigeria. San Leon will have no other assets or liabilities resulting from the transaction outside of the OML 18 block.
Martwestern Energy Ltd, a Nigerian holding company which is a major shareholder in the operator of OML 18, is owned by Mart Resources, together with Midwestern Oil & Gas Ltd and SunTrust Oil Co Ltd, both Nigerian companies.
In a restructuring deal between Midwestern and San Leon, which will include the acquisition of SunTrust's 20% stake in Martwestern, Midwestern will assume the assets and liabilities of Mart not connected to OML 18.
San Leon is then paying a further USD117.4 million in transaction costs to acquire SunTrust's stake and restructuring, as well as transaction fees.
Gross OML 18 block production was 31,600 barrels of oil per day in September 2015, with a production ramp-up plan proceeding. A significant portion of the production is covered by a hedge at USD95.0 per barrel until December 2017.
San Leon Energy shares are currently suspended from trading in London.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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San Leon (SLE)