San Leon Regulatory News (SLE)

The information communicated within this announcement is deemed to constitute inside information for the purposes of Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

8 July 2022

San Leon Energy plc

("San Leon" or the "Company")

Proposed Midwestern Reorganisation and proposed Further ELI Investments

San Leon, the independent oil and gas production, development and exploration company focused on Nigeria, is pleased to announce that it has entered into a series of agreements with Midwestern Oil & Gas Company Limited ("Midwestern") to consolidate Midwestern's holdings in San Leon, Midwestern Leon Petroleum Limited ("MLPL") and Energy Link Infrastructure (Malta) Limited ("ELI") into a single holding in San Leon (together the "Proposed Midwestern Reorganisation"). In addition, San Leon announces further conditional investments in ELI (together the "Further ELI Investments"). Taken together the Proposed Midwestern Reorganisation and Further ELI Investments are collectively referred to as the "Proposed Transactions".

Together the Proposed Transactions constitute a reverse takeover pursuant to rule 14 of the AIM Rules for Companies. Accordingly, San Leon expects to publish an AIM Admission Document (the "Admission Document" or "Document"), containing an updated CPR on OML 18, later today. The Admission Document will provide information on the Proposed Transactions and include notice of a General Meeting to seek Shareholder approval for the Proposed Transactions and certain resolutions. The General Meeting will be convened for 5 August 2022 at 11.30am at the Herbert Park Hotel, Ballsbridge, Dublin 4, Ireland.

Extracts from the Admission Document and the definitions used in the Admission Document are set out in the Schedules and appendix to this Announcement.

Highlights

Series of transformational conditional transactions entered into by San Leon today to increase its exposure to OML 18 and the related infrastructure. 

· Completion of the Proposed Transactions will consolidate and simplify the group structure: 

o  San Leon's exposure to the world class OML 18 asset increases fourfold to a 44.1% initial indirect economic interest; and

o  the Proposed Transactions will increase San Leon's ownership of ELI to c.50%. ELI is progressing the ACOES pipeline project to provide a dedicated oil export route for OML 18, with the potential for third party fees.

· CPR on OML 18 issued today with 2P reserves of 323 mmboe net attributable to San Leon with an economic NPV10 value of US$1.1 billion (recent consensus long-term oil price and assuming completion of the Proposed Transactions);

· The Company has today entered into a US$50m loan facility with MM Capital to provide funding to San Leon; and

· Further Loan Note Waiver granted to Midwestern to allow for the completion of the Proposed Transactions.

San Leon is proposing a capital restructuring and issue of preference shares to San Leon Shareholders immediately prior to completion with the preference shareholders having a preferential right to the first US$40m of future dividends paid by San Leon.

In addition Eroton, the operator of OML 18, is seeking to undertake a series of transactions to increase its interests in OML 18 and increase its funding facilities. Completion of these transactions (which are yet to be entered into) will be a condition of the Proposed Transactions.

Oisin Fanning, CEO of San Leon, commented:

"We are delighted to have entered into these agreements to effect the Proposed Transactions. We believe that this series of transactions, when completed, will be truly transformational for the Company and will deliver value to our shareholders. The transactions will not only increase our initial indirect economic interest in OML 18, a world class asset with unrealised potential, but also our interest in ELI and the new ACOES pipeline which we have long considered to be critical to the future success of OML 18 through the expected reduction of pipeline losses and increase in the uptime for export that it is expected to provide.

"Going forward these transactions will pave the way for the Company to deliver its strategy of becoming a significant participant in the Nigerian oil and gas market, positioning San Leon to take advantage of further transactional opportunities to enhance and grow our business."

Overview of the Proposed Transactions (including the transactions Eroton is seeking to undertake)

Midwestern Reorganisation

On completion of the Proposed Midwestern Reorganisation (which is expected to occur in Q4 2022 following the Eroton OML 18 Transactions) San Leon will own a 44.1% initial indirect economic interest in OML 18 with the remaining 55% interest being held by NNPC (the Nigerian State-owned oil company) and 0.9% by Bilton. The Further ELI Investments will result in San Leon owning on completion a c.50% interest in ELI (which is the owner of the ACOES which will be utilised by OML18) and San Leon becoming a significant holder of loan receivables from ELI.

The Proposed Midwestern Reorganisation is conditional, inter alia, on the completion of the Eroton OML 18 Transactions and regulatory approvals and includes the MLPL Reorganisation, the ELI Reorganisation and the entry into certain associated documentation (summaries of which are set out below). Further details of these transactions and agreements are summarised in Schedule 1 and Schedule 2 to this Announcement.

The Eroton OML 18 Transactions

Eroton, the operator of the OML 18 licence, currently holds a 27% effective economic interest in the OML 18 licence. Eroton has negotiated an agreement with Sahara pursuant to which, when executed, it will conditionally agree to acquire additional interests in OML 18 through the Sahara OML 18 Transaction and the Bilton OML 18 Transaction which has been entered into today. These Eroton OML 18 Transactions will result in the acquisition of Sahara's and Bilton's effective economic interests in OML 18 of 16.2% and 1.8% respectively. The MLPL Reorganisation and the ELI Reorganisation are conditional, inter alia, upon completion of the Eroton OML 18 Transactions.

In order to fund the Sahara OML 18 Transaction and Bilton OML 18 Transaction, Eroton proposes to enter into the New Eroton Debt Facilities which represent senior secured reserve-based lending facilities totaling US$750 million to be provided to Eroton by a lending consortium led by Afreximbank for the purposes of, inter alia: (i) facilitating the Eroton OML 18 Transactions; and (ii) the repayment of Eroton's existing financing. A credit committee approved term sheet associated with the New Eroton Debt Facilities has been received from the lead lender, Afreximbank, and further information is set out in the Schedule to this Announcement. The New Eroton Debt Facilities are conditional, amongst other things, upon definitive documentation in respect of the facility and associated security package being entered into. Subject to completion of the New Eroton Debt Facilities, the New Eroton Debt Facilities will replace the Existing Eroton Debt Facility, which will be repaid in full and GTB's security in connection with the Existing Eroton Debt Facility will be discharged.

The MLPL Reorganisation

By virtue of the MLPL Reorganisation, Midwestern will subscribe for shares in San Leon and San Leon will acquire from Midwestern the remaining 60% equity interest in MLPL that it does not currently own.

The MLPL Reorganisation will be conditional on, along with the other conditions summarised in the Schedule, the completion of the Eroton OML 18 Transactions and will be implemented immediately prior to Re-Admission by completion of the following steps:

· the issue of 344,334,257 New Ordinary Shares by San Leon to Midwestern pursuant to the MLPL New Shares Subscription Agreement with such subscription consideration being paid for by way of the MLPL Reorganisation Loan Notes; and

· the transfer by Midwestern of its equity interest in MLPL and the benefit of the MLPL Receivable to a member of the San Leon Group in return for the cancellation of the MLPL Loan Notes and the release of Midwestern from its guarantee in relation the MLPL Loan Notes.

The ELI Reorganisation

San Leon and Midwestern propose to effect a further reorganisation to consolidate Midwestern's holdings in the Company and ELI into a single holding in the Company, with the Company holding an additional c.14% interest in ELI.

The ELI Reorganisation, which is conditional (amongst other things) upon ELI Shareholder Consent and completion of the MLPL Reorganisation, is made up of the following constituent parts:

· the issue of 73,782,535 New Ordinary Shares pursuant to the ELI New Shares Subscription Agreement with such amount being left outstanding between San Leon and for the benefit of the Company;

· the transfer by Midwestern of its 13.77% equity interest in ELI Malta to San Leon ELI; and

· the transfer by Midwestern of its associated loan receivable of US$15,300,000 from ELI Malta to San Leon ELI.

The Further ELI Investments

San Leon currently holds 38,998 ELI Shares representing a 10% equity interest in ELI. As part of the ELI Reorganisation, San Leon will acquire an additional 53,700 ELI Shares, being Midwestern's indirect 13.77% equity interest in ELI. The Company also currently has a conditional interest in 12,959 ELI Shares representing a 3.323% equity interest in ELI as a result of a series of transactions announced on 24 June 2021 and 12 February 2022, details of which are contained in the Schedule.

San Leon has also today conditionally agreed to make a new loan to ELI of US$16,000,000 at a coupon of 14% per annum over four years, and repayable quarterly following a one-year moratorium, which will be accompanied by San Leon subscribing for a further 48,748 new ELI Shares at nominal value, subject to ELI Shareholder Consent.

San Leon has also today entered into an agreement for the further conditional purchase of 52 ,647 ELI Shares currently held by Ocean Pearl for US$15,000,000.

Upon completion of both the ELI Reorganisation and all of the Further ELI Investments, San Leon would become the largest shareholder in ELI, with its stake rising to 228,458 ELI Shares representing 50.64% and will be a significant lender to ELI, holding a total of US$48.3 million of loans (plus accrued interest) to ELI. The Further ELI Investments are not conditional upon the ELI Reorganisation or the MLPL Reorganisation but are all conditional upon shareholder approval as well as the conditions referred to in the Schedule.

The New Facility

The Company is also pleased to announce that it has today entered into a loan facility agreement with MM Capital Holding Limited (as lender) (the "New Facility") pursuant to which the lender has agreed to provide a US$50 million secured loan facility to San Leon. The Company has entered into the New Facility with the purposes of funding its working capital requirements and financing the Further ELI Investments and has agreed to grant a charge over SLE Financing as security for the loan.

Issue of Preference Shares

As part of the Proposed Transactions, subject to and upon completion of the MLPL Reorganisation, Midwestern will be released from its obligations to guarantee performance of the MLPL Loan Notes. In recognition of this and the associated positive cash inflows anticipated from the increased initial indirect economic interest in OML 18, immediately prior to Re-Admission, the Company will, subject to shareholder approval at the EGM, issue the Preference Shares to Shareholders on the Company's register of members immediately prior to Re-Admission as part of the Subdivision entitling the holders to receive the Preference Amount which is US$40,000,000.

Competent Person's Report

San Leon commissioned PetroVision Energy Services Ltd to act as San Leon's Competent Person as defined by the rules of the London Stock Exchange and to prepare an independent competent person's report to assist in the assessment of the Proposed Transactions. The OML 18 development plan comprises CAPEX costs around new wells, existing active wells, workovers (re-entries, recompletion and/or side-tracks) and facilities estimated at $151 million for NFA, $3,414 million for 1P and 2P reserves and $3,714 million for 3P reserves, further details of which are available in the Schedule.

Reasons for the Proposed Transactions

San Leon is committed to the long-term development of its Nigerian assets, with a focus of delivering value to Shareholders. This is driven by its technical expertise and operational capabilities.

It is the Board's belief that the Proposed Transactions, are expected to have the following benefits for the Company and its Shareholders:

· the consolidation of Midwestern's holdings in the Company and MLPL into a single holding in the Company which, in conjunction with the Eroton OML 18 Transactions, allows the Company to increase its economic exposure to OML 18;

· increasing the Company's economic interests in ELI will complement the Company's proposed 100% interest in MLPL, as the ACOES is being constructed to provide a dedicated oil export route from OML 18 and therefore for the benefit of MLPL, including the expected reduction of pipeline losses and increasing the uptime for export;

· San Leon's larger presence by virtue of its activities, resources and commitments, will pave the way for the Company to become a significant participant in the Nigerian oil and gas market, thereby better positioning the Company to deliver value for shareholders; and

· increasing the Company's technical and management involvement in the OML 18 asset, serving to help optimise the development of the asset. This has been formalised through an Asset Management Agreement.

Each of these benefits is expected to contribute to the Company's main objectives which are to:

· use the Company's interest in OML 18 as a platform to become a leading independent production and exploration company focused on Nigeria and West Africa by securing and developing further high potential asset opportunities that yield value for shareholders;

· use the Company's technical and operational expertise in securing production and near-term operating cash flow which will yield value to shareholders whilst continuing to forge close links with governments, partners and the local communities that it operates in; and

· continue to position the Company for further transactions.

The MLPL Reorganisation and ELI Reorganisation, together with the Further ELI Investments, are considered by the Directors to represent transformational transactions for the Company. The Board appreciates that Eroton and OML 18 currently face a number of challenges, several of which are intended to be overcome via the refinancing of the Existing Eroton Debt Facility by the New Eroton Debt Facilities, the completion of the Eroton OML 18 Transactions and the associated Settlement Agreement and the ACOES coming into full operation. Further details of these key challenges can be found in paragraphs 4(b), (c) and (d) of Part 1 below.

It is emphasised that the MLPL Reorganisation is conditional, amongst other things, on the entry into and the utilisation of the New Eroton Debt Facilities and the Eroton OML 18 Transactions completing and whilst the Terms of the New Eroton Debt Facilities have been approved by the lead lender, Afreximbank, and the terms of the Sahara OML 18 Acquisition Agreement have been negotiated and the Bilton OML 18 Acquisition Agreement has been executed, subject to certain conditions, they are dependent on, inter alia, the New Eroton Debt Facilities being entered into and becoming unconditional and being utilised. Furthermore, the New Eroton Debt Facilities have not yet been entered into and once entered into will be subject to additional conditions to drawdown which will have to be satisfied prior to utilisation of the facilities and for completion of the Sahara OML 18 Transaction and the Bilton OML 18 Transaction. These matters are not under the Company's control. Accordingly, there is no certainty that the New Eroton Debt Facilities will be entered into or that the Eroton OML 18 Transactions will proceed or that any of them will proceed on the currently proposed terms. Only once the Eroton OML 18 Transactions complete and the other conditions to the MLPL Reorganisation have been satisfied will the Company be able to proceed with the MLPL Reorganisation. There can therefore be no guarantee that the MLPL Reorganisation will occur.

The Sahara OML 18 Acquisition Agreement has not been executed at this point and is only expected to be executed once Eroton has funds available to it to satisfy the consideration under the New Eroton Debt Facilities. Accordingly, whilst the terms have been negotiated, there can be no certainty that it will be entered into or the terms on which it will be entered into.

Whilst the Bilton OML 18 Acquisition Agreement has been executed, it is also conditional upon the Sahara OML 18 Acquisition Agreement being entered into completing following the New Eroton Debt Facilities proceeding. Accordingly as there can be no certainty that the Sahara OML 18 Acquisition Agreement will be entered into or the terms on which it will be entered into and there is no certainty that this condition will be satisfied.

The Sahara OML 18 Acquisition Agreement, if executed, will be and the Bilton OML 18 Acquisition Agreement is subject to certain conditions before completion can occur. In particular, the Sahara OML 18 Acquisition Agreement, if executed will be, and the Bilton OML 18 Acquisition Agreement is conditional on the entry into the Settlement Agreement associated with certain litigation between Eroton, Bilton and Sahara.

The number of shares in the Company to be subscribed for by Midwestern as part of the MLPL Reorganisation has been agreed and fixed between Midwestern and the Company and is not subject to adjustment by reference to the market price of the Ordinary Shares or New Ordinary Shares. Accordingly, in order for the MLPL Reorganisation to proceed the market price of the New Ordinary Shares on the date of allotment of the MLPL New Shares must be not greater than the value per share shown recorded in the MLPL Valuation Report.

The Board are of the view that the Eroton OML 18 Transactions and New Eroton Debt Facilities are important for several reasons, including:

(i) the Eroton OML 18 Transactions underpin the valuation and rationale of the MLPL Reorganisation by delivering, indirectly, to San Leon a far greater interest in OML 18 than is currently held by Eroton;

(ii) the Sahara OML 18 Transaction resolves a series of disputes that have arisen between Eroton and its OML 18 joint venture partner, Sahara. Several of these disputes have developed into the Eroton Litigation, although none are currently being actively pursued, and all legal actions between Eroton and Sahara will be extinguished as part of the Sahara OML 18 Transaction via the Settlement Agreement, thereby enabling Eroton to focus on the commercial development of OML 18 as a world class oil and gas field; and

(iii) the New Eroton Debt Facilities are a condition to and are necessary to fund the Eroton OML 18 Transactions and also enable the Existing Eroton Debt Facility to be refinanced.

If the New Eroton Debt Facilities are not entered into or once entered into does not complete or the conditions to drawdown are not satisfied and/or the Eroton OML 18 Transactions do not complete then the MLPL Reorganisation cannot complete. The New Eroton Debt Facilities and the Eroton OML 18 Transactions are not in the Company's control and even if shareholders approve the Resolutions, they may not occur. In any of these cases San Leon would retain a 40% equity interest in MLPL with Midwestern continuing to own the remaining interest in MLPL and Eroton would retain a 27% economic interest in OML 18, meaning that San Leon would continue to have a 10.58% initial indirect economic interest in OML 18. The outstanding MLPL Loan Notes would become payable by MLPL (or by Midwestern as guarantor to the MLPL Loan Notes) to San Leon within 90 days of termination of the MLPL Reorganisation Agreement.

The New Eroton Debt Facilities and the Eroton OML 18 Transactions are also important to the future financial condition of Eroton, and given the Company's significant focus on OML 18 and its operator Eroton, the failure of the New Eroton Debt Facilities and the Sahara OML 18 Transaction to complete, could have a material and adverse effect on Eroton, with a consequent adverse effect on Company's business, financial condition and results.

The Directors have prepared a detailed cash flow forecast for the Group for the period from 1 June 2022 to 31 December 2023.The principal assumptions underlying the cash flow forecast and the availability of finance to the Group are as follows:

(i) the Proposed Transactions complete in the second half of 2022. The Proposed Transactions comprises, inter alia, a proposed consolidation of Midwestern's indirect debt and equity interests in ELI Malta with those of the Company, as well as further new debt and new and existing equity investments to be made by San Leon pursuant to the Further ELI Investments;

(ii) Eroton acquires an additional 18% interest in OML 18 from two of the other partners in OML 18, thereby taking Eroton's interest in OML 18 to 45%. This is subject, inter alia, to: i) agreeing documentation; ii) finalising bank financing; and iii) receiving the relevant regulatory consents in Nigeria;

(iii) the New Facility of $50 million has been secured to finance the Proposed Transactions;

(iv) elimination of the MLPL Loan Notes on completion of the Proposed Transactions;

(v) under the Asset Management Agreement with Eroton, San Leon receives $500,000 per month for technical and financial advisory services following completion of the Proposed Transactions;

(vi) repayments from ELI of loan notes of US$37.6 million during 2022 and 2023;

(vii) repayment from Eroton under the Master Services Agreement, of $3m during 2022; and

(viii) a further loan of $2.5 million is given to Decklar in relation to its Oza investment pursuant to current discussions.

Due to the Proposed Transactions not having completed at the date of the Document there is an inherent material uncertainty that completion will not occur as anticipated.

The Group has modelled various other scenarios assuming the Proposed Transactions do not complete and given the Group's well understood cost base, the principal uncertainty if the Proposed Transactions do not complete relates to the quantum and timing of receipt of interest and capital repayments on the MLPL Loan, which would remain in place, and the loan Notes with ELI.

It was originally envisaged that the MLPL Loan Note payments due to the Group would be sourced by MLPL from the receipt of dividends through its indirect interest in Eroton via Martwestern. These dividends have not been received to date and consequently MLPL has entered into loan arrangements in order to be able to make Loan Note payments to the Company. In the absence of the dividend payments, MLPL will be reliant on further advances under the loan arrangement and in turn being able to make Loan Note payments to the Company. The Company has no obligation arising from the loan arrangements entered into by MLPL.

The loan repayments due from ELI were due to start in 2021 but have been delayed due to operational readiness of the FSO and ACOES project being delayed. The Directors have a reasonable expectation that ELI will be revenue generating imminently with the commencement of barging operations, and while loan repayments have been delayed, they should commence in the second half of 2022.

Due to the uncertainty on timing of future cashflows the MLPL Loan Notes and ELI loan notes have both been credit impaired in the annual report and accounts of the Company for the year ended 31 December 2021.

In the ultimate downside scenario where no repayments are received from MLPL and ELI, the New Facility can be drawn by the Company to facilitate completion of the Further ELI Investments, with the remaining balance being used for general corporate purposes. In this scenario the working capital requirements of the Group can be met for the 12-month period from the date of approval of the financial statements, although a reduction to administrative costs is required in 2023, which the Directors believe is achievable and within their control.

However, while the working capital requirements of the Group can be met for the 12- month period, the Directors believe that the continued viability of the Group and Company into the future is dependent on the completion of the Proposed Transaction. As such, the completion of the Proposed Transactions creates significant uncertainty upon the Group and Company's ability to continue as a going concern beyond the 12-month period. The Directors' have concluded that this represents a material uncertainty which may cast significant doubt upon the Group and Company's ability to continue as a going concern and that, therefore, the Group and Company may be unable to continue realising its assets and discharging its liabilities in the normal course of business.

Financial information on MLPL and ELI

For the 12 month period ended 31 December 2021, MLPL recorded an audited profit before income tax of US$47,001,000 and at that date had audited total assets of approximately US$558,807,000. Historical financial information of MLPL can be found in Part 8B of the Admission Document.

For the 12 month period ended 31 December 2021, ELI recorded an audited loss before income tax of US$10,494,402 and at that date had audited total assets of approximately US$226,958,434. Historical financial information of ELI can be found in Part 8C of the Admission Document.

