SLE.L Regulatory News (SLE)

26 November 2013

San Leon Energy Plc

("San Leon" or the "Company")

Alpay Energi Update

San Leon is pleased to note today's announcement by Niche Group plc, the holder of a 5% interest in Alpay Energi AS ("Alpay"), that it is now fully funded in relation to the proposed work programme on the Alpay assets in Turkey. San Leon recently signed a sale and purchase agreement to acquire a 75% interest in Alpay, as disclosed in September this year.

A copy of the Niche Group announcement is set out below:

The Niche Group plc

("Niche" or "the Company")

Shareholders back £1 million equity issue

Niche Group, the energy investment company, is pleased to announce that, further to the announcement of 8 November 2013, it has raised £1 million equity funding from existing shareholders and directors of the Company through the issue of 100 million ordinary shares at 1 pence each; enabling it to retain its 5% share in Alpay Enerji AS ("Alpay").

Alpay is a Turkish oil and gas company with seven conventional onshore licenses and an additional nine licenses in the process of being acquired, making it one of the largest private holders of acreage in the country. San Leon Energy plc ("San Leon") recently acquired a 75% interest in Alpay, with the stated intention of increasing oil and gas production from the Alpay assets by the end of the first quarter of 2014 and thereby achieving targeted gross monthly revenues of approximately $3 million.

San Leon had offered to acquire part of Niche's holding in Alpay, as disclosed on 8 November. However, the Board believes that the ability to participate in the potential annual revenue stream of $36 million (based on San Leon's public comments) plus the potential exploration upside from 440 billion cubic feet of proven, probable, possible and contingent resources from Alpay's existing licences is likely to generate a greater return to shareholders.

As a shareholder in Alpay, Niche is required to contribute its share of an estimated $18.5 million work programme planned by San Leon and fund its share of the operating and administrative costs of Alpay and Niche's short term working capital requirements. The proceeds of the funding announced today will enable Niche to meet these contributions and provide additional working capital. Shareholders who participated in the subscription will also receive warrants to subscribe for further shares at 1p per share, on the basis of one warrant for every one share subscribed for.

Donal Boylan, Chairman, said: "We are delighted that a group of blue‐chip institutions have backed the Board's vision with a significant participation in this fund raising. It means that Niche will retain a stake in the highly promising but underdeveloped Turkish oil and gas sector, providing its shareholders with the opportunity of significant near term upside from higher production as well as from potential new finds in the future.

"We look forward to our new relationship with San Leon who the Niche board believe have the technical and financial resources to realize value from the underlying licences in Alpay for the benefit of all its shareholders including investors in Niche.

"With the Company's balance sheet strengthened, and an investment in a potential revenue producing asset, the Board believes that the Company now has a strong platform to develop a long term growth strategy, with the first step likely to be a return to AIM in early 2014."