San Leon Regulatory News (SLE)

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information for the purposes of Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the publication of this announcement, this information is now considered to be in the public domain.

24 June 2021

San Leon Energy plc

("San Leon" or the "Company")

Statement re proposed transactions and suspension of trading on AIM

San Leon, the independent oil and gas production, development and exploration company focused on Nigeria, notes the recent price movement of its shares and press comment in Nigeria regarding the possibility of Midwestern Oil and Gas Company Limited ("Midwestern") reversing into the Company.

San Leon confirms that the Company is in preliminary discussions with Midwestern about acquiring Midwestern's indirect interest in the OML 18 oil and gas block located onshore in Nigeria ("OML 18"). At this stage heads of terms for such a transaction have not been agreed. Any transaction would involve San Leon acquiring the outstanding shares not already owned by San Leon in relation to Midwestern Leon Petroleum Limited ("MLPL"). San Leon is not contemplating acquiring Midwestern.

In addition, and connected to any acquisition of MLPL, the Company is considering making further debt and equity investments in Energy Link Infrastructure (Malta) Limited ("ELI") in addition to the conditional investment in ELI announced this morning.

The acquisition by San Leon of the outstanding shares in MLPL not already owned by San Leon would constitute a reverse takeover under rule 14 of the AIM Rules for Companies (the "AIM Rules").

MLPL is part of the structure through which San Leon holds its current 10.58% indirect economic interest in OML 18. San Leon currently has a 40% equity interest in MLPL. MLPL has a 100% equity investment in Martwestern Energy Limited ("Martwestern"), which in turn has a 98% economic interest in Eroton Exploration and Production Company Limited ("Eroton"), which holds a 27% working interest in OML 18 and is its operator.

San Leon and Midwestern are in discussions for the Company to acquire the remaining 60% equity interest in MLPL from Midwestern. The consideration for this, and other matters, would be satisfied by the issuance of a substantial number of new ordinary shares in San Leon to Midwestern, such that Midwestern would become the majority shareholder of San Leon.

MLPL's most recent unaudited accounts for the year to 31 December 2020 state that the company made a loss before tax of approximately US$93.8 million and showed total assets of US$408.5 million.

The proposed transactions described above are at an early stage and will therefore be subject to a number of factors, including, inter alia, the completion of due diligence, negotiation of transaction documentation, regulatory approvals, a "whitewash" under the Irish Takeover Code and shareholder approval. As such, there is no certainty that these transactions will proceed nor any certainty regarding the terms on which they would proceed.

Midwestern currently holds more than 10% of the Company's ordinary shares. Accordingly, Midwestern is classified as a related party under the AIM Rules and the transactions above in which Midwestern has an interest will therefore be treated as transactions with a related party pursuant to rule 13 of the AIM Rules.

Suspension of trading

As the acquisition by San Leon of the outstanding shares in MLPL not already owned by San Leon would constitute a reverse takeover under rule 14 of the AIM Rules, this will be subject, inter alia, to the approval of San Leon's shareholders. As such, a further announcement including, inter alia, full details of the transactions described above will be issued at the appropriate time once binding contracts are entered into and an AIM admission document is published and sent to San Leon's shareholders with a notice of general meeting.

In accordance with rule 14 of the AIM Rules, the Company's ordinary shares have been suspended from trading on AIM with effect from 9:45am today. The Company's ordinary shares will remain suspended until such time as either an AIM admission document is published or an announcement is released confirming that the reverse takeover in contemplation is not proceeding.

The Company will release further announcements as and when appropriate.

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