Related party transactions under the AIM Rules

Midwestern is a related party of the Company for the purposes of the AIM Rules for Companies by virtue of Midwestern holding more than 10% of the Existing Ordinary Shares in the Company and the level of Midwestern's current interest in MLPL. The MLPL Reorganisation, and the ELI Reorganisation, are therefore related party transactions under the AIM Rules for Companies. The Directors of San Leon (excluding Adekolapo Ademola who is not considered to be independent as he is a representative of Midwestern on the Company's board) consider, having consulted with the Company's nominated adviser, Allenby Capital, that the terms of the MLPL Reorganisation, and the ELI Reorganisation are fair and reasonable insofar as the Company's shareholders are concerned.

Following publication of this Document, the Company proposes to grant awards pursuant to the LTIP over 18,938,209 Ordinary Shares (representing 2.18 per cent. of the Fully Enlarged Ordinary Share Capital) to certain of its employees and the Board, details of which are set out in paragraph 6.2.16 of Part 12 of this Document. The issuance of these awards to the Directors will be considered to be a related party transaction under Rule 13 of the AIM Rules for Companies and the Company will announce further details in relation to this separately in due course once the issuance of these awards has occurred.

Unless otherwise defined herein, the capitalised defined terms used in this announcement have the same meaning as those used in the Schedule.

The Company expects to publish the Admission Document later today.

Enquiries:

Schedule

Extracts from the AIM Admission Document Expected to be published later today

PART 1 OF THE ADMISSION DOCUMENT

LETTER FROM THE CHAIRMAN

Dear Shareholder,

Proposed Midwestern Reorganisation comprising the MLPL Reorganisation and the ELI Reorganisation

Proposed Further ELI Investments

Adoption of New Memorandum and Articles of Association

Proposed subdivision of the Existing Ordinary Shares into New Ordinary Shares and Preference Shares

Re-Admission of the New Ordinary Shares to trading on AIM following completion of the MLPL Reorganisation and satisfaction of conditions precedent

and

Notice of Extraordinary General Meeting

1. Introduction

San Leon currently has a 40% equity interest in MLPL with the remaining interest in MLPL being owned by Midwestern. MLPL is part of the structure through which San Leon holds its current 10.58% initial indirect economic interest in OML 18, a producing oilfield located in the southern part of the Niger Delta, of which further details are outlined in paragraph 4 below. MLPL has a 100% equity investment in Martwestern, which in turn owns a 98% economic interest in Eroton, which currently holds a 27% working interest in OML 18 and is its operator.

San Leon also currently has a 10% equity interest in ELI Malta and a conditional further 3.323% equity interest in ELI Malta as a result of a series of transactions, announced on 24 June 2021 and 15 February 2022. San Leon has provided a total of US$17 million of shareholder loans to ELI Malta to date. ELI Malta is the operator and the 100% owner of the ACOES, which includes a pipeline that will provide a dedicated oil export route from OML 18 to an offshore floating storage and offloading (FSO) vessel.

Eroton expects that once the ACOES is commissioned it will reduce the downtime and allocated pipeline losses currently associated with reliance on the existing pipeline, NCTL. In addition, it is anticipated that the FSO vessel project will improve overall well uptime. Accordingly, the Directors consider the ACOES to be important to the future success of OML 18.

Eroton is currently planning to increase its working interest in OML 18 through the Eroton OML 18 Transactions, subject, amongst other things, to the New Eroton Debt Facilities being entered into and utilised. Subject to completion of the Eroton OML 18 Transactions, the Company is seeking to increase its interests in OML 18 and ELI. Following (and subject to) completion of the MLPL Reorganisation, the ELI Reorganisation and the Further ELI Investments, San Leon expects its initial indirect economic interest in OML 18 to have increased from 10.58% to 44.1% and its interest in ELI to increase to up to 50.64%. The ELI Reorganisation is not conditional upon any of the elements of the Further ELI Investments and may proceed whether or not some or all of the Further ELI Investments have completed.

The Company first announced that it was in negotiations for the series of transactions described in this Document on 24 June 2021 and its Existing Ordinary Shares have been suspended from trading on AIM since this date.

Table 1: Summary table of San Leon Energy's material assets

Source: PetroVision Energy Services Limited CPR - Table 1-1 on page 163 of this Document

* Represents SLE working interest after completion of the Eroton OML 18 Transactions and the MLPL Reorganisation at which point SLE will have an initial indirect economic interest of 44.1% in OML 18. Prior to this SLE's working interest in OML 18 as at the date of this Document is 5.4% and SLE's initial indirect economic interest in OML 18 is 10.58%.

**  Awoba field is operated by Newcross E&P, with 50% production allocation to OML 18 concession.

2. The Proposals

On 24 June 2021, San Leon announced that the Company and Midwestern had agreed to enter into a series of transactions, being the MLPL Reorganisation and the ELI Reorganisation, to consolidate Midwestern's holdings in San Leon, MLPL and ELI into a single holding in San Leon. The MLPL Reorganisation, the ELI Reorganisation and the Further ELI Investments constitute a reverse takeover pursuant to rule 14 of the Al M Rules for Companies and therefore the purpose of this Document, which comprises an Admission Document prepared under the AIM Rules for Companies, is to provide you with information on the Proposals and to seek approval by Shareholders of the Resolutions to be proposed at the General Meeting, which is being convened on 5 August 2022 at 11.30 am at the Herbert Park Hotel, Ballsbridge, Dublin 4, Ireland, notice of which is set out at the end of this Document.

Further details of the proposed series of transactions, being the MLPL Reorganisation and the ELI Reorganisation, are set out in Part 2 of this Document.

Subject to and upon completion of the MLPL Reorganisation, Midwestern will be released from its obligations to guarantee performance of the MLPL Loan Notes by MLPL, further details of which are set out in section 6 of this Part 1.

In connection with the proposed series of transactions, the Company will, subject to shareholder approval at the EGM, issue the Preference Shares to Shareholders, further details of which are set out in section 13 of this Part 1.

Taking into account its current 13.18% shareholding in the Company and assuming that no additional shares are issued, Midwestern is expected, upon completion of the MLPL Reorganisation, to hold

50.82% of the Initially Enlarged Ordinary Share Capital and, upon completion of the ELI Reorganisation, this is expected to increase to 55.0% of the Fully Enlarged Ordinary Share Capital.

Eroton is seeking to enter into the New Eroton Debt Facilities and to use part of the New Eroton Debt Facilities to acquire an additional 18% interest in OML 18, thereby taking Eroton's initial indirect economic interest in OML 18 to 45% through the Eroton OML 18 Transactions. Subject to the entry into and utilisation of the New Eroton Debt Facilities and the Eroton OML 18 Transactions occurring, the MLPL Reorganisation will result in San Leon increasing its indirect economic interest in Eroton from 39.2% to 98.0% resulting in San Leon's initial indirect economic interest in OML 18 increasing from the current 10.58% to 44.1%.

It is emphasised that the MLPL Reorganisation is conditional, amongst other things, on the entry into and the utilisation of the New Eroton Debt Facilities and the Eroton OML 18 Transactions completing. Whilst the Terms of the New Eroton Debt Facilities have been approved by the lead lender, Afreximbank, and the Sahara OML 18 Acquisition Agreement has been negotiated but is not expected to be entered into until after the New Eroton Debt Facilities have been entered into and the funds are available and the Bilton OML 18 Acquisition Agreement has been executed, subject to certain conditions, they are dependent on, inter alia, the New Eroton Debt Facilities being entered into and becoming unconditional and being utilised. Furthermore, the New Eroton Debt Facilities have not yet been entered into and once entered into will be subject to additional conditions to drawdown which will have to be satisfied prior to utilisation of the facilities and for the entry into and completion of the Sahara OML 18 Transaction and the Bilton OML 18 Transaction. These matters are not under the Company's control. Accordingly, there is no certainty that the New Eroton Debt Facilities will be entered into or that the Eroton OML 18 Transactions will proceed or that any of them will proceed on the currently proposed terms. Only once the Eroton OML 18 Transactions complete and the other conditions to the MLPL Reorganisation have been satisfied will the Company be able to proceed with the MLPL Reorganisation and Re-Admission. There can therefore be no guarantee that the MLPL Reorganisation and Re-Admission will occur.

THE POTENTIAL EFFECT ON THE COMPANY IN THE EVENT THAT THAT THE EROTON OML 18 TRANSACTIONS, THE MLPL REORGANISATION AND RE-ADMISSION DO NOT OCCUR IS SET OUT IN PARAGRAPH 3.1 OF PART 2 OF THIS DOCUMENT.

Following completion of the Eroton OML 18 Transactions (if the New Eroton Debt Facilities and the Sahara OML 18 Transaction are entered into) and the MLPL Reorganisation, San Leon's initial 44.1% economic interest in OML 18 will be subject to reduction upon meeting the following conditions:

(i) from the date of repayment of the original purchase price* plus accrued interest accrued thereon until 20 million barrels of gross OML 18 production is realised, Bilton's economic interest in Eroton will increase from 2% to 10%, which would result in a commensurate decrease in San Leon's economic interest in OML 18 to 40.5%; and

(ii) thereafter, when subsequent production hurdles are met, Bilton's net economic interest in Eroton will increase incrementally until cumulative gross OML 18 production reaches 40 million barrels, at which point San Leon's economic interest in OML 18 would be 22.5% as Bilton and San Leon's economic interests in Eroton shall reflect their shareholdings (50% and 50% respectively).

*  Being US$1.1 billion the price paid for the 45% interest in OML 18 in March 2015.

Further details of the Eroton OML 18 Transactions and the MLPL Reorganisation, including details of the material contracts that shall effect the Eroton OML 18 Transactions and the MLPL Reorganisation, can be found in Part 2 of this Document.

In addition to the ELI Reorganisation, through a series of transactions the Company proposes to further increase its interest in ELI. These Further ELI Investments comprise the following:

1. Walstrand Acquisition and Option - On 24 June 2021, the Company announced the further conditional purchase of an interest in ELI, namely, that the Company will pay US$2,000,000 for 5,159 ELI Shares and receive an option to purchase an additional stake of 16,777 ELI Shares for US$6,500,000 prior to 31 December 2022. As at the date of this Document the transfer of 5,159 ELI Shares is pending the ELI Shareholder Consent which the Board wishes to obtain upon completion of the Ocean Pearl ELI Acquisition or a waiver of the requirement for consent being obtained. As at the date of this Document, the option to acquire the additional 16,777 ELI Shares has not been exercised by the Company but is proposed to be in Q3 2022.

2. February 2022 Loan and Subscription - In February 2022, San Leon advanced US$2,000,000 to ELI by way of a loan and Walstrand agreed to transfer 7,800 ELI Shares to San Leon. As at the date of this Document, the transfer of the 7,800 ELI Shares is pending ELI Shareholder Consent which the Board wishes to obtain upon completion of the Ocean Pearl ELI Acquisition or a waiver of the requirement for consent being obtained.

3. New ELI Loan and New ELI Subscription - The Company has conditionally agreed to make a new loan to ELI of US$16,000,000 at a coupon of 14% per annum over four years, and repayable quarterly following a one-year moratorium, which will be accompanied by San Leon subscribing for a further 48,748 new ELI Shares at nominal value, subject to ELI Shareholder Consent which the Board wishes to obtain upon completion of the Ocean Pearl ELI Acquisition or a waiver of the requirement for consent is obtained. The relevant documents are with the parties for signing.

4. Ocean Pearl ELI Acquisition - On 8 July 2022, the Company announced the further conditional purchase of an interest in ELI, namely, that the Company will pay US$15,000,000 for 52,647 ELI Shares currently held by Ocean Pearl.

Assuming completion of the ELI Reorganisation and each of the Further ELI Investments set out above, San Leon will become the largest shareholder in ELI, with its stake comprising 228,548 ELI Shares representing 50.6 per cent of ELI's issued share capital. San Leon will also become a significant lender to ELI with a total of US$48.3 million (principal) owed by ELI to the Company.

On 8 July 2022, the Company entered into the New Facility the purposes of funding its working capital requirements and financing the Further ELI Investments, details of which can be found at paragraph

10.22 of Part 12 of this Document.

Whilst there are a number of conditions to the ELI Reorganisation, and whilst the ELI Reorganisation is conditional upon the MLPL Reorganisation occurring, the Further ELI Investments are not conditional upon each other or the completion of the ELI Reorganisation or Re-Admission.

Further details of the Further ELI Investments can be found in Part 3 of this Document.

3. Reasons for the Proposed Transactions and Strategy of the Company

San Leon is committed to the long-term development of its Nigerian assets, with a focus of delivering value to Shareholders. This is driven by its technical expertise and operational capabilities.

It is the Board's belief that the MLPL Reorganisation and the ELI Reorganisation, together with the Further ELI Investments, are expected to have the following benefits for the Company and its shareholders:

• the consolidation of Midwestern's holdings in the Company and MLPL into a single holding in the Company in conjunction with the Eroton OML 18 Transactions, allows the Company to increase its economic exposure to OML 18;

• increasing the Company's economic interests in ELI will complement the Company's proposed 100% interest in MLPL, as the ACOES is being constructed to provide a dedicated oil export route from OML 18 and therefore for the benefit of MLPL, including the expected reduction of pipeline losses and increasing the uptime for export;

• San Leon's larger presence by virtue of its activities, resources and commitments, will pave the way for the Company to become a significant participant in the Nigerian oil and gas market, thereby better positioning the Company to deliver value for shareholders; and

• increasing the Company's technical and management involvement in the OML 18 asset, serving to help optimise the development of the asset. This has been formalised through the Asset Management Agreement.

Each of these benefits is expected to contribute to the Company's main objectives which are to:

• use the Company's interest in OML 18 as a platform to become a leading independent production and exploration company focused on Nigeria and West Africa - by securing and developing further high potential asset opportunities that yield value for shareholders;

• use the Company's technical and operational expertise in securing production and near-term operating cash flow which will yield value to shareholders whilst continuing to forge close links with governments, partners and the local communities that it operates in; and

• continuing to position the Company for further transactions.

All of the MLPL Reorganisation and ELI Reorganisation, together with the Further ELI Investments, are considered by the Directors to represent transformational transactions for the Company. The Board appreciates that Eroton and OML 18 currently face a number of challenges, several of which are intended to be overcome via the refinancing of the Existing Eroton Debt Facility by the New Eroton Debt Facilities, the completion of the Eroton OML 18 Transactions and the associated Settlement Agreement and the ACOES coming into full operation. Further details of these key challenges can be found in paragraphs 4(b), (c) and (d) of this Part 1 and in Part 4 of this Document.

The Board are of the view that the Eroton OML 18 Transactions and New Eroton Debt Facilities are important for several reasons, including:

(i) the Eroton OML 18 Transactions underpin the valuation and rationale of the MLPL Reorganisation by delivering, indirectly, to San Leon a far greater interest in OML 18 than is currently held by Eroton;

(ii) the Sahara OML 18 Transaction resolves a series of disputes that have arisen between Eroton and its OML 18 joint venture partner, Sahara. Several of these disputes have developed into legal actions (the "Eroton Litigation"), although none are currently being actively pursued, and all legal actions between Eroton and Sahara will be extinguished as part of the Sahara OML 18 Transaction, thereby enabling Eroton to focus on the commercial development of OML 18 as a world class oil and gas field; and

(iii) the New Eroton Debt Facilities are a condition to and are necessary to fund the Eroton OML 18 Transactions and also enable the Existing Eroton Debt Facility with GTB to be refinanced.

If the New Eroton Debt Facilities are not entered into or once entered into do not complete or the conditions to drawdown are not satisfied and/or the Eroton OML 18 Transactions do not complete then the MLPL Reorganisation cannot complete. The New Eroton Debt Facilities and the Eroton OML 18 Transactions are not in the Company's control and even if shareholders approve the Resolutions, they may not occur. In any of these cases then San Leon would retain a 40% equity interest in MLPL with Midwestern continuing to own the remaining interest in MLPL and Eroton would retain a 27% economic interest in OML 18, meaning that San Leon would continue to have a 10.58% initial indirect economic interest in OML 18. The outstanding MLPL Loan Notes would become payable by MLPL (or by Midwestern as guarantor of the MLPL Loan Notes) to San Leon within 90 days of termination of the MLPL Reorganisation Agreement.

The New Eroton Debt Facilities and the Eroton OML 18 Transactions are also important to the future financial condition of Eroton, and given the Company's significant focus on OML 18 and its operator Eroton, the failure of the New Eroton Debt Facilities and the Sahara OML 18 Transaction to complete, could have a material and adverse effect on Eroton, with a consequent adverse effect on the Company's business, financial condition and results.

Further details of the Eroton Litigation are set out in paragraph 4(d) of this Part 1 and in paragraph 3.4 of Part 2 of this Document and the risks around the Existing Eroton Debt Facility and the importance of the New Eroton Debt Facilities are described in paragraph 2.1 of Part 4 of this Document.

4. Information about OML 18

The OML 18 block lies within the Eastern swamp region of the southern part of the Niger Delta in Rivers state, Nigeria and covers an area of 1,035 km2. The current licence will expire on 21 October 2038, having been renewed in 2018. It cuts across the entire Cawthorne Channel and Alakiri districts and a section of Awoba on the boundary between OML 18 and OML 24. Nine fields have been discovered in the block to date being: Akaso, Alakiri, Asaritoru, Awoba, Bille, Buguma Creek, Cawthorne Channel, Krakama, and Orubiri.

The Awoba field straddles the OML 18 licence boundary with OML 24, operated by Newcross Exploration and Production Limited. Whilst Newcross operate Awoba, 50% of the field's costs and production are allocated to OML 18 based on a 'pre-unitization' agreement which was signed on 17 December 2018 between NNPC, Eroton and Newcross.

Original In-place volumes (mid case) in the OML 18 assets are estimated at approximately 3,804 million stb (oil and condensate) and 9,836 Bscf of gas, which includes both associated gas (gas which is produced with oil) and non-associated gas (produced from dedicated gas wells). To date, 155 wells have been drilled on the OML 18 block (excluding the 'water wet' wells drilled in Buguma South, Bakana and Minama).

The parties in the above OML 18 shareholding structure are as follows.

• NNPC: The Nigeria National Petroleum Corporation is the state oil corporation of Nigeria.

• Eroton:

o Eroton Exploration and Production Company Limited is the current operator of OML 18 and has a 27% interest in the OML 18 licence. Pursuant to the Eroton OML 18 Transactions, it is anticipated that Eroton's interest in OML 18 will rise to 45%.

o Eroton is an independent energy company based in Nigeria, focused on the full cycle from exploration to development of oil and gas. It was incorporated in 2013 to acquire the 45% interest in OML 18 from Shell, Total and Eni, a transaction that was completed in March 2015. The divestment was part of Shell's strategic review of its onshore portfolio in Nigeria and was in line with the Government of Nigeria's aim of developing Nigerian companies in the country's upstream oil and gas sector.

o Eroton's principal asset is its 27% economic interest in OML 18 following a transfer of an 18% economic interest to Sahara and Bilton following the purchase in 2015. It also has a 'non operated venture partnership' with Newcross E & P Company Limited, as the operator of the Awoba field, which straddles OML 18 and OML 24, on a 50:50 equity ratio. NNPC has the remaining 55% economic interest in OML 18.

o The oil from OML 18 is processed for export, whilst, in the ordinary course, the gas from OML 18 is intended to be sold to the Nigerian domestic gas market, with its principal customer being Notore Chemical, the owner of a local fertiliser plant, pursuant to a long term 'take or pay' offtake agreement. In recent years, sales of gas to Notore Chemical have not always occurred in line with the terms of the Notore Offtake Agreement and Notore Chemical is significantly in arrears in relation to payment. When such sales of gas occur as contemplated these will satisfy Eroton's DSO of gas under Nigerian law.

o The Eroton board and senior leadership team is an experienced team led by non-executive chairman, Mr Onajite Okoloko. Mr Okoloko acts as the Chairman of the board of Eroton, in addition to his roles as Chairman of Midwestern and non-executive director of Notore Chemical.

o Eroton has over 150 employees, with its operations being based in the Rivers state and its commercial headquarters being based in Lagos state. Eroton has general memorandum of understandings with five clusters of host communities in the area where OML 18 is based, as part of its commitment to commodity development and a general partnership with the local communities.

o Eroton entered into the Existing Eroton Debt Facility on 18 December 2018 between Eroton (as the borrower) and GTB (as the lender, agent, arranger and security trustee) details of which are set out in paragraph 10.24.8 of Part 12 of the Document. The Existing Eroton Debt Facility is secured by way of an all assets debenture (including the OML 18 licence) dated 21 December 2018 between Eroton (as chargor) and GTB (as security trustee), an deed of security assignment dated 21 December 2018 between Eroton (as chargor) and GTB (as security trustee), an deed of share charge dated 21 December 2018 between Eroton (as borrower), Martwestern (as shareholder) and GTB (as security trustee) and an undated deed of share charge between Eroton (as borrower), Bilton (as shareholder) and GTB (as security trustee). The Existing Eroton Debt Facility is governed by English law. Further details in relation to the Existing Eroton Debt Facility can be found in section (d) of this section 4 of Part 1.

• Sahara: OML 18 Energy Resource Limited is a Nigerian company privately-owned by Sahara Field Production 18 Limited ("Sahara") and Sahara Charitable Foundation. Sahara currently holds an effective 16.2% economic interest stake in OML 18, which will be transferred in whole to Eroton via the proposed Sahara OML 18 Transaction which has been negotiated but has not yet been executed as the New Eroton Debt Facilities have not yet been executed.

