LONDON (Alliance News) - San Leon Energy PLC on Tuesday said it had taken a further step towards completing its acquisition of an indirect interest in a producing oilfield in Nigeria.
San Leon signed an agreement in January to secure a 9.72% indirect economic interest in OML 18, an onshore field that is already producing oil and formerly operated by oil major Royal Dutch Shell PLC.
The OML 18 production arrangement is structured in three parts, of which the initial stage was completed in March, when San Leon finalised its purchase of Mart Resources Inc.
Mart Resources held a stake in the Midwestern Leon Petroleum Ltd, a special purpose vehicle which is a major shareholder in the operator of OML 18.
In order to complete the subsequent parts of the arrangements, Midwestern Leon Petroleum was required to raise USD100.0 million which was intended to be structured as secure notes issued by Midwestern Leon.
On Tuesday, San Leon said a further USD30.0 million, structured as loan notes, has now been provided by funds managed by San Leon shareholder Toscafund Asset Management LLP, to which San Leon's shares in Midwestern Leon remain pledged pending San Leon shareholder and regulatory approvals.
San Leon added that Midwestern Leon has, through a buyback of its own shares, completed the second step of the production arrangement, and Midwestern Oil now holds 70.43% of Midwestern Leon, whilst San Leon holds 29.57%.
This means that San Leon currently holds a 5.75% interest in the OML 18 site.
On completion of the third and final step, when San Leon will hold the 9.72% interest, San Leon will have a 40% interest in Midwestern Leon, while Midwestern Oil will have 60%.
San Leon shares have been suspended since early 2016.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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San Leon (SLE)