• Bilton: Bilton Energy Limited is an indigenous company whose entry costs into OML 18 were carried by certain partners. Mr Adekolapo Ademola, a non-executive director of San Leon, has a 44% ownership interest in Bilton and is a director of Bilton. Bilton has a 1.8% indirect economic interest in OML 18 held by its 100% owned subsidiary Bilton OML 18 Limited, which will be transferred in whole to Eroton via the Bilton OML 18 Transaction. The Bilton OML 18 Transaction has been entered into but is subject to certain conditions including that the Sahara OML 18 Transaction (which has been negotiated but has not been signed and is itself conditional upon the entry into and utilisation of the Eroton New Debt Facilities) becomes unconditional. Bilton also has a 50% voting interest in Eroton (Martwestern holds the remaining 50%) with a 2% initial economic interest in Eroton, which will remain unchanged by the Bilton OML 18 Transaction.

• Martwestern: Martwestern Energy Limited is a Nigerian company 100% owned by MLPL. Martwestern owns 50% of the voting interests in Eroton (Bilton owns the remaining 50%). Martwestern has a 98% initial economic interest in Eroton.

• MLPL: Midwestern Leon Petroleum Limited is a Mauritian-incorporated special purpose vehicle, which, as at the date of this Document, is 40% owned by San Leon with the remaining 60% held by Midwestern. Following completion of the MLPL Reorganisation, MLPL will be owned 100% by San Leon. MLPL is the 100% shareholder of Martwestern and therefore holds the combined OML 18 interest of both San Leon and Midwestern. MLPL is also the borrower in respect of the MLPL Loan Notes, further information regarding which can be found in paragraph 6 of this Part 1 and paragraph 4.2 of Part 2 of this Document.

• Midwestern:

o Midwestern is an independent Nigerian exploration and production company with a portfolio of hydrocarbon assets. The company was established in 2001 and commenced its upstream activities in 2005.

o Midwestern is owned by Mr Onajite Okoloko, together with other individuals and entities and the Delta State Government of Nigeria. Mr Okoloko is the Chairman of the board of Midwestern.

It is emphasised that the MLPL Reorganisation is conditional, amongst other things, on the entry into and the utilisation of the New Eroton Debt Facilities and the Eroton OML 18 Transactions completing. Whilst the Terms of the New Eroton Debt Facilities have been approved by the lead lender, Afreximbank and the Sahara OML 18 Acquisition Agreement has been negotiated but is not expected to be entered into until after the New Eroton Debt Facilities have been entered into and the funds are available and the Bilton OML 18 Acquisition Agreement has been executed, subject to certain conditions, they are dependent on, inter alia, the New Eroton Debt Facilities being entered into and becoming unconditional and being drawn down. Furthermore, the New Eroton Debt Facilities have not yet been entered into and once entered into will be subject to additional conditions to drawdown which will have to be satisfied prior to utilisation of the facilities and for the entry into and completion of the Sahara OML 18 Transaction and the Bilton OML 18 Transaction. These matters are not under the Company's control. Accordingly, there is no certainty that the New Eroton Debt Facilities will be entered into or that the Eroton OML 18 Transactions will proceed or that they will proceed on the currently proposed terms. Only once the Eroton OML 18 Transactions complete and the other conditions to the MLPL Reorganisation have been satisfied will the Company be able to proceed with the MLPL Reorganisation and Re-Admission. There can therefore be no guarantee that the MLPL Reorganisation and Re-Admission will occur.

As the operator of OML 18, Eroton may incur the costs of capital expenditure and operating expenditure in relation to OML 18 on behalf of its joint venture partners and recover this via a cash call arrangement pursuant to the JOA after the amounts have been reconciled. The Directors understand that Eroton's ability to pre-fund capital expenditure and operating expenditure in relation to OML 18 on behalf of its joint venture partners is a key requirement for Eroton's role as operator and represents a significant component of Eroton's working capital requirements. Funding requirements of this nature would normally have been approved in advance as part of an annual budget or specific work progress, although the Directors understand that Eroton has faced issues with being able to agree the OML 18 budget with its joint venture partners.

As at 30 April 2022, Eroton had unaudited receivables of approximately US$104.57 million from its OML 18 joint venture partners, being Sahara, Bilton and NNPC, in relation to unpaid joint venture cash calls. No amounts in relation to such receivables have been received since 30 April 2022 but outstandings continue to accrue. Of this, approximately US$66.84 million represents amounts receivable from Sahara and Bilton which are to remain outstanding as intercompany balances (within the Enlarged Group) and approximately US$37.72 million represents amounts receivable from NNPC, which the Directors are informed the majority of which is expected to be recovered from NNPC in due course after the necessary reconciliations, although there may be instances where NNPC disagrees, disallows or requests a revision of costs presented by Eroton.

The Directors understand that there are several disputes, principally between Sahara and Eroton, which, among other things, relate to: (i) indebtedness and delayed payments for gas under the Notore Offtake Agreement; (ii) the agreement of budgets for the operation of OML 18; (iii) disputes in respect of various legacy issues regarding the acquisition of OML 18 and disputes regarding the operation of OML 18 including cash calls; and (iv) disputes in relation to various alleged payments in relation to shares of profits from OML 18.

Notwithstanding the joint lifting arrangements in respect of OML 18 (which are currently still in effect), the Directors understand that in 2020 Sahara started lifting directly according to their interest in the OML 18 field.

A consequence of these disputes has been the Eroton Litigation, being a number of litigation claims and/or counterclaims and other legal actions involving Eroton, Bilton, Sahara and Notore Chemical, which are detailed in paragraph 3.4 of Part 2 of this Document, with the potential risks of these actions being considered in paragraph 2.2 of the Risk Factors laid out in Part 4 of this Document.

Given these disputes, the exit of Sahara from OML 18 has been agreed in principle (although the Sahara OML 18 Acquisition Agreement has been negotiated but has not yet been executed), subject to the entry into and utilisation of the Eroton New Debt Facilities, which is intended to be effected by the Sahara OML 18 Transaction, which is to occur in connection with the Settlement Agreement to effect the settlement of the aforementioned litigation and legal actions. The Directors therefore believe that completion of the Sahara OML 18 Transaction will assist with enabling Eroton to focus on the commercial development of OML 18.

On 18 December 2018, Eroton (as the borrower) and GTB (as the lender, agent, arranger and security trustee) entered into the Existing Eroton Debt Facility, a US$250,000,000 term loan facility agreement, details of which are set out in paragraph 10.24.8 of Part 12 of this Document.

Eroton has not complied with all of the conditions in the Existing Eroton Debt Facility, including disruptions to the repayment schedule and provision of loan covenant compliance information, which could give rise to a right of GTB to call an event of default or enforce security granted to it. The potential risks of these actions are considered in paragraph 2.1 of the Risk Factors laid out in Part 4 of this Document. The Board understands that no such actions have been brought by GTB thus far, and the intention is that the Existing Eroton Debt Facility will be refinanced using some of the funds to be drawn from the New Eroton Debt Facilities, should such facilities be entered into. Subject to completion of the New Eroton Debt Facilities, the New Eroton Debt Facilities will replace the Existing Eroton Debt Facility, which will be repaid in full and GTB's security in connection with the Existing Eroton Debt Facility will be discharged.

If the New Eroton Debt Facilities are not entered into or once entered into does not complete or the conditions to drawdown are not satisfied and/or the Eroton OML 18 Transactions do not complete then the MLPL Reorganisation cannot complete. The New Eroton Debt Facilities and the Eroton OML 18 Transactions are not in the Company's control and even if shareholders approve the Resolutions, they may not occur. In any of these cases then San Leon would retain a 40% equity interest in MLPL with Midwestern continuing to own the remaining interest in MLPL and Eroton would retain a 27% economic interest in OML 18, meaning that San Leon would continue to have a 10.58% initial indirect economic interest in OML 18. The outstanding MLPL Loan Notes would become payable by MLPL to San Leon within 90 days of termination of the MLPL Reorganisation Agreement.

The New Eroton Debt Facilities and the Eroton OML 18 Transactions are also important to the future financial condition of Eroton, and given the Company's significant focus on OML 18 and its operator Eroton, the failure of the New Eroton Debt Facilities and the Sahara OML 18 Transaction to complete, could have a material and adverse effect on the Company's business, financial condition and results.

Whilst the Sahara OML 18 Acquisition Agreement has been negotiated it is not expected to be entered into until after the New Eroton Debt Facilities have been entered into and the funds are available and it is therefore dependent, inter alia, on the New Eroton Debt Facilities being entered into and becoming unconditional and being drawn down. Furthermore, the New Eroton Debt Facilities have not been entered into and once entered into will be subject to additional conditions to drawdown which will have to be satisfied prior to utilisation of the facilities and for entry into and completion of the Sahara OML 18 Transaction. These matters are not under the Company's control. There can be no certainty that: i) the New Eroton Debt Facilities will be entered into; ii) or that the Sahara OML 18 Transaction will proceed; iii) or the Settlement Agreement will be entered into or the terms on which any of them will be entered into or that they will proceed on the currently proposed terms. There can therefore be no guarantee that the MLPL Reorganisation and Re-Admission will occur.

In addition, in the event that the Eroton OML 18 Transactions, the MLPL Reorganisation and Re-Admission do not occur, the Eroton Litigation is likely to continue (details of which is set out in paragraph 3.4 of this Part 2 and further details of the risks around the Eroton Litigation are set out in paragraph 2.2 of Part 4 of this Document.

In addition to the Eroton Litigation, there are various claims and debt recovery actions involving Eroton, which can be considered to generally be of the nature usually encountered by oil exploration and production companies in Nigeria. These broadly fall into two categories and the most material of which summarised below:

A number of actions have been made against Eroton by local communities in and around OML 18 ("Host Communities"), specifically claiming that such Host Communities have suffered loss as a result of alleged spills. The relevant Host Communities in these cases generally seek significant monetary compensation for the alleged damage caused to their communities and livelihood, e.g. fishing. Eroton considers these claims lacking in merit on the basis that: (a) it has no record of the spills alleged to have occurred on the specific dates and (b) the spills are alleged to have occurred in relation to crude oil transported within the NCTL, which carries crude from a number of oil fields and is not exclusively used by Eroton. Accordingly, Eroton is vigorously contesting these claims.

Eroton has entered into various memoranda of understanding ("MoUs") with a number of Host Communities. There are numerous cases between these Host Communities, seeking either (a) recognition and inclusion within one of the MoUs or (b) for Host Communities that are already part of a MoU, changes to the sharing formulae used to divide monies paid by Eroton under such MoU (in order to obtain a larger share of such monies). In both cases Eroton is named as a co-defendant due to having entered into an MoU as the operator of OML 18, so that any judgment will also be binding on Eroton. However, these cases do not increase Eroton's exposure, they only affect the allocation of the monies it has already agree to pay under the MoUs. Furthermore, under the PIA the law relating to Host Community relations will change by the end of August 2022 rendering a number of these claims irrelevant.

It should be noted that the aforementioned other litigation matters will not be prospectively remedied by the Settlement Agreement.

There are certain environmental issues, relating to the expiration of approvals and engagement with local communities that the Company has been made aware of, in respect of Eroton and its oil exploration activities in relation to OML 18.

Eroton operates OML 18 with the benefit of certain approvals, including Environmental Evaluation Study ("EES") approvals.

The EES approvals for OML 18 have expired. Eroton is in the process of renewing these approvals as they are a requirement under the Environmental Guidelines and Standards of the Petroleum Industry in Nigeria ("EGASPIN"). Under EGASPIN, a person or body corporate (and the management of a body corporate) operating under an OML without any such approval may have that OML revoked (as well as being at risk of criminal sanctions including imprisonment and/or liability to pay fines).

Under EGASPIN, Eroton is also required to maintain Environmental Social Impact Assessment Report ("ESIA") approvals for the Akaso, Alakiri and Cawthorne channel fields within OML 18.

The status of the ESIA approvals in respect of the above-mentioned fields are as follows:

• NUPRC previously approved the ESIA report for the Akaso field, and the approval remained valid until 3 March 2022. Accordingly, the approval is now out of date and a new ESIA report and approval in respect of the Akaso field is required; and

• NUPRC has not approved the ESIA reports for the Alakiri and Cawthorne channel fields due to the expired environmental data submitted by Eroton. Although the revalidation of the required field data has commenced and sampling for two seasons has been planned for Q2 - Q4, 2022, the ESIA approval for these fields is currently outstanding.

Accordingly, Eroton is required to obtain up to date ESIA report approvals for the Akaso, Alakiri and Cawthorne channel fields and a failure to do so could lead to enforcement action by the relevant authorities in Nigeria, which could result in a material adverse effect on the Eroton's business, operations, financial performance and cash flow and future prospects and the market price of the Ordinary Shares may be affected.

Eroton has engaged with various local communities in the area surrounding the location in where it carries out its oil exploration activities. As a result of the passing of the Petroleum Industry Act 2021 ("PIA") which entered into force in Nigeria on 16 August 2021, Eroton is required to establish certain funds for the economic benefit of such communities. A summary of those obligations is set out below:

• Eroton is required to, and has commenced the establishment of, a decommissioning and abandonment fund (the "Fund"). However, the provisions of the PIA require that the Fund be set up and monies standing to the credit of the Fund to be placed in an escrow account within 12 months of the Effective Date of the PIA, the deadline for such action being 15 August 2022.

• Eroton is also required to establish a host community development trust (the "Trust") within 12 months of the Effective Date of the PIA, the deadline for such action being 15 August 2022. Eroton is still in the process of developing a road map for establishing the Trust, however it has made the relevant budgetary provision (3% of operating expenses) as stipulated under the PIA to comply with the requirement of the Fund. Nonetheless, Eroton has not yet complied with this requirement under the PIA.

Failure to comply with the provisions of the host community and decommissioning obligations under the terms of an OML and the provisions of the PIA is a ground for the revocation of the relevant OML, so if Eroton should not meet the deadline specified above it will be at risk of forfeiting its right to operate OML 18, which could result in a material adverse effect on the Eroton's business, operations, financial performance and cash flow and future prospects and the market price of the Ordinary Shares may be affected.

Peak production levels of over 100,000 stb/d and 200 MMscf/d were achieved from OML 18 in the early 1970s and early 1990s, respectively. Cumulative production from the OML 18 fields (including the 50% interest in Awoba) was approximately 1,099 MMstb (including Alakiri condensate) and 1,994 Bscf of gas, as of 31 December 2021. Table 2 below shows a summary of the OML 18 production history by field up to the end of 2021.

Table 2: OML 18 Field Production Status & Production Summary (Gross on Licence)

Source: PetroVision Energy Services Limited CPR - Table 1-2 on page 165 of this Document

*  Includes recently drilled Akaso-15, Akaso-16, and Akaso-17 (not tied-in yet).

** Awoba straddles OML 18 and OML 24. 50% of the Awoba production is allocated to OML 18 as shown in the table. The production figures are based on production reports from the Operator and the previous operator and do not account for any potential unreported production losses e.g., due to theft.

*** Nine wells have been drilled in Awoba but only four of them are within in the OML 18 block area.

Average production (gross on licence) recorded in December 2021 for the OML 18 asset (including 50% of Awoba) is about 15,750 bopd (plus water at a water cut of 42%), and about 56 MMscf/day of gas. The last period of fully active field management of OML 18 was during Q1 2020, prior to constraints resulting from the global COVID-19 pandemic, OPEC restrictions, preparation for the ACOES and budgetary challenges (particularly in the face of escalating pipeline losses on NCTL, due to crude oil theft, illegal oil bunkering, and pipeline vandalism). As a result of these operational limitations, by January 2021 total asset production had declined to circa 34,000 bopd (pre losses).

From March 2021, even higher crude losses were being recorded on the NCTL (80-90% of injected barrels) which encouraged Eroton to adopt a strategy of minimising production and deferring well activities pending the completion of the ELI owned ACOES.

This field management strategy resulted in an artificial drop in gross production to circa 16 kbopd (pre- losses) by December 2021. Petrovision, the competent person and author of the CPR, considers this drop in production to be an inaccurate reflection of the full potential of the asset on which to benchmark future performance forecasts, particularly with the potential additional production from Akaso-17 well, which was successfully drilled between Q4 2019/Q1 2020, with an extensive oil column, and ready to be tied-in for production (currently estimated for Q2-2022). Petrovision has therefore benchmarked the performance forecasts for the developed reservoirs against the most recent period through which the fields were fully operational and under active field management.

The performance of OML 18, in terms of average oil production measured in bopd, improved from the point of its acquisition by Eroton up until Q1 2020, representing a period during which the asset was being actively managed, in full production and prior to disruptions due to community payment delays, OPEC restrictions, ELI preparations and recent minimal production mode, which occurred from Q2 2020 onwards.

In terms of gas production, average gas sales in FY21 were 10.8 Bscf, compared with average gas sales of 50.0 and 32.7 Bscf in FY19 and FY20 respectively. Although the Notore Offtake Agreement is principally a 'take or pay' offtake agreement, the Directors understand that Eroton has not utilised the take or pay provisions in the agreement and the agreement has not always performed in line with the terms and the reduction in gas production was mainly customer driven as Notore Chemical requests for gas based on the consumption profile of its fertilizer plant. The Board understands that the significant dips observed in gas sales is due to the shutdown of Notore Chemical's fertilizer plant and consequently, its inability to receive gas from the field. The major decline observed in FY21 was due to an extended shutdown of the Notore Chemical plant. The gross receivable from Notore in relation to gas payments as at 31 December 2021 and as at 30 April 2022 was over US$40 million and has continued to accrue since the end of April 2022.

Some of the gas produced from OML 18's Cawthorne oil wells has been flared over previous years and this continues. Eroton's accrued net position in respect of gas flaring penalties was US$7.2 million and US$1.3 million in FY20 and FY21 respectively.

Following completion of the MLPL Reorganisation, the Directors intend to use San Leon's rights pursuant to the Asset Management Agreement to review arrangements with respect to OML 18's gas production and the offtake of gas, with a view to seeking improvements to the performance and economics of such arrangements.

Further production details for OML 18 can be found in paragraph 1.2 and 4 of the Competent Person's Report in Part 7 of this Document.

OML 18 currently has four flow stations, one central gas gathering plant and one non-associated gas plant. Oil produced from Cawthorne Channel, Akaso and Alakiri has historically been transported to Bonny Oil terminal via the NCTL.

The current handling capacity of the existing OML 18 facilities is 180,000 bpd. The non-operated Awoba facility has a further 40,000 bpd capacity. Optimisation of the OML 18 facilities is planned to capture additional volume, further details of which are contained within the CPR.

Eroton had challenges evacuating crude oil due to significant NCTL downtimes during FY19. Eroton did not lift oil volumes for six months in FY20 and two months in FY21 partly due to NCTL downtimes.

Further details of the current crude evacuation facilities at OML 18 can be found in section 1.3 of the Competent Person's Report in Part 7 of this Document.

Further information regarding the ACOES being constructed by ELI can be found in paragraph 5 of this Part 1 of this Document.

There are three gas pipelines linked to OML 18 infrastructure.

Produced gas is typically exported from the Cawthorne Channel and Alakiri to the Notore Chemical fertilizer plant.

Associated gas from the Cawthorne Channel is compressed in the Cawthorne gas processing plant before evacuation to the Notore Chemical fertilizer plant. The Cawthorne gas processing plant was shut down prior to 2018, as this plant requires a stable operating environment for oil production and cannot be run in a manner where it comes online and offline due to the frequent shutdowns experienced with the NCTL. The Directors understand that Eroton plans for operations at the Cawthorne gas processing plant to resume following the ACOES coming online.

The current gas processing capacity of the existing OML 18 facilities (including the Cawthorne gas processing plant) is 275 MMscf/d. A proposed gas development plan includes the undeveloped NAG reserves in Awoba, Buguma Creek and Bille and requires expansion of the gas processing facilities, further details of which are contained within the CPR, located in Part 7 of this Document.

Notore Chemical currently purchases the gas under a take or pay arrangement under the Notore Offtake Agreement, pursuant to which gas supplied to Notore Chemical from OML 18 is priced at US$1.46/MMscf if used for fertilizer production and US$2.50/MMscf if used for power generation at Notore Chemical's facility. The gross receivable from Notore Chemical in relation to gas payments as at 31 December 2021 and as at 30 April 2022 was over US$40 million and has continued to accrue since the end of April 2022. The Notore Offtake Agreement is intended to satisfy Eroton's 2022 DSO which requires it to deliver a minimum of 55 MMscf/d of gas to the Strategic Sectors which if not met incurs financial penalties.

Further details of the Notore Offtake Agreement can be found in paragraph 10.3.8 of Part 12 of this Document. Further details of the DSO are set out in paragraph 2.15 of Part 5 of this Document.

Further details of the gas evacuation facilities at OML 18 can be found in section 2.1 of the Competent Person's Report in Part 7 of this Document.

Capital expenditure declined between 2019 and 2021 due to several factors, including: Sahara's refusal to approve the 2021 budget; delays in obtaining vendor approval from National Petroleum Investment Management Services; and the impact of the COVID-19 pandemic on operations and high NCTL losses and the significant reduction in volume of crude delivery to the terminal. This led to projects not being executed, and delays in execution of work programs where financial commitments had already been made during prior periods.

The main activities associated with the future development of OML 18 fields include well workovers, interventions, new drilling, artificial lift and secondary recovery via water injection (with the added benefit of the planned infield dehydration). Three forecast sensitivities have been evaluated: Proved (1P), Proved & Probable (2P), and Proved, Probable & Possible (3P).

A combined total of one hundred and three notional new wells have been proposed by Eroton for full development of the OML 18 fields, including non-associated gas NAG reservoirs. Eroton's proposed development programme envisages a capital expenditure budget of circa US$2.9 billion over the next 10 years, for both the 1P and 2P cases. This workover programme is expected to be predominantly financed from OML 18's future cashflows. Mobilisation of the Hydraulic Workover Unit (HWU) is currently estimated for Q4 2022 with the arrival of three drilling rigs anticipated in Q3 2023, Q3 2024 and Q3 2025 (for non-associated gas). An additional twelve new wells have been estimated for the 3P case with an associated cost of about US$300 million.

The total facilities development CAPEX required for the OML 18 asset is estimated by Petrovision at approximately US$549 million and includes the gas capacity expansion to 500 MMscf/d, to accommodate additional gas volumes from the Non-Associated Gas (NAG) wells, and in-field dehydration, to reduce water handling and transport requirements.

The oil development plan presented in the CPR is anticipated to see oil production ramp up from the current approximately 16,000 stb/d to approximately 100,000 stb/d (gross on license and pre downtime and losses) by 2026 in the mid case (2P) scenario. The gas development is anticipated to take OML 18 gas production levels up to 500 MMscf/d (gross on license and pre downtime and losses) by 2032.

Based on the development activities outlined in the CPR, the forecasted 2P oil and gas technical recoveries (TR), which do not incorporate an economic cut-off, are approximately 660 million stb and 3,453 Bscf, respectively. This translates to 2P ultimate recovery (EUR) from the OML 18 asset (including 50% of Awoba) of approximately 1,759 MMstb oil (including condensate) and approximately 5,447 Bscf of gas.

Further details of the Asset Development programme for OML 18 can be found in section 1.4 and 4 of the Competent Person's Report in Part 7 of this Document.

Reserves

Table 3 below summarises OML 18's economic reserves per field (being the forecasted technical recoveries less deductions for production losses/downtime, economic limits, and utility/fuel for gas). The economic reserves are presented both as gross on license and indirect net economic interest attributable to San Leon (i.e., before deduction for royalty). The net attributable reserves were allocated to SLE by field on an annualised pro-rated production basis.

Table 3: OML 18's economic reserves per field

Source: PetroVision Energy Services Limited CPR - Table 1-6 on page 168 of this Document

*  Post-completion of the MLPL Reorganisation, based upon 44.1% economic interest in OML 18 until hurdles met.

Petrovision, the competent person and author of the CPR, considers that these results show significant recoverable (technical) oil and gas volumes remaining in OML 18 and the existing well stock confirms good deliverability, high pressures and generally favourable reservoir properties.

Contingent Resources

Table 4 below summarises the estimated contingent (unrisked) oil and gas recoverable resources, post field development plan (FDP) studies. These are generally constituted by reservoirs with insufficient information to appropriately characterise and quantity (well logs and/or fluid sampling data). The contingent resources also include the recoverable volumes beyond the forecast cut-off date (Jan-2060).

Table 4: OML 18 Oil & Gas Contingent Resources

Source: PetroVision Energy Services Limited CPR - Table 1-7 on page 169 of this Document

* Post-completion of the MLPL Reorganisation

Current contingent resources for Akaso are based on proved recoverable volumes from water injection (secondary recovery) which was originally classified as proved reserves category, but are now removed following the non-approval of the Akaso water injection scheme by the regulatory body. However, Eroton is actively engaging with the NUPRC to demonstrate the benefits of water injection in the Akaso field.

Prospective and Lead Resources

Eroton has also identified thirty-nine exploration / appraisal targets, comprising one discovery, thirty-six prospects and two leads within and/or near existing fields on the OML 18 block that were evaluated by PetroVision as part of the CPR. The estimated gross prospective oil and gas resources for OML 18 are shown below in Table 5. The low, best, and high cases were determined probabilistically using range of uncertainties for each volumetric parameter, such as GRVs, petrophysical properties, and PVT properties.

Table 5: OML 18 prospective oil/liquids resources

Source: PetroVision Energy Services Limited CPR - Table 1-8 on page 170 of this Document

* Post-completion of the MLPL Reorganisation

**  OML 18 area only

+  Tema is a discovery, hence no risk associated with discovery. The field is subject to further appraisals.

Table 6: OML 18 prospective gas resources

Source: PetroVision Energy Services Limited CPR - Table 1-9 on page 171 of this Document

* Post-completion of the MLPL Reorganisation

** OML 18 area only

++ Tema is a discovery, hence no risk associated with discovery

Petrovision considers that, as a significant portion of the contingent and prospective resources defined are quite tangible, they will never be far from infrastructure and many of the potential targets can easily be appraised as part of the development drilling programme. Petrovision considers that exploration targets could be tagged on to development wells either by deepening certain wells or optimising trajectories to tag exploration/appraisal blocks/zones etc. This optimisation will be factored into the Eroton's development plan/drilling schedule with the objective of moving some of the prospective resources into reserves without a requirement for dedicated exploration CAPEX.

Further details of OML 18's reserves, contingent resources and prospective resources can be found in section 1.5 of the Competent Person's Report in Part 7 of this Document.

PetroVision developed a detailed economic model that estimated the net present value (NPV) (the model runs on OML 18 and NPV were allocated by field based on technical production) based on discounted cash flow of future net revenues at a discount rate of 10% ("NPV10") going forward, as of 1 January 2022, to determine the value of the indirect net economic interest attributable to San Leon. The economic model includes the effect of Eroton's debt funding expected downtime and significantly reduced pipeline losses. The net attributable cash flow to SLE was allocated to SLE by field on an annualised pro-rated production basis.

NPV10 values were calculated using base price assumptions for two cases:

i. Pre-finance, an NPV10 after tax value is calculated based on cashflow to San Leon excluding the effects of paying RBL costs and Withholding Tax ("WHT"), which gives the NPV10 of cash flow from SLE's interests (post completion of the MLPL Reorganisation) without financing deductions

ii. Post-finance, an NPV10 after tax value is provided which includes the effects of RBL and WHT, which provides a view on the NPV10 of cash flows receivable by SLE at the MLPL level.

Table 7: NPV10 After Tax Net Cashflow (SLE Entitlement only) - post completion of the MLPL Reorganisation

Source: PetroVision Energy Services Limited CPR - Table 1-10 on page 173 of this Document

In addition to San Leon's indirect net economic interest on OML 18 block, the Company also has an exclusive right (subject to conditions) to provide certain drilling-related oil field services to OML 18 under a Master Services Agreement. Eroton's proposed development program envisages a capital expenditure budget over the next 10 years more than US$2.9 billion, largely funded from cash flow. San Leon has a separate contract in place to provide management and technical services to Eroton, in addition to the Asset Management Agreement.

Further details regarding the Economic Evaluation of OML 18 can be found in sections 1.6 and 5 of the Competent Person's Report in Part 7 of this Document.

5. Information about ELI

Corporate Background

ELI is a midstream infrastructure group, serving the oil and gas sector and builds crude transportation and storage systems within the Niger Delta area of Nigeria.

ELI comprises ELI Malta and its subsidiary, ELI Nigeria. ELI Malta was incorporated on 6 September 2017, while ELI Nigeria was incorporated on 19 February 2016. ELI Malta holds 99.99% of the shares in ELI Nigeria. ELI Malta's shareholders are currently Ocean Pearl Marine MA, San Leon ELI Limited (a subsidiary of the Company), Umugini Pipeline Infrastructure Limited ("UPIL") and Walstrand (Malta) Limited ("Walstrand"). Midwestern has an indirect shareholding in UPIL. Midwestern has a 68% shareholding in Midwestern Hydrocarbon Pipeline Company Limited which in turn owns 75% of UPIL (i.e. a 51% effective interest in UPIL).

ELI is governed by a board of directors and a management team responsible for overseeing ELI's operations. As at 31 May 2022, ELI had an eight person board comprising seven non-executive directors and one executive director. ELI's operations are predominantly conducted through its subsidiary, ELI Nigeria. ELI and its subsidiary as at 31 May 2022 had seventeen full time employees and sixteen contract staff, although both of these are increasing as ELI is currently conducting a recruitment exercise to grow its technical personnel by 50% as it prepares for its live operations and personnel numbers are expected to continue to increase as ELI expands its operations.

Business Model

The business model of ELI is the construction, delivery and deployment of the ACOES at the approved location in Nigeria by ELI Malta, and will involve ELI Malta leasing the ACOES assets through a finance lease to ELI Nigeria over the life of the Crude Handling and Transportation Agreement. Following the completion of the ACOES, ELI Nigeria is to be responsible for operating the asset and handling the crude from OML 18. Eroton (the operator of the OML 18 joint venture) and ELI Nigeria have entered into a crude handling and transportation agreement (the "Crude Handling and Transportation Agreement") pursuant to which ELI Nigeria agreed to provide services relating to handling, storage and transportation of crude oil produced from OML 18.

ELI's ACOES project is being constructed to provide a dedicated oil export route from OML 18, comprising a new pipeline from OML 18 and a floating storage and offloading vessel approximately 30 kilometres offshore. ELI Nigeria has entered into a floating storage and offloading vessel operations and management contract with World Carrier Offshore Services Corporation.

The NCTL is currently used as one of the main methods for the export of oil from OML 18 to the Bonny Terminal. OML 18 has suffered from significant levels of NCTL downtime and pipeline losses over the past five years, as can be seen in Figure 2 below. High crude pipeline losses on the NCTL have been reported for 2021. During Q1/Q2 2021 a crude pipeline loss of up to 90% was reported. In Q3 2021, the pipeline loss averaged 97%. The ACOES project has been designed to reduce the downtime and allocated pipeline losses currently associated with OML 18's reliance on the NCTL.

Further details of the NCTL downtime and pipeline losses can be found in section 3.6 of the Competent Person's Report in Part 7 of this Document.

In 2017, ELI working with Eroton received approval from the NNPC and the Department of Petroleum Resource to construct the ACOES at OML 18. The ACOES is an evacuation system designed to provide alternative export channels from the OML 18 export pipeline running from within the OML 18 acreage and down to the open sea to a dedicated floating storage and the offloading vessel ELI Akaso. ELI Nigeria has obtained a number of licenses to establish and operate the ACOES pipeline and the floating storage and offloading vessel, further details of which can be found in paragraph 5.2.5 of Part 2 of this Document. ELI Nigeria is the first local company to receive an oil pipeline licence alongside a terminal establishment order via Eroton.

ELI's ACOES project was financed initially in 2019 via a facility from Petro-Gap Limited. In December 2019, ELI signed an exclusivity agreement with Shell Trading & Supply Limited ("SWST"), whereby SWST and ELI collaborate to ensure SWST is the exclusive off taker of crude from the ELI Akaso terminal. ELI's current financing is provided through a combination of equity and debt from San Leon, UPIL, Ocean Pearl and Walstrand, together with bank debt.

The ACOES involves laying 47 km of thick wall pipe, equipped with a five-core fibre optic cable from OML 18 17 km through the New Calabar river and then 30 km out into the open sea to the ELI Akaso floating storage and offloading vessel. The ELI Akaso floating storage and offloading vessel has a name plate storage capacity of two million barrels and was purchased at a cost of US$60 million. The pipeline construction is expected to complete during late 2022.

The ACOES is expected to reduce the recent downtime (predominantly a result of NCTL downtime) and reduce high crude pipeline losses from a 2021 average of 73% (peaks of 80-90%) to around 5%. Figure 2 above shows the downtime and crude loss over the past five years on the NCTL. High crude pipeline losses have been reported for 2021 with up to 90% in Q1/Q2 2021 and averaged at about 97% loss in Q4 2021. The ACOES is also anticipated to reduce gas flaring charges.

The current penalty for gas flaring in Nigeria is US$2 per thousand cubic feet, which is treated like a royalty payment and reconciled and payable quarterly. In addition to the ACOES, Eroton is currently planning for an in-field dehydration (IFD) system to remove water from crude oil, thereby reducing liquid handling cost through the ACOES by eliminating water tariffs.

Eroton has commenced the implementation of an interim evacuation programme utilising a barge mounted production facility with storage of both water and crude, with crude export to the ELI Akaso floating storage and offloading vessel operated by ELI. Process testing of the barging facilities, to confirm water separation quality and due diligence on installed equipment, was completed in September 2021 and about 18,000 bbls of export quality crude was successfully injected into the storage barges.

As at the date of the CPR, the OML 18 pilot project has successfully been completed to the mother vessel and the marine spread is being deployed, after which oil is expected to be received via barging to the FSO. Eroton now expects to complete the approval process and commence transhipment in Q3 2022, with transhipment at the Cawthorne flowstation in Q3 2022 while a third barge is expected to become fully operational at Alakiri and Krakama flowstations by the start of Q4 2022.

The full ACOES, including the pipeline, is expected by Eroton to be operational in Q4 2022. The Board expects that the ACOES will reduce the substantial pipeline losses and downtime which have hampered cash flow from OML 18's production.

ELI intends for its pipeline infrastructure to eventually earn fees from third parties for transporting and storing crude oil from the surrounding oil and gas fields in the Eastern Niger Delta. This is considered by the Board to be feasible as the pipeline is planned to be positioned adjacent to several other oil mining leases. In addition, the floating storage and offloading vessel has been designed with capacity in excess of what may be required for OML 18. In this regard, the ACOES pipeline is ultimately intended to play a key role in resolving the local issues with oil production losses.

In 2019, ELI entered into a pipeline development agreement with Newcross Exploration Production Limited, the operator of the nearby OML 24 licence, in relation to the development of a prospective pipeline that will traverse the OML 24 corridor and ultimately connect OML 24 to the ELI Akaso FSO. Whilst preliminary work based around the feasibility of such a pipeline has been undertaken, the development of this is yet to commence.

ELI Malta earned US$5.7 million in revenue from a short-term vessel charter hire to Trafigura for six months during FY20, pending receipt of necessary approvals from the Government of Nigeria's Department of Petroleum Resources and the Nigerian Customs.

During FY21, ELI Malta received US$1 million from Shell Western Trading Limited as part payment of a US$3 million exclusivity fee under a sole offtake arrangement executed with ELI in 2019, under which Shell Western Supply and Trading Limited is to be the sole crude oil offtaker from the floating storage and offloading vessel. The remaining US$2 million will be due from Shell Western Trading Limited on completion of the mooring of the FSO.

From May 2020 onwards, Eroton has made quarterly payments to ELI Nigeria, as advances under the Crude Handling and Transportation Agreement between Eroton and ELI Nigeria. Advance payments received from Eroton in FY20 were US$43.4 million while in FY21 these were US$56.2 million.

As at the date of this Document, ELI's main debt facilities are a US$130 million senior secured term loan facility agreement from Africa Finance Corporation and Zenith Bank Plc to replace an existing facility with GTB but which is conditional upon the New Eroton Debt Facilities. ELI also has a US$30.0 million mezzanine loan from Umugini Pipeline Infrastructure (UPIL) and US$17 million of shareholder loans from San Leon (before any of the Further ELI Investments).

The budgeted cost to completion for the ACOES is approximately US$42 million which largely relates to unfunded capital commitments and other associated costs for pipeline development. The Directors understand that ELI plans for this to be funded by a cash backed stand by letter of credit of US$39.2 million from GTB, the disbursement of which is contingent upon performance and the achievement of milestones, with the remainder being provided by San Leon pursuant to the New ELI Investment.

Further details of the ACOES can be found in section 2.1 of the Competent Person's Report in Part 7 of this Document.

6. MLPL Loan Notes

On completion of the OML 18 Production Arrangement in 2016, the Company received US$173.05 million of MLPL Loan Notes together with a 40% shareholding in MLPL. The MLPL Loan Notes are also accompanied by interest payments accruing at a fixed rate of 17% per annum on the outstanding principal at the time. The shares held by MLPL in Martwestern have also been pledged as security to the obligations under the MLPL Loan Notes.

Further information on the background to the MLPL Loan Notes can be found in paragraph 4.2 of Part 2 of this Document.

Midwestern and Mart Resources Limited jointly and severally guaranteed the payment of the MLPL Loan Notes in the event of a default and to make immediate payment and performance of all obligations to holders of the MLPL Loan Notes. It was originally envisaged that the MLPL Loan Note repayments due to San Leon would be sourced by MLPL from the receipt of dividends through its indirect interest in Eroton. The Directors understand that OML 18's performance has not provided sufficient cash flow to allow Eroton to pay dividends, and since 2017 MLPL has borrowed from Midwestern in order to be able to make repayments to San Leon on the MLPL Loan Notes. Midwestern has charged MLPL a 7% guarantee fee on the outstanding balance of the MLPL Loan Notes. Pursuant to the MLPL Reorganisation, Midwestern will assign the benefit of such receivable owed by MLPL to San Leon Energy Nigeria.

In relation to the outstanding MLPL Loan Notes, further to the announcements on each of 7 July 2021,

20 September 2021, 1 October, 2021, 2 November 2021, 1 December 2021, 4 January 2022,

1 February 2022, 28 February 2022, 29 April 2022 and 24 June 2022, San Leon agreed an extension and then further extensions of the payments in relation to three instalments that were originally due to be repaid on 5 July 2021, 30 September 2021, 31 December 2021 and 24 June 2022 until 8 July 2022, which will be payable 90 days after such expiry, save for, inter alia, if there is an event of default (the "Extended Conditional Payment Waivers"). Interest continues to accrue on the principal amounts waived whilst the Extended Conditional Payment Waivers are in effect. As at 30 June 2022, the Extended Conditional Payment Waivers relate to US$103.8 million, being a principal amount due of US$82.2 million and total accrued interest due of US$21.6 million.

Pursuant to the MLPL Reorganisation Agreement, the Extended Conditional Payment Waiver has been superseded and San Leon has agreed with MLPL, Midwestern and Martwestern to a tenth extension of the Extended Conditional Payment Waivers until the sooner of completion of the MLPL Reorganisation or termination of the MLPL Reorganisation Agreement. Interest continues to accrue on the principal amounts waived pending completion of the MLPL Reorganisation.

Upon completion of the MLPL Reorganisation, the MLPL Loan Notes will become intra group indebtedness and pursuant to the MLPL Reorganisation Agreement, Midwestern will be released from its obligations to guarantee performance of the MLPL Loan Notes by MLPL.

7. Company History

San Leon is incorporated in Ireland. Its Ordinary Shares have been admitted to trading on AIM since September 2008.

The Company has conducted a number of transactions since 2008 and previously had interests in oil and gas assets in Poland and the Netherlands as well as several other locations. Details of San Leon's non-core residual interests in its legacy assets can be found in paragraph 8.

Since September 2016, the Company has been focused on oil and gas in Nigeria and has been exiting its other investments. San Leon's exposure to the Nigerian exploration and production segment currently is via its indirect investments in OML 18 and the ACOES, together with its debt and equity investment in the Oza Field, onshore Nigeria.

8. Information on the Group's non-core assets

In addition to its interests in OML18, San Leon holds certain other non-core assets as follows:

8.1 Net Profit Interests in relation to the Group's former Polish assets

Following a strategy of divesture in relation to San Leon's assets in Poland, San Leon currently holds Net Profit Interests in relation to licenses/concessions in Poland which range from 5 per cent to 10 per cent including in the following licenses or concessions: Rawicz, Bielsko-Biala, Cieszyn, Nowa Sol, Gora and Poznan East - 207.

8.2 Overriding Royalty Interest in relation to its former Dutch assets

San Leon is the beneficiary of the Amstel Royalty Agreements on Block Q13A, which is located offshore the Netherlands (together the "Amstel Oil Field"), including an overriding royalty agreement entered into with Encore Oil Limited as part of a sale and purchase agreement entered into in 2007. TAQA Offshore BV subsequently purchased the interest from Encore Oil Limited.

In January 2022, San Leon received payments totalling more than €5.7 million from the legal actions relating to the Amstel Oil Field. The Amstel Royalty Agreements represent legacy interests and any potential net future benefit to San Leon going forward from the Amstel Oil Field on a monthly basis is not expected to be material to San Leon.

8.3 Net Profit Interest in the SEL 1/11 (Barryroe) licence in the North Celtic Sea, offshore Ireland

Providence, through its wholly owned subsidiary Exola DAC, holds an 80% working interest in and is the operator of SEL 1/11 which contains the Barryroe oil accumulation. SEL 1/11 is located in the North Celtic Sea Basin, c. 50 km off the south coast of Ireland, being situated in circa 100 metres water depth. SEL 1/11 expired in July 2021 in accordance with its terms. Providence has made an application to the Department of Environment, Climate and Communications to secure a Lease Undertaking in respect of Barryroe. A Lease Undertaking gives the holder the right to a Petroleum Lease over that part of the area covered by the Lease Undertaking and a Petroleum Lease would give Providence the exclusive right to produce petroleum from the leased area.

In the past, under different operators, five wells were successfully drilled on Barryroe. All of these wells successfully logged hydrocarbon-bearing reservoirs with three successfully flowing oil to surface. In 2011, having acquired new 3D seismic data, a sixth well was drilled on this field. In March 2012, the Barryroe partners announced the flow rates from this well, which included oil rates in excess of 3,500 BOPD from a seven-metre vertical section of reservoir. Most recently, following a strategic review by Providence and subject to regulatory consent, Providence intends to proceed with an appraisal well in 2023, and assuming a satisfactory outcome, to proceed to first production in 2026, initially focused on the central area in Barryroe only.

San Leon holds a 4.5 per cent Net Profit Interest in SEL 1/11.

8.4 Loan notes and subscription in relation to the OML 11 (Oza) field in Nigeria

San Leon has provided a total loan of US$5,500,000 to Decklar (US$750,000 was provided in August 2020, with a further US$4,750,000 provided in January 2022), which was accompanied by an equity subscription at nominal value. Consequently, San Leon is interested in US$5,500,000 of 10 per cent unsecured subordinated Decklar loan notes and a 11 per cent equity interest in Decklar.

San Leon was seeking to pay a further US$2,500,000 to Decklar by 30 June 2022 which would increase its shareholding in Decklar to 15.0 per cent and increase the unsecured subordinated loan notes to US$8,000,000, and an extension beyond 30 June 2022 is now being discussed.

Decklar is the holder of a Risk Service Agreement ("RSA") with Millennium Oil and Gas Company Limited ("Millennium") on the Oza Field in Nigeria. The Oza Field is a 20 square kilometres concession located onshore in the northern part of OML 11 in Nigeria. The Oza Field is a conventional stacked sands reservoir (12 zones) allowing for vertical drilling and horizontal development drilling. The Oza Field has proven reserves and was formerly operated by Shell Petroleum Development Company of Nigeria Ltd., the local subsidiary of Shell at the time. The Oza Field had three wells and one side track drilled by Shell between 1959 and 1974. Well tests on two wells estimated 2,000 boe/d at 35°/43° API gravity crude oil. More than one million barrels of oil were produced from three zones.

Decklar has performed the workover of the Oza-1 well and the Directors consider that the Oza-1 well test has indicated positive oil results from the lowermost zone, encountered gas in the middle zone and oil in the uppermost zone. San Leon is to be involved in future development planning and determining the location of the first new well to be drilled on the Oza Field.

More recently Decklar announced initial shipments of approximately 4,000 barrels of crude oil from the Oza-1 storage facilities.

8.5 Non-core assets being relinquished

The Company holds non-core interests in licences in Albania and Spain, which are in the process of being relinquished.

9. Financial information

The annual reports and accounts for the Company for the financial years ending 31 December 2021, 2020 and 2019 are incorporated by reference under the exemption set out in Rule 28 of the AIM Rules for Companies. These annual reports and accounts are available online at the Company's website: www.sanleonenergy.com.

The results for the financial year ended 31 December 2021 were announced on 8 July 2022.

10. Current trading and prospects

San Leon

The Directors believe that San Leon's holdings in MLPL and ELI and its MLPL Loan Note receivables provide a mix of future income, split between loan income expected to be received in the short-to-mid- term and equity dividend distributions from MLPL and ELI expected to be received in the mid- to-long- term. However, as described above in section 6 of this Part 1, upon completion of the MLPL Reorganisation, the MLPL Loan Notes will become intra group indebtedness and pursuant to the MLPL Reorganisation Agreement, Midwestern will be released from its obligations to guarantee performance of the MLPL Loan Notes.

In the year to date, the Company has only received US$0.3 million in repayments pursuant to the MLPL Loan Notes and no income from its existing debt or equity investments in ELI. This has been principally due to poor trading performance in Eroton and given that discussions with Midwestern regarding the Proposals have been taking place since 2021, has resulted in the MLPL Loan Notes being the subject of a series of publically announced conditional repayment waivers since July 2021. Therefore, the Company's cash position as at 8 July 2022 was US$0.2 million. To mitigate the Company's low cash position and provide funding for the Group's working capital requirements and financing for the Further ELI Investments, San Leon has entered into the New Facility for US$50 million, as described at paragraph 10.22 of Part 12 of this Document.

ELI has not generated income to pay dividends to its shareholders, including San Leon, and has not been in a position to repay creditors such as the Company. This is because it has not received revenue from Eroton as the ACOES has not yet been commissioned and therefore ELI has not yet started generating revenues. The completion and full commissioning of the ACOES will require further financing, including that provided within the New ELI Investments.

The Board believes that the recovery of the oil price during 2021 and into 2022 assists the business case for the Company's assets and their continued development. The expected near-term start-up of the barging component of the ACOES is considered to be an important step in unlocking the value in OML 18, and the Board looks forward to the pipeline portion of the ACOES coming online following its anticipated completion by the end of 2022.

All of the MLPL Reorganisation and ELI Reorganisation, together with the Further ELI Investments, are considered by the Directors to represent transformational transactions for the Company, which are expected to be cash flow positive in the near to medium term.

The Company will continue to monitor the performance of OML 18 and its other assets, and will consider pursuing any appropriate opportunities that may arise in the current market.

Further details of the Board's views regarding the prospects for the Company and ELI can be found in the Chairman's and Chief Executive's statements in the Company's annual report and accounts for the year ending 31 December 2021, which are incorporated into this Document by reference and are available online at the Company's website.

ELI - additional loan from San Leon

On 15 February 2022, the Company provided a further loan of US$2.0 million (the "Loan") to ELI Malta.

The Loan is a US$2.0 million shareholder loan at a coupon of 14% per annum over four years which is repayable quarterly following a one-year moratorium from the date of investment. The Loan was accompanied by a transfer to San Leon by Walstrand, ELI's largest shareholder, of shares in ELI which at the time represented a 2.0% equity interest, which San Leon will acquire at nominal value, representing a consideration payable of approximately US$91.

The Loan was to be used by ELI to facilitate a funding requirement to allow for completion of the mooring for the FSO, which the Board considered to be a critical step in the progression of the ACOES. Providing loans to Nigerian oil and gas related projects, which are often accompanied by associated equity interests, has been a key part of San Leon's business and strategy in recent years. San Leon has had debt and equity interests in ELI since August 2020 and, given the longer-term ongoing strategic importance of ELI's ACOES project to OML 18, the Board believed that it was important for San Leon to assist ELI Malta with the funding requirements for achieving its key project milestones.

San Leon has now lent a total of US$17.0 million to ELI with a coupon of 14% per annum and from which repayment instalments totalling US$6.0 million are now due. The Company has elected not to enforce the repayment of outstanding amounts, in recognition of the fact that ELI's development is critical to the success of OML 18 and ELI's cash balances at this time are required to progress the overall ACOES project. As announced on 9 August 2021, the Company has previously agreed with ELI that, should the New ELI Investments in ELI be made, then loan repayment instalments would be offset from any investment monies payable to ELI by San Leon under these new arrangements.

Decklar - loan notes and equity interest

On 27 January 2022, the Company announced that it had lent US$4.75 million to Decklar via 10% unsecured subordinated Decklar loan notes (bringing the total of such loan notes to US$5.5 million), which were accompanied by a 11% equity interest in Decklar, which was subscribed for at a nominal value. San Leon is in discussions to provide a further loan of US$2.5 million to Decklar on similar terms, in order to increase its shareholding in Decklar from 11% to 15%. San Leon will be entitled to one seat on the board of Decklar. In terms of the outlook for the remainder of FY 2022, the Directors anticipate that the export of oil from Oza will continue in 2022.

MLPL

As described above, MLPL has not recently received funds from its investment in Eroton, and repayments to San Leon pursuant to the MLPL Loan Notes have been the subject of a series of publicly announced conditional repayment waivers since July 2021. The Directors expect dividend flow to MLPL once the Proposed Transactions are completed and Eroton returns to budgeted operational performance and the later generates distributable income, as described below.

The Company expects to continue to have technical and other input into the OML 18 asset through its shareholdings and the Asset Management Agreement signed between San Leon Energy Nigeria and Eroton. MLPL and its subsidiary are effectively holding companies, although MLPL is the borrower from San Leon pursuant to the MLPL Loan Notes.

OML 18

Oil delivered from OML 18 to the Bonny terminal for sales was approximately 4,400 bopd in FY 2021 (21,100 bopd in FY 2020) and was affected by combined losses and downtime of approximately 79%. The FY 2021 figure was also affected by OPEC oil production quota restrictions, and some Covid-related delays. Field operations to boost production were largely put on hold, pending the start-up of the ACOES. Together, the losses, downtime, OPEC restrictions and Covid-related delays have caused the majority of the difference between gross production when there is minimal disruption to production, and oil is received at Bonny terminal for sales. In the three months to 31 March 2022, oil delivered from OML 18 to the Bonny terminal for sales was approximately 2,300 bopd as a result of similar issues to 2021.

Gas sales from OML 18 in FY 2021 averaged 29.6 million mmscf/d after downtime (32.7 mmscf/d in FY 2020). In the three months to 31 March 2022, OML 18's gas sales averaged approximately 41.7 mmscf/d after downtime, with the shortfall relative to the 50 mmscf/d (being the rate that is expected within the Notore Offtake Agreement) being due to maintenance activity at the Notore Chemical plant.

The Directors understand that the restarting of field operations on OML 18 should occur later in 2022.

ELI

The Directors believe that ELI is positioned for strong cash flow and potential organic growth, given its strategic positioning and proposed offering of efficient oil export facilities in a region which has suffered from material oil export losses and downtime. Such losses have increased significantly in 2021 and 2022, emphasising the business case for the new pipeline and FSO for OML 18 and third parties. Whilst there have been delays in installation of the ACOES, principally due to Covid, and delays in mooring the FSO, limited barging to the mother vessel has commenced in June 2022, with fuller barging operations from OML 18 to the FSO expected by ELI to commence during July 2022 and the pipeline being expected to be commissioned in late 2022.

The loan repayments due to San Leon from ELI were due to start in 2021 but have been delayed due to operational readiness of the FSO and ACOES being delayed. The Directors expect that ELI will be revenue generating in Q3 2022 with the commencement of barging operations, and while loan repayments to San Leon have been delayed, they should commence in the second half of 2022.

The budgeted cost to completion for the ACOES is approximately US$42 million which largely relates to the remaining unfunded capital commitments and other associated costs for pipeline development. The Directors understand that ELI plans for this to be funded by a cash backed stand by letter of credit of US$39.2 million from GTB, the disbursement of which is contingent upon performance and the achievement of milestones, with the remainder being provided by San Leon pursuant to the New ELI Investment.

Since 31 December 2021 ELI's net liabilities and net current liabilities have increased as ELI has continued to incur operating losses.

As stated in section 5 of this Part 1, ELI intends for its pipeline infrastructure to eventually earn fees from third parties for transporting and storing crude oil from the surrounding oil and gas fields in the Eastern Niger Delta, with the ACOES pipeline ultimately being intended to play a key role in resolving the local issues with oil production losses. ELI is in advanced negotiations with other third-party injectors for use of its pipeline and terminalling facilities.

Prospects for the Enlarged Group

The Directors believe that the Enlarged Group has considerable growth opportunities, both organically and via further acquisitions or production arrangements, and views the future with confidence. The Enlarged Group is expected by the Directors to benefit both from increased scale in existing projects, and also by enabling the increased application of San Leon's managerial and technical involvement in Eroton (via its increased ownership of MLPL, via the MLPL Reorganisation), through its Asset Management Agreement to provide such services to Eroton, and its involvement in ELI. Further details in relation to the Board's reasons for the Proposed Transactions and the strategy of the Company can be found in paragraph 3 of this Part 1.

Following completion of the MLPL Reorganisation and the ELI Reorganisation, it is the Company's intention to evaluate the potential for and benefits of, in due course, seeking a listing of its Ordinary Shares on the Official List, Premium Segment and the admission of those shares to the main market of the London Stock Exchange, subject to satisfaction of all regulatory requirements and approvals.

11. Board

The Board will not change as a consequence of Re-Admission and will therefore consist of the following individuals:

Mutiu Olaniyi Adio Sunmonu, Non-Executive Chairman (aged 67)

Oisín Brendan Fanning, Chief Executive Officer (aged 64)

Joel David Price, Chief Operating Officer (aged 50)

Julian Lester Tedder, Chief Financial Officer (aged 52)

John Davies Brown, Independent Non-Executive Director (aged 58)

Adekolapo Ademola, Non-Executive Director (aged 55)

Further details about the Directors and their business experience are set out in Part 6 of this Document. Adekolapo Ademola is not considered to be independent as he is a representative of Midwestern on the Company's Board.

12. Corporate governance

The Board is committed to maintaining high standards of corporate governance to ensure the Company is run effectively. In accordance with Rule 26 of the AIM Rules for Companies, the Company confirms that it has adopted the QCA Code. San Leon aims to conduct its business in an open, honest and ethical manner. The Board is accountable to shareholders for good corporate governance and has adopted the procedures set out below in this regard. Further details of the QCA Code and how the Company applies the principles are set out in Part 6 of this Document.

The Company has agreed with Midwestern that it will seek to identify and appoint an additional independent non-executive director in the 12 months following the publication of this Document. Aside from this, the Board does not expect for the Proposals to have a material impact on the Company's corporate governance and the Proposals are not expected to result in future changes in the Board and the Composition of its committees. Midwestern has the right to appoint a director to the Board under the Relationship Agreement. Details of the Relationship Agreement between Midwestern, Allenby Capital and the Company which is designed to ensure that the Group's business shall be managed for the benefit of the Shareholders as a whole and independently from Midwestern can be found in section 15 of this Part 1 and paragraph 10.2 of Part 12 of this Document.

13. Dividend policy

Dividend Policy

The Directors may consider the payment of dividends (or other methods of returning funds to Shareholders in a tax efficient manner) in the future when, in their view, the Company has sufficient distributable profits after taking into account the working capital needs of and investment opportunities available to the Enlarged Group. Ultimately, on that basis, the Board intends that, once the Company's conditional obligations pursuant to the Preference Shares have been discharged and following the commencement of payment of dividends, 50% of free cash flows would be returned to shareholders by way of dividends.

As a result of the Proposed Midwestern Reorganisation and the associated positive cash inflows anticipated from the increased initial indirect economic interest in OML 18, immediately prior to Re-Admission, the Company will, subject to shareholder approval at the EGM, issue the Preference Shares to Shareholders on the Company's register of members immediately prior to Re-Admission as part of the Subdivision. The Preference Shares will entitle the holders to receive the Preference Amount which is US$40,000,000 in aggregate and which shall on the date falling forty-two months after the date of issue of the Preference Shares and semi-annually thereafter, be increased by the Shortfall Amount. The Shortfall Amount is 5% of the amount by which the aggregate of all dividends paid to the holders of the Preference Shares is less than the Preference Amount immediately prior to such six-month interval.

The payment by the Company of any dividends, including the Preference Amount and the Shortfall Amount, is subject to the availability of distributable reserves and the declaration of a dividend by the Directors and as such there is no certainty that a dividend will be declared.

14. Share Schemes

The Company currently has two existing Share Schemes in place, being: (i) a share based payment scheme for executives and senior employees of the Group in place prior to 31 December 2012 (the "share based payment scheme"); and (ii) a formal unapproved share option plan (the "formal option plan") adopted during the first quarter of 2013. The formal option plan replaced the share based payment scheme and since its date of adoption, has governed all awards of share options made by the Company.

In addition, the Company has also adopted a new discretionary share plan called the San Leon Energy Long Term Incentive Plan (the "LTIP") and a plan for making awards to certain consultants to the Company (the "Consultant Plan"). Awards under the LTIP and the Consultant Plan may be satisfied by new Ordinary Shares, Ordinary Shares purchased in the market or by the transfer of Ordinary Shares held in treasury.

Further details of the Company's incentive arrangements and proposed awards to be granted pursuant to the LTIP on or around the date of this Document are set out in paragraph 6.2 of Part 12 of this Document.

15. Relationship Agreement

Midwestern will hold 403,633,865 New Ordinary Shares on Re-Admission and 477,416,400 New Ordinary Shares upon completion of the ELI Reorganisation Shares Admission, representing approximately 50.82% of the Initially Enlarged Ordinary Share Capital and 55.0% of the Fully Enlarged Ordinary Share Capital respectively based on the shares in issue at the date of this Document. Midwestern has entered into the Relationship Agreement with Allenby Capital and the Company pursuant to which it, amongst other things, undertakes to the Company and Allenby Capital that from the date of this Document and for so long as Midwestern, individually or together with the members of Midwestern and its group, is interested in more than 10% of the voting rights in the Company, it shall exercise its voting rights to procure and, in the case of other members of Midwestern's group, holding voting rights in the Company, use reasonable endeavours to procure, that the Group's business shall be managed for the benefit of the Shareholders as a whole and independently from Midwestern and members of the Midwestern's group and that all transactions and arrangements between: (i) the Company and (ii) Midwestern and the members of Midwestern's group will be at arm's length and on normal commercial terms. Midwestern has also provided further undertakings as to the composition of the Board, ensuring certain reserved matters are considered solely by Directors independent of Midwestern. For so long as Midwestern, individually or together with the members of Midwestern's group, is interested in more than 10% of the voting rights in the Company, it shall be entitled under the Relationship Agreement to nominate one non-executive Director to the Board. In addition, the Company has agreed with Midwestern that it will seek to identify and appoint an additional independent non- executive director in the 12 months following publication of this Document.

Whilst at the date of this Document Funds managed by Toscafund Asset Management LLP own

72.62 per cent. of the Existing Share Capital, there is not currently a relationship agreement with Toscafund. Following completion of the Midwestern Reorganisation it is expected that Funds managed by Toscafund Asset Management LLP will own 37.64 per cent. of the issued share capital of the Company and it is not proposed that a relationship agreement will be put in place with Toscafund or any funds managed by them.

Further details on the Relationship Agreement are set out in paragraph 10.2 of Part 12 of this Document.

16. Lock In Arrangements

The Locked-in Persons, being Midwestern and the Directors, have undertaken to the Company and Allenby Capital, that they will not sell or dispose of, except in certain limited circumstances permitted under Rule 7 of the AIM Rules for Companies, any of their respective interests in the New Ordinary Shares and Preference Shares, including any acquired after Re-Admission, at any time from the date of publication of this Document until the first anniversary of Re-Admission or, if sooner termination of the MLPL Reorganisation. In addition, Midwestern and the Directors have further undertaken that they will be subject to orderly market arrangements during the following twelve months after the initial one-year lock-in period.

Midwestern entered into two all-assets debentures with GTB dated 29 July 2013 (the "2013 GTB Debenture"), and 31 December 2019 (the "2019 GTB Debenture") (together the "GTB Debentures"). Under the 2013 GTB Debenture, Midwestern has charged, by way of way of first charge, all of Midwestern's undertaking and property (both present and future), such that a fixed charge is created on all of Midwestern's undertaking, goodwill, properties and assets (present and future), and in particular, "all stocks, shares and other securities now, or in the future belonging to Midwestern together with all dividends and other". Under the 2019 GTB Debenture, Midwestern has charged, among other charges, by way of fixed charge, among other items, all present and future shares, or rights or assets relating to such shares owned by Midwestern in its Subsidiaries (as defined under section 338 of the Companies and Allied Matters Act, Cap. C20, Laws of the Federation of Nigeria, 2004). As such, Midwestern's shares in the Company are subject to the GTB Debentures and enforcement of such debentures will not be subject to the lock-in. Any receiver appointed under the GTB Debentures has broad powers, including the power to sell and or/dispose of any secured assets.

Enforcement by GTB of the GTB Debentures and subsequent sales of Midwestern's shares in the Company could potentially have a material adverse effect on the share price of the Company, as Midwestern's holding in the Company upon Re-Admission will represent a very substantial amount of the Company's New Ordinary Shares.

Further details of the lock-in and orderly market arrangements are set out in paragraph 10.1 of Part 12 of this Document.

17. Takeovers UK Takeover Code

The Company is incorporated in Ireland and the place of central management and control of the Company is located outside of the UK, the Channel Islands and the Isle of Man. Accordingly, as the Company is one to which paragraph 3(a)(ii) of the introduction to the UK City Code applies, the Directors believe that the Company is not subject to the UK City Code and Shareholders will not be afforded any protections under the UK City Code.

If circumstances change, including if changes to the Board are made, the Company will consult with the UK Takeover Panel to ascertain whether this will affect the central place of management of the Company. If the UK Takeover Panel determines that, as a result of such changes, the place of central management of the Company is located in the UK, the Channel Islands or the Isle of Man such that the UK City Code then becomes applicable to the Company, an announcement will be made.

Irish Takeover Rules

The Company is subject to the Irish Takeover Rules and Shareholders are therefore afforded protections under the Irish Takeover Rules. A summary of these Irish Takeover Rules relating to mandatory bids is set out in paragraph 16 of Part 12 of this Document.

Waiver of the obligations to make a general offer under Rule 9 of the Irish Takeover Rules in respect of the MLPL Reorganisation and the ELI Reorganisation

Midwestern will participate in the MLPL Reorganisation and the ELI Reorganisation (together the Proposed Midwestern Reorganisation). Following the completion of the Proposed Midwestern Reorganisation, the maximum shareholdings of Midwestern and the Toscafund Managed Funds and their proposed maximum voting rights in the Initially Enlarged Ordinary Share Capital and the Fully Enlarged Ordinary Share Capital will be as set out in table 7 below.

Table 7: maximum shareholdings of Midwestern and the Toscafund Managed Funds and their proposed maximum voting rights in the Initially Enlarged Ordinary Share Capital

and the Fully Enlarged Ordinary Share Capital

Note: the percentages in this table in each case exclude the Preference Shares and assume that no options or other convertible securities are exercised prior to allotment of the MLPL New Shares and the ELI New Shares.

The allotment of shares pursuant to the MLPL Reorganisation and the ELI Reorganisation give rise to certain considerations under the Irish Takeover Rules. Brief details of the Irish Takeover Rules and some of the protections that they afford to Shareholders are described below.

The Irish Takeover Rules are administered by the Irish Takeover Panel. The Irish Takeover Rules operate to ensure fair and equal treatment of shareholders in relation to takeovers and other relevant transactions, and also provide an orderly framework within which takeovers are conducted. The Irish Takeover Rules apply to all takeovers and certain other transactions, where the offeree company is, among others, an AIM-listed public limited company incorporated in Ireland. San Leon is such a company and accordingly its Shareholders are entitled to the protections afforded by the Irish Takeover Rules.

For the purposes of the Irish Takeover Rules, a person or group of persons acting in concert "controls" a relevant company that is subject to the Irish Takeover Rules, such as San Leon where that person or group of persons acting in concert acquires securities of the company that confer in aggregate not less than 30 per cent, of the voting rights of that company. Under Rule 9.1 of the Irish Takeover Rules, except with the consent of the Irish Takeover Panel, if:

(a) any person, or any persons acting in concert, acquire control of a relevant company that is subject to the Irish Takeover Rules, such as San Leon; or

(b) any person, or any persons acting in concert, who control a relevant company such as the Company acquire within any period of 12 months additional securities of such an amount as will increase by more than 0.05 per cent. the aggregate percentage of the voting rights in that company conferred by the securities held by it or them,

such person or, in the case of persons acting in concert, such one or more of those persons as the Irish Takeover Panel shall direct shall extend an offer, in accordance with the requirements of the Irish Takeover Rules, to the holders of each class of equity share capital of the relevant company, whether or not such class confers voting rights, and also to the holders of each other class of transferable voting securities of the company. This is subject to the caveat that a single holder of securities who holds securities which confer more than 50 per cent. of the voting rights in a relevant company may acquire additional securities of that company without incurring an obligation under Rule 9.1. Any such offers made by the offeror for different classes of share capital of the relevant company shall be comparable.

Except with the consent of the Irish Takeover Panel and subject as otherwise provided by Rule 9.4 of the Irish Takeover Rules, an offer made under Rule 9 shall in respect of each class of shares the subject of the offer be in cash, or be accompanied by a cash alternative offer, at a price per share which shall not be less than the highest value of the price per share paid by the offeror or any person acting in concert with it for shares of the offeree of that class during the period beginning 12 months prior to the announcement by the offeror of a firm intention to make that offer and ending on the date on which the offer closes for acceptance.

As set out in table 7 above, on the allotment of the MLPL New Shares, since the percentage of the total Initially Enlarged Ordinary Share Capital held by Midwestern would be not less than 30 per cent., this would oblige Midwestern to make a mandatory offer pursuant to Rule 9 of the Irish Takeover Rules for the remaining issued ordinary share capital of the Company not held by Midwestern unless a waiver of such obligation were to be granted by the Irish Takeover Panel.

Following the allotment of the MLPL New Shares on the basis set out above, Midwestern will hold securities in the Company conferring in the aggregate 50.82 per cent. of the voting rights in the Company. As a result, Midwestern by virtue of being a single holder of more than 50 per cent. of the voting rights in the Company, will then be permitted under the Irish Takeover Rules to increase its holding of securities in the Company without incurring any obligation to make an offer under Rule 9 of the Irish Takeover Rules.

Waiver of Rule 9 obligation

The conditional waiver granted by the Irish Takeover Panel on the terms set out in this Document of any obligation of Midwestern that may arise pursuant to Rule 9 of the Irish Takeover Rules to make an offer for the remaining ordinary shares and Preference Shares in the Company not already owned by Midwestern as a result of the allotment of the MLPL New Shares to Midwestern is referred to as the "Rule 9 Waiver".

Under Note 1 of the Notes on Possible Waivers of and Derogations from Rule 9 contained in the Irish Takeover Rules, the Irish Takeover Panel may, in certain circumstances, waive the requirement for a general offer to be made in accordance with Rule 9 of the Irish Takeover Rules (a "Rule 9 Offer") if, inter alia, those shareholders who are independent of the person who would otherwise be required to make such an offer (in this case, Midwestern) and of any person acting in concert with that person (the "Independent Shareholder(s)") pass an ordinary resolution on a poll at a general meeting of the shareholders of the Company approving such a waiver (the "Rule 9 Waiver Resolution").

Pursuant to a letter dated 29 March 2022 from the Irish Takeover Panel to Whitney Moore LLP, the Irish Takeover Panel stated that having regard to the very specific and exceptional circumstances of this case, it decided to grant a waiver of Rule 9 in respect of any mandatory offer obligation which may be acquired by Midwestern as a result of the New Ordinary Shares in the Company being issued to it pursuant to the Proposed Midwestern Reorganisation subject to:

(i) the Toscafund Managed Funds holding securities in the Company conferring 50 per cent. or more of the voting rights of the Company which would be capable of being cast on a Rule 9 Waiver Resolution confirming in writing to the Irish Takeover Panel that they approve of the Rule 9 Waiver and would vote in favour of any resolution to that effect at a general meeting of the Company. In this regard, Toscafund has provided a confirmatory letter to the Irish Takeover Panel setting this out (see below);

(ii) appropriate text being included in the Company's Re-Admission document, to be approved in advance by the Irish Takeover Panel, setting out the Irish Takeover Panel's decision, the basis for it and the confirmations provided to the Irish Takeover Panel by Toscafund; and

(iii) Midwestern providing the Irish Takeover Panel with confirmation that there are no disqualifying transactions as referred to in note 3 on the Whitewash Guidance Note of the Irish Takeover Rules. Midwestern has provided such a confirmation to the Irish Takeover Panel.

In deciding to grant the waiver, the Irish Takeover Panel noted inter aliathat the Company Shareholders will be required to approve the Proposed Midwestern Reorganisation at the EGM and will be provided in that regard with a Re-Admission document (being this Document) containing all of the relevant information in relation to the transactions.

Confirmations

Toscafund, on behalf of the Toscafund Managed Funds (being the holders holding more than 50 per cent. of the Company's shares capable of being voted on a resolution to approve a Rule 9 Waiver Resolution (the "Independent Shares")) has confirmed the following to the Irish Takeover Panel:

1. the Toscafund Managed Funds are the beneficial owner of 326,736,082 Ordinary Shares in the issued share capital of the Company, representing at the date hereof 72.62 per cent. of the voting rights in the Company and has absolute discretion over the manner in which the related shares are voted and voting rights are exercised. These shares are held free of all liens, pledges, charges and encumbrances;

2. that: (a) there is no connection between the Toscafund Managed Funds and Midwestern; and (b) the Toscafund Managed Funds are an Independent Shareholder of the Company, as defined above; and

3. that, in connection with the Proposed Midwestern Reorganisation:

a. the Toscafund Managed Funds consent to the Irish Takeover Panel granting a waiver from the obligation for Midwestern to make a Rule 9 Offer to the shareholders of the Company;

b. the Toscafund Managed Funds, being the Independent Shareholder holding more than 50 per cent. of the voting rights capable of being exercised on a Rule 9 Waiver Resolution to approve the waiver from the obligation for Midwestern to make a Rule 9 Offer, have consented to the Irish Takeover Panel dispensing with the requirement that the waiver

a.

from such obligation be conditional on a Rule 9 Waiver Resolution being approved by a vote of Independent Shareholders of the Company at a general meeting; and

c. the Toscafund Managed Funds would vote in favour of a Rule 9 Waiver Resolution to waive the obligation for Midwestern to make a Rule 9 Offer were one to be put to the Independent Shareholders of the Company at a general meeting.

In giving the confirmations referred to above, Toscafund acknowledges:

1. that, as a result of the Tosca Managed Funds (being the Independent Shareholder holding more than 50% of the voting rights capable of being exercised on a Rule 9 Waiver Resolution) giving such confirmations, the Irish Takeover Panel would grant a waiver from the obligation for Midwestern to make a Rule 9 Offer without the requirement for the waiver to be approved by Toscafund Managed Funds as the Independent Shareholder at a general meeting of the shareholders of the Company; and

2. that if no Rule 9 Waiver Resolution is included in the resolutions at the EGM to be held in connection with the Proposed Midwestern Reorganisation, there would be no requirement for the Company either (i) to obtain and make known to its shareholders competent independent advice under Rule 3 of the Irish Takeover Rules on the Proposed Midwestern Reorganisation and the waiver of the obligation for Midwestern to make a Rule 9 Offer; or (ii) to publish a circular to shareholders of the Company in compliance with the Whitewash Guidance Note in connection with that matter (albeit that a shareholder circular and re-admission document would be required to be published pursuant to the AIM Rules).

On the basis that the confirmations from Toscafund and Midwestern referred to above have been provided to the Irish Takeover Panel, all of the conditions attaching to the granting of the Rule 9 Waiver in respect of any obligation on Midwestern to make a general offer under Rule 9 as a result of the New Ordinary Shares in the Company to be issued to it pursuant to the Proposed Midwestern Reorganisation have now been satisfied.

18. Related party transactions under the AIM Rules

Midwestern is a related party of the Company for the purposes of the AIM Rules for Companies by virtue of Midwestern holding more than 10% of the Existing Ordinary Shares in the Company and the level of Midwestern's current interest in MLPL. The MLPL Reorganisation, and the ELI Reorganisation, are therefore related party transactions under the AIM Rules for Companies. The Directors of San Leon (excluding Adekolapo Ademola who is not considered to be independent as he is a representative of Midwestern on the Company's board) consider, having consulted with the Company's nominated adviser, Allenby Capital, that the terms of the MLPL Reorganisation, and the ELI Reorganisation are fair and reasonable insofar as the Company's shareholders are concerned.

Following publication of this Document, the Company proposes to grant awards pursuant to the LTIP over 18,938,209 Ordinary Shares (representing 2.18 per cent. of the Fully Enlarged Ordinary Share Capital) to certain of its employees and the Board, details of which are set out in paragraph 6.2.16 of Part 12 of this Document. The issuance of these awards to the Directors will be considered to be a related party transaction under Rule 13 of the AIM Rules for Companies and the Company will announce further details in relation to this separately in due course once the issuance of these awards has occurred.

19. Taxation

General information relating to Irish and UK taxation with regards to Re-Admission is summarised in Part 10 of this Document.

This Document has been prepared on the basis of current legislation, rules and practice and the advisers' interpretation thereof. Such interpretation may not be correct and it is always possible that legislation, rules and practice may change. Any changes in legislation and in particular any changes to bases of taxation, tax relief and rates of tax may affect the availability of reliefs.

A Shareholder who is in any doubt as to their personal tax position, or is subject to tax in a jurisdiction other than the UK or Ireland, should consult their own independent financial advisers immediately.

20. Nigeria country, regulatory and legislative environment

Summary information on Nigeria and its regulatory and legislative framework for the oil and gas market is set out in Part 5 of this Document.

21. Re-Admission to AIM and dealings

The MLPL Reorganisation, the ELI Reorganisation and the Further ELI Investments constitute a 'reverse takeover' under the AIM Rules for Companies and are therefore dependent upon the approval of Shareholders being given at the EGM, details of which are set out below.

Resolutions will be proposed at the EGM to approve the Proposals. If the Resolutions are duly passed at the EGM, then upon Re-Admission, the admission of the Company's Existing Ordinary Shares to trading on AIM will be cancelled (immediately prior to Re-Admission) and the Initially Enlarged Ordinary Share Capital will be admitted to trading on AIM. For uncertificated holders, Euroclear Bank accounts, will be credited (as applicable) with New Ordinary Shares and Preference Shares on the day of Re-Admission. For certificated holders only, dispatch of share certificates for New Ordinary Shares and Preference Shares should occur no later than 14 days following Re-Admission. On Re-Admission, share certificates in respect of the Existing Ordinary Shares will cease to be valid and they should be destroyed on receipt of the appropriate share certificate representing the New Ordinary Shares. Transfers between the date on which the Subdivision becomes effective and the date on which share certificates in respect of the New Ordinary Shares are sent out will be certified against the register if required. No temporary or renounceable documents of title in respect of any of the New Ordinary Shares will be issued. It is anticipated that the Company will publish a Supplementary Admission Document ahead of Re-Admission. Re-Admission will constitute the admission of the enlarged entity pursuant to Rule 6 and Rule 14 of the AIM Rules for Companies and will effect the completion of the reverse takeover.

Application will be made by the Company for the Initially Enlarged Ordinary Share Capital to be admitted to trading on AIM and it is anticipated, following the requisite shareholder and NUPRC's Approval, Ministerial Consent, NFCCPC Negative Clearance and the satisfaction of the other conditions precedent of MLPL Reorganisation as set out in Part 2 of this Document that Re-Admission will become effective and that trading in the Initially Enlarged Ordinary Share Capital on AIM will commence in Q4 2022. It is anticipated that the Further ELI Investments will be completed in Q3 2022.

However, if the MLPL Reorganisation is not completed, the Existing Ordinary Shares will continue to be traded on AIM, and the Subdivision will not occur and the New Ordinary Shares will not be issued or admitted to trading on AIM. San Leon would retain a 40% equity interest in MLPL with Midwestern continuing to own the remaining interest in MLPL. The outstanding MLPL Loan Notes would be payable by MLPL (or by Midwestern as guarantor of the MLPL Loan Notes) to San Leon within 90 days of termination of the MLPL Reorganisation Agreement. If the Eroton OML 18 Transactions are not completed, Eroton would retain a 27% effective economic interest in the OML 18 licence, Sahara and Bilton would retain effective economic interests in the OML 18 licence of 16.2% and 1.8% respectively and the Eroton Litigation as set out in paragraph 3.4 of Part 2 of this Document would continue.

Working Capital effect

The Directors have prepared a detailed cash flow forecast for the Group for the period from 1 June 2022 to 31 December 2023.

The principal assumptions underlying the cash flow forecast and the availability of finance to the Group are as follows:

(i) the proposed reorganisation to consolidate Midwestern's shareholdings in: i) the Company; and

ii) MLPL into a single shareholding in the Company completes in the second half of 2022. The Proposed Transaction also comprises, inter alia, a proposed consolidation of Midwestern's indirect debt and equity interests in ELI Malta with those of the Company, as well as further new debt and new and existing equity investments to be made by San Leon pursuant to the Further ELI Investments;

(ii) Eroton acquires an additional 18% interest in OML 18 from two of the other partners in OML 18, thereby taking Eroton's interest in OML 18 to 45%. This is subject, inter alia, to: i) agreeing documentation; ii) finalising bank financing; and iii) receiving the relevant regulatory consents in Nigeria;

(iii) the New Facility of $50 million has been secured to finance the Proposed Transaction;

(iv) elimination of the MLPL Loan Notes on completion of the Proposed Transaction;

(v) under the Asset Management Agreement with Eroton, San Leon receives $500,000 per month for technical and financial advisory services following completion of the Proposed Transaction;

(vi) repayments from ELI of loan notes of US$37.6 million during 2022 and 2023;

(vii) repayment from Eroton under the Master Services Agreement of $3m during 2022; and

(viii) a further loan of $2.5 million is given to Decklar in relation to its Oza investment pursuant to current discussions.

Due to the Proposed Transaction not having completed at the date of this Document there is an inherent material uncertainty that completion will not occur as anticipated.

The Group has modelled various other scenarios assuming the Proposed Transaction does not complete and given the Group's well understood cost base, the principal uncertainty if the Proposed Transaction does not complete relates to the quantum and timing of receipt of interest and capital repayments on the MLPL Loan, which would remain in place, and the loan Notes with ELI.

It was originally envisaged that the MLPL Loan Note payments due to the Group would be sourced by MLPL from the receipt of dividends through its indirect interest in Eroton via Martwestern. These dividends have not been received to date and consequently MLPL has entered into loan arrangements in order to be able to make Loan Note payments to the Company. In the absence of the dividend payments, MLPL will be reliant on further advances under the loan arrangement and in turn being able to make Loan Note payments to the Company. The Company has no obligation arising from the loan arrangements entered into by MLPL.

The loan repayments due from ELI were due to start in 2021 but have been delayed due to operational readiness of the FSO and ACOES project being delayed. The Directors have a reasonable expectation that ELI will be revenue generating imminently with the commencement of barging operations, and while loan repayments have been delayed, they should commence in the second half of 2022.

Due to the uncertainty on timing of future cashflows the MLPL Loan Notes and ELI loan notes have both been credit impaired in the annual report and accounts of the Company for the year ended 31 December 2021.

In the ultimate downside scenario where no repayments are received from MLPL and ELI, the New Facility can be drawn by the Company to facilitate completion of the Further ELI Investments, with the remaining balance being used for general corporate purposes. In this scenario the working capital requirements of the Group can be met for the 12-month period from the date of approval of the financial statements, although a reduction to administrative costs is required in 2023, which the Directors believe is achievable and within their control.

However, while the working capital requirements of the Group can be met for the 12-month period, the Directors believe that the continued viability of the Group and Company into the future is dependent on the completion of the Proposed Transaction. As such, the completion of the Proposed Transaction creates significant uncertainty upon the Group and Company's ability to continue as a going concern beyond the 12-month period. The Directors' have concluded that this represents a material uncertainty which may cast significant doubt upon the Group and Company's ability to continue as a going concern and that, therefore, the Group and Company may be unable to continue realising its assets and discharging its liabilities in the normal course of business.

The Risks for the Company in the event that the MLPL Reorganisation is not completed are set out in paragraph 5.1 of Part 4 of this Document.

22. Further details of the Preference Shares and the Deferred Shares

Preference Shares

In addition to the payment of the Preference Amount of US$40,000,000 and any Shortfall Amount as detailed in paragraph 11.4 of Part 4 of this Document, the Preference Shares confer the following rights on their holders and have the following attributes:

(a) the right to the payment of the preference dividend in priority to the payment of dividends or on a winding up of the Company right to the payment of the preference dividend before the repayment of capital to the holders of any other class or classes of shares in the Company;

(b) they may be freely transferred;

(c) they confer no right to attend, speak or vote at any general meeting of the Company;

(d) they will not be listed or traded on any stock exchange or other trading facility; and

(e) on the payment in full of the Preference Amount and any Shortfall Amount, each Preference Share will automatically convert into one Deferred Share.

Where title to Ordinary Shares is currently held in certificated (i.e. paper) form, the title to the Preference Shares resulting from the Subdivision can continue to be held in certificated form and paper certificates will be issued to the holders. It is expected that the Preference Shares will be issued to Euroclear Nominees and that the Preference Shares will be held in the Euroclear System for underlying holders and, where such holders are not EB Participants, as CDIs via the CREST System in the same manner as New Ordinary Shares. The Preference Shares may be withdrawn from the Euroclear System and holders may be entered on the register of members of the Company. Holders may be issued with a share certificate, in which event transfer and settlement of the Preference Shares will take place via the Company registrars by physical delivery of paper share transfers and certificates, which may mean a delay in effecting transfer and settlement when compared to settlement via the Euroclear System or CREST System.

It is emphasised that there is no intention to seek a listing or admission to trading on AIM or any other stock exchange for the Preference Shares.

Deferred Shares

Following the payment of the Preference Amount, the Preference Shares will convert into Deferred Shares. The rights attached to the Deferred Shares are very limited in nature and they have virtually no economic or participation rights in the Company. The most significant attributes of the Deferred Shares are as follows:

(a) no right to participate in the profits of the Company either by the payment of dividend or any return of capital save that it can participate in a return of capital only after the holder of every New Ordinary Share has received the sum of €10,000,000 on each such share;

(b) confer no right to attend, speak or vote at any general meeting of the Company;

(c) will not be listed or traded on any stock exchange or other trading facility;

(d) save for transmission on death or bankruptcy and save for transfer from Euroclear may not be freely transferred;

(e) no share certificates shall be issued in respect of Deferred Shares; and

(f) may be redeemed by the Company for an aggregate redemption price of €1 in respect of all the Deferred Shares in issue in the Company or may be acquired by the Company or surrendered for nil consideration.

It is emphasised that there is no intention to seek a listing or admission to trading on AIM or any other stock exchange for the Deferred Shares.

New Memorandum and Articles of Association

A copy of the New Memorandum and Articles of Association in the form proposed to be amended by Resolution 4 (marked to highlight the proposed changes) is available and (will be so available until the conclusion of the EGM) on the Company's website www.sanleonenergy.com/ and at its registered office at 2 Shelbourne Buildings, Crampton Avenue, Dublin 4 D04 W3V6, Ireland and will also be available at the EGM for at least fifteen minutes before, and for the duration of, the EGM. With a view to being responsible and cautious in the light of the ongoing risk of COVID and also with a view to prioritising the health and safety of our Shareholders and employees, Shareholders are requested not to attend at the address above to inspect the New Memorandum and Articles of Association but instead to inspect them on the Company's website.

23. Euroclear Bank & Euroclear System, CREST & CREST Depository Interests

23.1 New Ordinary Shares and Preference Shares

(a) Electronic settlement of transactions in the New Ordinary Shares or Preference Shares of the Company following Re-Admission may take place within the Euroclear System or the CREST System. While trades may be settled in the Euroclear System or the CREST System, holders who wish to withdraw their shares from the Euroclear System and become registered as holders and (in the case of the Ordinary Shares, for so long as required by law before implementation in Ireland of the provisions of CSDR relating to dematerialisation of traded shares) retain share certificates will be able to do so.

(b) Under the Euroclear System, instead of holding an ordinary share or a Preference Share a holder has a co-ownership right to a corresponding interest in a pool of the ordinary shares or as the case may be, Preference Shares which are registered in the name of Euroclear Nominees and admitted in the Euroclear System. The holder's interest in such pool of ordinary shares is governed and regulated by Belgian law and is, accordingly referred to as the Belgian Law Rights. Further details of Belgian Law Rights are set out in paragraph 2 of Part 11 and in the EB Rights of Participants Document. Alternatively, a holder may hold their Belgian Law Rights through a CREST Depository Interest (or CDI), as set out in paragraph 3 of Part 11. Settlement of such trades takes place in the CREST System through a CDI representing the Belgian Law Rights.

(c) Persons who hold their interests in ordinary shares as Belgian Law Rights under the Euroclear System or as CDIs under the CREST System, should consult with their stockbroker or other intermediary at the earliest opportunity for further information on the processes and timelines for submitting proxy votes for the EGM through the respective systems. For voting services offered by custodians holding Irish corporate securities directly with Euroclear Bank, please contact your custodian.

(d) As the Preference Shares do not confer any voting rights on their holders, persons who hold their interests in Preference Shares as Belgian Law Rights under the Euroclear System or as CDIs under the CREST System will not have any ability to use the processes and mechanisms of such systems to exercise voting rights.

(e) It is emphasised that no application will be made of the Preference Shares to trading on AIM or any other stock exchange.

24. Valuation Report

The consideration being provided by Midwestern to San Leon in subscribing pursuant to the MLPL New Shares Subscription for the MLPL New Shares is the MLPL Reorganisation Loan Notes being a loan note to be issued by Midwestern in favour of San Leon in an amount equal to the value of Midwestern's 60% equity interest in MLPL and the benefit of a US$239.9 million receivable owed to Midwestern by MLPL to be transferred to San Leon Energy Nigeria. To the extent that such consideration may be deemed to be non-cash consideration under the Irish Companies Act 2014 San Leon has commissioned BDO LLP to produce a valuation report (the "MLPL Valuation Report") which will be required to be sent to Midwestern, before issuing the MLPL New Shares to Midwestern. Under section 1028 of the Irish Companies Act 2014 the MLPL Valuation Report must be made by an independent person, being a person qualified at the time of the report to be appointed or to continue to be the statutory auditor of San Leon.

The Irish Companies Act 2014 sets out the contents of the MLPL Valuation Report regarding the MLPL New Shares, which are:

(a) the nominal value and the amount of any premium payable on the shares;

(b) the description of the consideration and, as respects the consideration that the independent person itself has valued, a description of that part of the consideration, the method used to value it and the date of the valuation; and

(c) the extent to which the nominal value and any premium are to be treated as paid up by the consideration and in cash.

The MLPL Valuation Report will contain a note by the independent person:

(a) in the case of a valuation made by another person, that it appeared to the independent person reasonable to arrange for it to be so made, or to accept a valuation so made;

(b) irrespective of whether the valuation has been by that person or the independent person, that the method of valuation was reasonable in all the circumstances;

(c) that it appears to the independent person that there has been no material change in the value of the consideration in question since the valuation; and

(d) that on the basis of the valuation the value of the consideration, together with any cash by which the nominal value of the shares or any premium payable on them is to be paid up, is not less than so much of the aggregate of the nominal value and the whole of any such premium as is treated as paid up by the consideration and any such cash.

A copy of the MLPL Valuation Report will be obtained by San Leon during the six months immediately preceding the date of the allotment of the MLPL New Shares and a copy of the MLPL Valuation Report has to be sent to Midwestern before the MLPL New Shares are issued. San Leon will deliver a copy of the MLPL Valuation Report to the Registrar of Companies in Ireland at the same time that it delivers to the Registrar particulars of the allotments of those shares being within 30 days after the date of allotment.

The consideration to be provided by Midwestern in subscribing pursuant to the ELI New Shares Subscription Agreement for the ELI New Shares is the ELI Reorganisation Loan Notes, being a loan note issued by Midwestern in favour of San Leon in an amount equal to the value of 13.77% of the entire issued share capital of ELI Malta and the loan receivable of US$15,300,000 from ELI Malta to be transferred to San Leon ELI. To the extent that such consideration may be deemed to be non-cash consideration under the Irish Companies Act 2014 San Leon has as a precaution commissioned BDO to produce a valuation report (the "ELI Valuation Report") which will be required to be sent to Midwestern, before issuing the ELI New Shares to Midwestern. As with the MLPL Valuation Report, the ELI Valuation Report must be made by an independent person, being a person qualified at the time of the report to be appointed or to continue to be the statutory auditor of San Leon. The contents and the arrangements regarding the delivery to Midwestern and the Registrar of Companies of the ELI Valuation Report will be similar to those set out above in relation to the MLPL Valuation Report.

The number of shares to be subscribed for by Midwestern as part of the MLPL Reorganisation has been agreed and fixed between Midwestern and the Company and is not subject to adjustment by reference to the market price of the Ordinary Shares or New Ordinary Shares.

Accordingly, in order for the MLPL Reorganisation to proceed, under the Irish Companies Act 2014, the market price of the New Ordinary Shares on the date of allotment of the MLPL New Shares must be not greater than the value per share to be recorded in the MLPL Valuation Report. Similarly, in order for the ELI Reorganisation to proceed, the MLPL Reorganisation must complete and the market price of the New Ordinary Shares on the date of allotment of the ELI New Shares must be not greater than the value per share to be recorded in the ELI Valuation Report.

It should be noted that in the event that the value of the consideration to be received by San Leon in consideration of the allotment of (i) the MLPL New Shares on the date of allotment is lower than the nominal value of the MLPL New Shares which will be EUR0.005 per share, the MLPL New Shares will not be allotted and the MLPL Reorganisation will not complete and/or (ii)

the ELI New Shares on the date of allotment is lower than the nominal value of the ELI New Shares which will be EUR0.005 per share, the ELI New Shares will not be allotted and the ELI Reorganisation will not complete. This is because under the Irish Company Act 2014 the amount of the consideration to be received by the Company in consideration of the allotment of the shares must exceed the nominal value of the shares.

25. Further information

This Document should be read in its entirety. Your particular attention is drawn to:

• This Part 1, which includes background to the Proposals and a summary of the Enlarged Group's assets;

• Part 2 of this Document which contains further information on the Midwestern Reorganisation;

• Part 3 of this Document which contains further information on the Further ELI Investments

• Part 4 of this Document which contains risk factors relating to: (i) the Company; (ii) the oil and gas markets; (iii) OML 18 and Nigeria; and Re-Admission;

• Part 5 of this Document, which contains country information focusing on Nigeria's regulatory and legislative framework for the oil and gas market;

• Part 6 of this Document which contains details of the Board and the Group's corporate governance arrangements;

• Part 7 of this Document, which contains a CPR in respect of OML 18;

• Part 8A of this Document, which contains financial information on the Company (incorporated by reference);

• Part 8B of this Document, which contains financial information on MLPL;

• Part 8C of this Document, which contains financial information on ELI;

• Part 9 of this Document, which contains an 'Unaudited pro forma net asset statement' illustrating the effect of the Proposals and the New Facility on the net assets of the Group as if the Proposals and New Facility had been completed on 31 December 2021;

• Part 10 of this Document, which contains a summary of Irish and UK taxation;

• Part 11 of this Document, which includes information regarding the settlement of the New Ordinary Shares, the Euroclear System and CREST System;

• Part 12 of this Document, which includes additional information on the Company and the Enlarged Group; and

• Part 13 of this Document, which contains the Notice of EGM.

26. Extraordinary General Meeting

Set out in Part 13 of this Document is a notice convening an EGM to be held at the Herbert Park Hotel, Ballsbridge, Dublin 4, D04 R2T2, Ireland at 11:30 am on 5 August 2022. A summary and explanation of the Resolutions is set out below. Please note that the summary and explanation is not the full text of the Resolutions and Shareholders should review the full text of the Resolutions before deciding whether or not to approve them.

At the EGM of the Company to be held on 5 August 2022, authority will be sought from Shareholders,

inter alia, to:

(i) approve the MLPL Reorganisation and ELI Reorganisation;

(ii) approve the Further ELI Investments;

(i)

(iii) sub-divide each issued Existing Ordinary Share into one New Ordinary Share and one Preference Share;

(iv) sub-divide each of the 224,956,513 unissued Existing Ordinary Shares into two Deferred Shares;

(v) sub-divide each of the 2,172,536,486 unissued Existing Ordinary Shares into two New Ordinary Shares;

(vi) grant authority for the directors to allot New Ordinary Shares (including the New Shares); and

(vii) grant authority to waive statutory pre-emption rights in respect of, inter alia, the MLPL New Shares and the ELI New Shares.

A summary of the resolutions proposed at the EGM is as follows:

Resolution 1 - Ordinary Resolution

Under the AIM Rules for Companies, the MLPL Reorganisation, the ELI Reorganisation and the Further ELI Investments constitute a reverse takeover. An ordinary resolution will therefore be proposed in order to:

(i) authorise the proposed completion of the transfer to the Company of 60% of the shares in MLPL and the transfer to the Company of Midwestern's interest in ELI and to approve such transfers as reverse-takeovers in accordance with the requirements of Rule 14 of the AIM Rules for Companies. This will enable the Company to obtain a 44.1% initial indirect economic interest in the OML 18 block, onshore Nigeria and a 27.093% interest in ELI; and

(ii) authorise the proposed completion of the Further ELI Investments by the Company in ELI and to approve the Further ELI Investments as a reverse-takeover in accordance with the requirements of Rule 14 of the AIM Rules for Companies. This will enable the Company to obtain an interest of up to 50.64% in ELI and San Leon becoming a significant holder of loans to ELI.

Resolution 2 - Special Resolution

A special resolution will be proposed to result in the subdivision of the 449,913,026 Existing Ordinary Shares in issue in the Company into one New Ordinary Share and creation of one Preference Share, to subdivide each of the 224,956,513 of the unissued Existing Ordinary Shares in the Company into two Deferred Shares, and to subdivide each of the 2,172,536,486 being the balance of the unissued Existing Ordinary Shares in the Company into two New Ordinary Shares, in each case subject to the rights set out in the New Memorandum and Articles of Association.

This will result in each holder of one Existing Ordinary Share immediately prior to the Subdivision holding one New Ordinary Share and one Preference Share.

Resolution 3 - Special Resolution

A special resolution will be proposed to amend the capital clauses in the Existing Memorandum and Articles of Association to provide for the share capital to be divided into New Ordinary Shares, Preference Shares and Deferred Shares.

Resolution 4 - Special Resolution

A special resolution will be proposed that the New Memorandum and Articles of Association in the form produced to the EGM and which have been available for inspection at the registered office of the Company and on the Company's website since the date of the Notice of EGM, be adopted in substitution for the Existing Memorandum and Articles of Association of the Company. The New Memorandum and Articles of Association will contain the rights attaching to the Preference Shares and

the Deferred Shares as set out in paragraph 22 of this Part 1 above and the changes to the share capital as described in Resolution 2 above.

Resolution 5 - Ordinary Resolution

An ordinary resolution will be proposed so as to give the Directors authority, pursuant to section 1021 of the Irish Companies Act 2014, in place of the existing authority granted at the AGM in 2021, to exercise all the powers of the Company to: (i) allot the New Shares (ii) allot up to an additional amount of €1,446,571.68 being 33% of the issued ordinary share capital of the Company as increased by the allotment of the MLPL New Shares and the ELI New Shares. This authority will commence immediately prior to Re-Admission on and shall expire at the conclusion of the AGM of the Company in 2023 or, if earlier, the date which is fifteen months from the date of the passing of this resolution.

Resolution 6 - Special Resolution

A special resolution will be proposed to give the Directors power at their discretion, in place of the existing powers granted at the AGM in 2021, without applying statutory pre-emption rights for shareholders (i) to allot equity securities by way of a rights issue, open offer or otherwise in favour of ordinary shareholders and/or any persons having a right to subscribe for or convert securities into ordinary shares in the capital of the Company (including, without limitation, any person entitled to options under any of the Company's shares option schemes for the time being); and (ii) to allot the MLPL New Shares and ELI New Shares and (iii) to allot equity securities with an aggregate nominal value of an amount up to €434,014.91 being approximately 10% of the issued ordinary share capital of the Company following the issue of the MLPL New Shares. The power will have effect immediately prior to Re-Admission and will expire at the conclusion of the AGM of the Company in 2023, or if earlier, the date which is fifteen months from the date of passing of this resolution.

27. Action to be taken

All Shareholders on the register at the requisite time will be eligible to vote on all the Resolutions. The full text of the Resolutions is set out in the Notice of EGM in Part 13 of this Document.

Attendance at the EGM

The Company expects to be able to welcome shareholders to attend the EGM in person. In the event that it becomes necessary or appropriate to make alternative arrangements for the holding of the EGM, or it is not possible to hold the EGM either in compliance with public health guidelines or applicable law or where it is otherwise considered that proceeding with the EGM as planned poses an unacceptable health and safety risk, the EGM may be adjourned or postponed or relocated to a different time and/or venue, we will ensure that shareholders are given as much notice as possible via RNS announcement and the Company's website: www.sanleonenergy.com. Should you choose not to physically attend the EGM, we encourage Shareholders to avail of the proxy voting service to ensure they can vote on the Resolutions proposed at the EGM and be represented at the EGM. By submitting a proxy as soon as possible, you can ensure that your vote on the Resolutions is cast in accordance with your wishes without attending in person.

Voting by proxy

Should we need to change the arrangements for the holding of the EGM in this way, it is possible that we will not be in a position to accommodate shareholders beyond the minimum required to hold a quorate meeting. In light of this uncertainty, we strongly encourage shareholders to submit a proxy vote in advance of the EGM and to appoint the Chair of the EGM as their proxy, rather than a named person who, if circumstances change, may not be permitted to attend and vote at the EGM because of public health guidance. The process for appointing a proxy and/or voting in connection with the Resolutions to be proposed at the EGM depends on the manner in which you hold your shares. Further details are set out in the notes to the Notice of EGM.

Please note that persons holding their interests in the Company through the Euroclear Bank or CREST (CDI) systems must comply with any earlier or other voting submission deadline imposed by those systems. Further information in this respect is provided on page 2 of this Document and in the notes to the Notice of EGM.

28. Recommendation

The Directors consider that the completion of the MLPL Reorganisation, the ELI Reorganisation and the Further ELI Investments and Resolutions 1 to 6 are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors unanimously recommend that you vote in favour of Resolutions 1 to 6, as those Directors who own Existing Ordinary Shares have irrevocably undertaken to do in respect of their entire beneficial holdings of 9,495,864 Existing Ordinary Shares (representing approximately 2.11% of the issued ordinary share capital of the Company as at the date of this Document).

In addition, Midwestern has given an irrevocable undertaking to the Company to vote in favour of Resolutions 1 to 6 to be proposed at the EGM in respect of their holdings totalling, in aggregate 59,299,608 Existing Ordinary Shares, representing approximately 13.18% of the Existing Share Capital as at the date of this Document. Details of the irrevocable undertakings are set out in paragraph 10.3 of Part 12 of this Document.

In total, therefore, the Company has received irrevocable undertakings to vote in favour of Resolutions 1 to 6 to be proposed at the EGM in respect of holdings totalling, in aggregate, 68,795,472 Existing Ordinary Shares, representing 15.29% of the Existing Share Capital as at the date of this Document.

Yours faithfully,

Mutiu Sunmonu

Non-Executive Chairman

PART 2

THE PROPOSED MIDWESTERN REORGANISATION

1. Introduction

The Proposed Midwestern Reorganisation is conditional on the completion of the Eroton OML 18 Transactions and includes the MLPL Reorganisation, the ELI Reorganisation and the entry into certain associated documentation. The Midwestern Reorganisation will result in San Leon owning on completion a 44.1% initial indirect economic interest in OML 18 with the remaining 55% interest being held by NNPC and 0.9% by Bilton. The ELI Reorganisation will result in San Leon owning on completion a 27.1% interest in ELI which is the owner of the ACOES to be utilised by OML18 and San Leon becoming a significant holder of loans to ELI.

2. Current Structure

The following structure chart shows the respective holdings of San Leon and Midwestern in ELI and MLPL as at the date of this Document:

3. The Eroton OML 18 Transactions

Eroton, the operator of the OML 18 licence, currently holds a 27% effective economic interest in the OML 18 licence. Eroton has conditionally agreed, or will conditionally agree, to acquire additional interests through the Sahara OML 18 Transaction and the Bilton OML 18 Transaction resulting in the acquisition of their effective economic interests in OML 18 of 16.2% and 1.8% respectively. The MLPL Reorganisation and the ELI Reorganisation are conditional, inter alia, upon completion of the Eroton OML 18 Transactions.

In order to fund the Sahara OML 18 Transaction and Bilton OML 18 Transaction, Eroton proposes to enter into the New Eroton Debt Facilities which represent senior secured reserve- based lending facilities totalling US$750,000,000 to be provided to Eroton by a lending consortium led by Afreximbank for the purposes of, inter alia: (i) facilitating the Eroton OML 18 Transactions; and (ii) the repayment of Eroton's existing financing. The details of the credit

committee approved term sheet associated with the New Eroton Debt Facilities from the lead lender, Afreximbank is set out in paragraph 3.2.5 below. The New Eroton Debt Facilities are conditional, amongst other things, upon definitive documentation in respect of the facility and associated security package being entered into. Subject to completion of the New Eroton Debt Facilities, the New Eroton Debt Facilities will replace the Existing Eroton Debt Facility, which will be repaid in full and GTB's security in connection with the Existing Eroton Debt Facility will be discharged.

The Sahara OML 18 Acquisition Agreement has been negotiated but has not been executed at this point and is only expected to be executed once Eroton has funds available to it to satisfy the consideration under the New Eroton Debt Facilities. Accordingly, whilst the terms have been negotiated, there can be no certainty that it will be entered into or the terms on which it will be entered into.

Whilst the Bilton OML 18 Acquisition Agreement has been executed, it is also conditional upon the Sahara OML 18 Acquisition Agreement being entered into completing following the New Eroton Debt Facilities proceeding. Accordingly as there can be no certainty that the Sahara OML 18 Acquisition Agreement will be entered into or the terms on which it will be entered into and there is no certainty that this condition will be satisfied.

The Sahara OML 18 Acquisition Agreement, if executed, will be and the Bilton OML 18 Acquisition Agreement is subject to certain conditions before completion can occur, details of the key conditions are summarised in paragraphs 3.3.1 and 3.3.2 below. In particular, the Sahara OML 18 Acquisition Agreement, if executed will be, and the Bilton OML 18 Acquisition Agreement is conditional on the entry into the Settlement Agreement associated with certain litigation between Eroton, Bilton and Sahara. Further details of the Settlement Agreement and the associated litigation are included in paragraphs 3.3.3 and

3.4 below.

It is emphasised that the MLPL Reorganisation is conditional, amongst other things, on the entry into and the utilisation of the New Eroton Debt Facilities and the Eroton OML 18 Transactions completing. Whilst the terms of the New Eroton Debt Facilities have been approved by the lead lender, Afreximbank, the Sahara OML 18 Acquisition Agreement has been negotiated it is not expected to be entered into until after the New Eroton Debt Facilities have been entered into and the funds are available and the Bilton OML 18 Acquisition Agreement has been executed, subject to certain conditions, they are dependent on, inter alia, the New Eroton Debt Facilities being entered into and becoming unconditional and being drawn down. Furthermore, the New Eroton Debt Facilities have not been entered into and once entered into will be subject to additional conditions to drawdown which will have to be satisfied prior to utilisation of the facilities and for completion of the Sahara OML 18 Transaction and the Bilton OML 18 Transaction. These matters are not under the Company's control. Accordingly, there is no certainty that the New Eroton Debt Facilities will be entered into or that the Eroton OML 18 Transactions will proceed or that they will proceed on the currently proposed terms. Only once the Eroton OML 18 Transactions complete and the other conditions to the MLPL Reorganisation have been satisfied will the Company be able to proceed with the MLPL Reorganisation and Re-Admission. There can therefore be no guarantee that the MLPL Reorganisation and Re-Admission will occur.

A summary of the key risks relating to the Eroton OML 18 Transactions and associated financing are set out in paragraph 2 of Part 4 of this Document.

The number of shares in the Company to be subscribed for by Midwestern as part of the MLPL Reorganisation has been agreed and fixed between Midwestern and the Company and is not subject to adjustment by reference to the market price of the Ordinary Shares or New Ordinary Shares.

Accordingly, in order for the MLPL Reorganisation to proceed the market price of the New Ordinary Shares on the date of allotment of the MLPL New Shares must be not greater than the value per share shown recorded in the MLPL Valuation Report.

The Board are of the view that the Eroton OML 18 Transactions and New Eroton Debt Facilities are important for several reasons, including:

(i) the Eroton OML 18 Transactions underpin the valuation and rationale of the MLPL Reorganisation by delivering, indirectly, to San Leon a far greater interest in OML 18 than is currently held by Eroton;

(ii) the Sahara OML 18 Transaction resolves a series of disputes that have arisen between Eroton and its OML 18 joint venture partner, Sahara. Several of these disputes have developed into the Eroton Litigation, although none are currently being actively pursued, and all legal actions between Eroton and Sahara will be extinguished as part of the Sahara OML 18 Transaction via the Settlement Agreement, thereby enabling Eroton to focus on the commercial development of OML 18 as a world class oil and gas field; and

(iii) the New Eroton Debt Facilities are a condition to and are necessary to fund the Eroton OML 18 Transactions and also enable the Existing Eroton Debt Facility to be refinanced.

If the New Eroton Debt Facilities are not entered into or once entered into does not complete or the conditions to drawdown are not satisfied and/or the Eroton OML 18 Transactions do not complete then the MLPL Reorganisation cannot complete. The New Eroton Debt Facilities and the Eroton OML 18 Transactions are not in the Company's control and even if shareholders approve the Resolutions, they may not occur. In any of these cases then San Leon would retain a 40% equity interest in MLPL with Midwestern continuing to own the remaining interest in MLPL and Eroton would retain a 27% economic interest in OML 18, meaning that San Leon would continue to have a 10.58% initial indirect economic interest in OML 18. The outstanding MLPL Loan Notes would become payable by MLPL (or by Midwestern as guarantor to the MLPL Loan Notes) to San Leon within 90 days of termination of the MLPL Reorganisation Agreement.

The New Eroton Debt Facilities and the Eroton OML 18 Transactions are also important to the future financial condition of Eroton, and given the Company's significant focus on OML 18 and its operator Eroton, the failure of the New Eroton Debt Facilities and the Sahara OML 18 Transaction to complete, could have a material and adverse effect on Eroton, with a consequent adverse effect on Company's business, financial condition and results.

The Directors have prepared a detailed cash flow forecast for the Group for the period from 1 June 2022 to 31 December 2023.

The principal assumptions underlying the cash flow forecast and the availability of finance to the Group are as follows:

(i) the Proposed Transaction completes in the second half of 2022. The Proposed Transaction also comprises, inter alia, a proposed consolidation of Midwestern's indirect debt and equity interests in ELI Malta with those of the Company, as well as further new debt and new and existing equity investments to be made by San Leon pursuant to the Further ELI Investments;

(ii) Eroton acquires an additional 18% interest in OML 18 from two of the other partners in OML 18, thereby taking Eroton's interest in OML 18 to 45%. This is subject, inter alia, to: i) agreeing documentation; ii) finalising bank financing; and iii) receiving the relevant regulatory consents in Nigeria;

(iii) the New Facility of $50 million has been secured to finance the Proposed Transaction;

(iv) elimination of the MLPL Loan Notes on completion of the Proposed Transaction;

(i)

(v) under the Asset Management Agreement with Eroton, San Leon receives $500,000 per month for technical and financial advisory services following completion of the Potential Transaction;

(vi) repayments from ELI of loan notes of US$37.6 million during 2022 and 2023;

(vii) repayment from Eroton under the Master Services Agreement, of $3m during 2022; and

(viii) a further loan of $2.5 million is given to Decklar in relation to its Oza investment pursuant to current discussions.

Due to the Proposed Transaction not having completed at the date of this Document there is an inherent material uncertainty that completion will not occur as anticipated.

The Group has modelled various other scenarios assuming the Proposed Transaction does not complete and given the Group's well understood cost base, the principal uncertainty if the Proposed Transaction does not complete relates to the quantum and timing of receipt of interest and capital repayments on the MLPL Loan, which would remain in place, and the loan Notes with ELI.

It was originally envisaged that the MLPL Loan Note payments due to the Group would be sourced by MLPL from the receipt of dividends through its indirect interest in Eroton via Martwestern. These dividends have not been received to date and consequently MLPL has entered into loan arrangements in order to be able to make Loan Note payments to the Company. In the absence of the dividend payments, MLPL will be reliant on further advances under the loan arrangement and in turn being able to make Loan Note payments to the Company. The Company has no obligation arising from the loan arrangements entered into by MLPL.

The loan repayments due from ELI were due to start in 2021 but have been delayed due to operational readiness of the FSO and ACOES project being delayed. The Directors have a reasonable expectation that ELI will be revenue generating imminently with the commencement of barging operations, and while loan repayments have been delayed, they should commence in the second half of 2022.

Due to the uncertainty on timing of future cashflows the MLPL Loan Notes and ELI loan notes have both been credit impaired in the annual report and accounts of the Company for the year ended 31 December 2021.

In the ultimate downside scenario where no repayments are received from MLPL and ELI, the New Facility can be drawn by the Company to facilitate completion of the Further ELI Investments, with the remaining balance being used for general corporate purposes. In this scenario the working capital requirements of the Group can be met for the 12-month period from the date of approval of the financial statements, although a reduction to administrative costs is required in 2023, which the Directors believe is achievable and within their control.

However, while the working capital requirements of the Group can be met for the 12- month period, the Directors believe that the continued viability of the Group and Company into the future is dependent on the completion of the Proposed Transaction. As such, the completion of the Proposed Transaction creates significant uncertainty upon the Group and Company's ability to continue as a going concern beyond the 12-month period. The Directors' have concluded that this represents a material uncertainty which may cast significant doubt upon the Group and Company's ability to continue as a going concern and that, therefore, the Group and Company may be unable to continue realising its assets and discharging its liabilities in the normal course of business.

3.2 Ownership of OML 18 following completion of the Eroton OML 18 Transactions

Following the completion of the Eroton OML 18 Transactions, the ownership of OML 18 (including any indirect economic interests) will be as follows:

Bilton's initial indirect economic interest in OML 18 through Eroton is, however, subject to increase on the following hurdles being met:

(i) from the date of repayment of the original purchase price* plus accrued interest accrued thereon until 20 million barrels of gross OML 18 production is realised, Bilton's economic interest in Eroton will increase from 2% to 10%, which would result in a commensurate decrease in San Leon's economic interest in OML 18 to 40.5%; and

(ii) thereafter, when subsequent production hurdles are met, Bilton's net economic interest in Eroton will increase incrementally until cumulative gross OML 18 production reaches 40 million barrels, at which point San Leon's economic interest in OML 18 would be 22.5% as Bilton and San Leon's economic interests in Eroton shall reflect their shareholdings (50% and 50% respectively).

*  Being the price of US$1.1 billion paid for the 45% interest in OML 18.

Upon Bilton's initial indirect economic interest in OML 18 through Eroton increasing, the Company's indirect economic interest in OML18 through Eroton will decrease.

Further details of OML 18 are set out in the Competent Persons report in Part 7 of this Document.

3.3.1  Sahara OML 18 Acquisition Agreement

Whilst it has been negotiated but not executed, the terms of a proposed acquisition agreement proposed to be entered into between Sahara Field Production 18 Limited ("SFP") and Sahara Charitable Foundation ("SCF") (together, the "Sellers") and Eroton pursuant to which Eroton will purchase the entire issued share capital of OML 18 Energy Resource Limited ("OML 18 ER") have been negotiated as between the parties. The consideration will be US$485,000,000, comprising a cash consideration of US$410,000,000 and a funding advance of US$75,000,000, lent by Sahara Field Production Limited to Eroton, pursuant to part of the New Eroton Debt Facilities in order to finance the transaction contemplated by the Sahara OML 18 Acquisition Agreement. The Sahara OML 18 Acquisition Agreement has been negotiated but has not been executed at this point and is not expected to be executed until after the New Eroton Debt Facilities have been agreed and entered into.

The acquisition of OML 18 ER by Eroton is expected to be subject to a number of conditions (the "Sahara OML 18 Conditions") including, amongst others:

(i) the release of GTB's security over the shares which are subject to (a) a deed of share charge dated 29 November 2019 between OML 18 ER (as the Borrower), SFP (as Shareholder) and GTB (as Security Trustee); and (b) a deed of share charge dated 29 November 2019 between OML (as the Borrower), SCF (as Shareholder) and GTB (as Security Trustee);

(ii) the execution of the Settlement Agreement in the negotiated form, in full and final settlement of the litigation detailed in paragraph 3.3 below and the associated filing of the notice of withdrawal and court-approved settlement of the lawsuits in the relevant courts; and

(iii) the written consent of the Minister (the "Minister's Consent") or any other person or entity for the time being responsible for Petroleum and/or related substances in the Federal Republic of Nigeria to the transactions which are contemplated under the Sahara OML 18 Acquisition Agreement (the "Minister's Consent Condition").

Eroton shall be responsible for paying all costs and other expenses in respect of obtaining the Minister's Consent. If the Minister's Consent Condition has not been satisfied on or before 5:00pm on the date falling nine months from the execution of the Sahara OML 18 Acquisition Agreement (the "Sahara OML 18 Long Stop Date"), Eroton may extend the Long Stop Date for up to 90 Business Days (the "Sahara OML 18 Extended Long Stop Date").

Under the terms of the Sahara OML 18 Acquisition Agreement, the Sellers respectively agree (in the period up to completion) to procure that from execution of the Sahara OML 18 Acquisition Agreement OML 18 ER does not undertake any acts which is outside the ordinary course of business other than where Eroton has consent to such acts in writing, and that certain material actions in relation to the business of Eroton are not undertaken without the consent of Eroton.

Under the terms of the Sahara OML 18 Acquisition Agreement, the Sellers will provide certain warranties and indemnities to Eroton and Eroton has given certain warranties to the Sellers. The warranties will be given at signing of the Sahara OML 18 Acquisition Agreement and will be repeated on completion. The warranties will be subject to matters disclosed in the disclosure letter which is to be exchanged between the Sellers and Eroton or otherwise disclosed during the conduct of the due diligence exercise by Eroton.

The warranties and indemnities are subject to certain limitations including the aggregate total liability of the Sellers being limited to and shall not exceed an amount equal to 100% of the consideration under the Sahara OML 18 Acquisition Agreement. The Sellers will not be liable for any claim under a warranty or indemnity given by them under the Sahara OML 18 Acquisition Agreement unless they receive from Eroton written notice in respect of a claim for breach of either (i) the tax warranties or before the date falling on the sixth anniversary of the completion date, or in respect of either of; (ii) the fundamental warranties; or (iii) the general warranties, on or before the date falling on the sixth anniversary of the completion date.

The Sahara OML 18 Acquisition Agreement once entered into may be terminated with immediate effect if (i) the Minister's Consent Condition has not been satisfied by 5:00 pm

on the Sahara OML 18 Long Stop Date (if this has not been extended); or (ii) the Sahara OML 18 Conditions remain unfulfilled by 5:00 pm on the Sahara OML 18 Extended Long Stop Date, by notifying the other party of termination as a result of the non-satisfaction of a Condition within the stipulated timeline. Either party can terminate if the completion arrangements have not been complied with in all material respects. The meaning of material for the purposes of the termination provisions is set out in the Sahara OML 18 Acquisition Agreement.

The Sahara OML 18 Acquisition Agreement will be governed by English law.

The Sahara OML 18 Acquisition Agreement has been negotiated but has not been executed at this point and is only expected to be executed once Eroton has funds available to it to satisfy the consideration which will require the New Eroton Debt Facilities to be entered into and the conditions precedent to draw down to have been satisfied. Accordingly, whilst the terms have been negotiated, there can be no certainty that they will be entered into or the terms on which they will be entered into. There can therefore be no guarantee that the Sahara OML 18 Acquisition Agreement will be entered into.

In the event that the Eroton OML 18 Transactions do not occur, Eroton may be in breach of the Existing Eroton Debt Facility (details of which are set out in paragraph 10.23.14 of Part 12 of this Document) which was proposed to be remedied through the refinancing of such facilities through the New Eroton Debt Facilities.

In the event that repayment of the Existing Eroton Debt Facility is accelerated then, in the absence of alternative facilities, GTB would be entitled to effect any of its default remedies under the Existing Eroton Debt Facility, including the enforcement of its security.

In addition, in the event that the Eroton OML 18 Transactions do not occur, the Eroton Litigation is likely to continue (details of which is set out in paragraph 3.4 of this Part 2) and further details of the risks around the Eroton Litigation are set out in paragraphs 2.2 - 2.3 of Part 4 of this Document.

If the Eroton OML 18 Transactions are not completed and the benefits to the Company expected to result from these transactions are not achieved this could result in the enforcement of security by GTB and ultimately Eroton being wound up either as part of the Eroton litigation or as a result of such default. Any of these circumstance could result in a material adverse effect on the Company's business, operations, financial performance and cash flow and future prospects and the market price of the Ordinary Shares may be affected.

3.3.2  Bilton OML 18 Acquisition Agreement

An acquisition agreement has been entered into between Bilton and Bilton Nominees Limited (together, the "Sellers") and Eroton pursuant to which Eroton will purchase the entire issued share capital of Bilton OML 18 Limited ("Bilton OML 18"). The consideration is US$12.5 million.

The acquisition of Bilton OML 18 is subject to a number of conditions (the "Bilton OML 18 Conditions") including, amongst others:

(i) the execution of the Sahara OML 18 Acquisition Agreement in the agreed form;

(ii) the release of GTB's security over the shares which are subject to an undated deed of share charge between Eroton (as the Borrower), and GTB (as Security Trustee);

(ii) the execution of the Settlement Agreement in the agreed form, in full and final settlement of the litigation detailed in paragraph 3.3.3 below and the associated filing of the notice of withdrawal and court-approved settlement of the lawsuits in the relevant courts; and

(iii) the written consent of the Minister (the "Minister's Consent") or any other person or entity for the time being responsible for Petroleum and/or related substances in the Federal Republic of Nigeria to the transactions which are contemplated under the Bilton OML 18 Acquisition Agreement (the "Minister's Consent Condition").

Eroton shall be responsible for paying all costs and other expenses in respect of obtaining the Minister's Consent. If the Minister's Consent Condition has not been satisfied on or before 5:00pm on the date falling nine months from the execution of the Bilton OML 18 Acquisition Agreement (the "Bilton OML 18 Long Stop Date"), Eroton may extent the Long Stop Date with up to 90 Business Days (the "Bilton OML 18 Extended Long Stop Date").

The Sellers have respectively agreed (in the period up to completion) to procure that Bilton OML 18 does not undertake any acts which is outside the ordinary course of business other than where Eroton has consent to such acts in writing, and that certain material actions in relation to the business of Eroton is not undertaken without the consent of Eroton.

Under the terms of the Bilton OML 18 Acquisition Agreement, the Sellers have provided certain warranties and indemnities to Eroton and Eroton has given certain warranties to the Sellers. The warranties have been given at signing of the Bilton OML 18 Acquisition Agreement and will be repeated on completion. The warranties will be subject to matters disclosed in the disclosure letter which is to be exchanged between the Sellers and Eroton or otherwise disclosed during the conduct of the due diligence exercise by Eroton.

The warranties and indemnities are subject to certain limitations including the aggregate total liability of the Sellers being limited to and shall not exceed an amount equal to 100% of the consideration under the Bilton OML 18 Acquisition Agreement.

The Sellers will not be liable for any claim under a warranty or indemnity given by them under the Bilton OML 18 Acquisition Agreement unless they receive from Eroton written notice in respect of a claim for breach of either (i) the tax warranties or before the date falling on the sixth anniversary of the completion date, or in respect of either of; (ii) the fundamental warranties; or (iii) the general warranties, on or before the date falling on the sixth anniversary of the completion date.

The Bilton OML 18 Acquisition Agreement may be terminated with immediate effect if (i) the Minister's Consent Condition has not been satisfied by 5:00 pm on the Bilton OML 18 Long Stop Date (if this has not been extended); or (ii) the Bilton OML 18 Conditions remain unfulfilled by 5:00 pm on the Bilton OML 18 Extended Long Stop Date, by notifying the other party of termination as a result of the non-satisfaction of a Condition within the stipulated timeline. Either party can terminate if the completion arrangements have not been complied with in all material respects.

The Bilton OML 18 Acquisition Agreement will be governed by Nigerian law.

The Bilton OML 18 Acquisition Agreement has been entered into, subject to conditions, but dependent on the Sahara OML 18 Acquisition Agreement being entered into and the conditions under the Sahara OML 18 Acquisition Agreement being satisfied. It is therefore also conditional upon the New Eroton Debt Facilities being executed and whilst there is a credit committee approved term sheet for these facilities from the lead lender, Afreximbank, these facilities are at an early stage and there can be no certainty that they will be entered into or the terms on which they will be entered into and the Company cannot control their execution. Furthermore, once the New Eroton Debt Facilities are entered into there will be additional conditions to drawdown which will have to be satisfied prior to utilisation of the facilities and for completion of the Sahara OML 18 Transaction (if entered into), and the Bilton OML 18 Transaction. Only once the Eroton OML 18 transactions complete and the other conditions to the MLPL Reorganisation have been satisfied will the Company be able to proceed with the MLPL Reorganisation and Re-Admission. There can therefore be no guarantee that the MLPL Reorganisation and Re-Admission will occur. In the event that the Eroton OML 18 Transactions do not occur, Eroton may be in breach of the Existing Eroton Debt Facility (details of which are set out in paragraph 10.23.14 of Part 12 of this Document) which was proposed to be remedied through the refinancing of such facilities through the New Eroton Debt Facilities.

In the event that repayment of the Existing Eroton Debt Facility is accelerated then, in the absence of alternative facilities, GTB would be entitled to effect any of its default remedies under the Existing Eroton Debt Facility, including the enforcement of its security.

In addition, in the event that the Eroton OML 18 Transactions do not occur, the Eroton Litigation is likely to continue (details of which is set out in paragraph 3.4 of this Part 2 and further details of the risks around the Eroton Litigation are set out in paragraphs 2.2 - 2.3 of Part 4 of this Document.

If the Proposals are not completed and the benefits to the Company expected to result from the Proposals are not achieved this could result in the enforcement of security by GTB and ultimately Eroton being wound up either as part of the Eroton litigation or as a result of such default. Any of these circumstance could result in a material adverse effect on the Company's business, operations, financial performance and cash flow and future prospects and the market price of the Ordinary Shares may be affected.

3.3.3  Settlement Agreement

Whilst it has not been executed, the terms of a proposed settlement agreement to be entered into between Sahara, Eroton, Bilton, Notore Chemical and Bilton OML 18 Limited (together, the "Settling Parties") pursuant to which the Settling Parties shall settle, or shall procure the settlement of the Eroton Litigation has been negotiated between the parties (the "Settlement Agreement"). Under the negotiated terms, the Settling Parties will agree to enter into the Settlement Agreement in connection with the Eroton OML 18 Transactions, and the Sahara OML 18 Acquisition Agreement in particular.

Under the negotiated terms, the Settling Parties will agree to settle all of the Eroton Litigation in consideration for the acquisition by Eroton of the shares held indirectly by SFP and SCF (as the sellers under the Sahara OML 18 Acquisition Agreement) and the payment of the consideration under the Sahara OML 18 Acquisition Agreement by Eroton shall constitute the entire consideration for the full and final settlement of the mutual claims and counterclaims of Sahara comprised in the Eroton Litigation and any other claims of Sahara relating to OML 18. The performance by Sahara of its obligations under the Sahara OML 18 Acquisition Agreement shall constitute the entire consideration for the full and final settlement of the mutual claims and counterclaims of Eroton, Bilton and Bilton OML 18 Limited comprised in the Eroton Litigation and any other claims of Eroton, Bilton and Bilton OML 18 Limited relating to OML 18.

The mutual release by the Settling Parties will require each of them to relinquish, waive, release, and forever discharge each other and any of their successors, assigns or any third parties seeking to claim on their behalf, in respect of all claims and actions under or in connection with the Eroton Litigation. The settlement terms agreed when the Settlement Agreement it executed by the Settling Parties shall be irrevocable, and they shall each execute official terms of settlement in respect of the actions forming part of each relevant lawsuit comprised in the Eroton Litigation, for filing with the Nigerian courts. Execution of the Settlement Agreement does not indicate an admission of liability by any of the Settling Parties.

The Settlement Agreement will be governed by Nigerian law.

The Settlement Agreement has been negotiated but has not been executed at this point and is only expected to be executed once Eroton has funds available to it to satisfy the consideration and the Sahara OML 18 Acquisition Agreement is entered into which will require the definitive documents for the New Eroton Debt Facilities to be entered into and there will be additional conditions to drawdown to be satisfied prior to utilisation of the facilities. Accordingly, whilst the terms have been negotiated, there can be no certainty that the Settlement Agreement will be entered into or the terms on which they will be entered into. In the event that the Settlement Agreement is not entered into the Eroton Litigation is likely to continue and details of the Eroton Litigation is set out in paragraph 3.4 of this Part 2 and further details of the risks around the Eroton Litigation are set out in paragraphs 2.2 - 2.3 of Part 4 of this Document.

,

3.3.4  New Eroton Debt Facilities

A credit committee approved term sheet was approved by board of Afreximbank in relation to a proposed facility from amongst others, Eroton, Afreximbank, Midwestern, Nova Merchant Bank Limited and Sahara in respect of a loan between, amongst others, Eroton, as borrower, Afreximbank and others, including Midwestern as lenders (together the "Lenders"), Afreximbank as mandated lead arranger, book runner, facilities agent, security agent and hedge coordinating agent, and OML 18 Energy Resource Limited and Bilton OML 18 Limited (together with Eroton, the "Obligors") as guarantors.

The Lenders will loan Eroton US$750 million (secured) in tranches of (i) US$500 million ("Tranche A") and (ii) US$250 million ("Tranche B"), ranking pari passu and with an identical security package. The draw down date for the loan was 30 June 2022 or by such date as Eroton and the Lenders agree. On 5 July 2022, Afreximbank confirmed to Eroton their approval of their commitment. The purpose of the loan is (i) to be used as consideration for the acquisition of OML 18 Energy Resource Limited and Bilton OML 18 Limited (the "SPVs") (ii) to prepay Eroton's outstanding financial indebtedness (including the Existing Eroton Debt Facilities); and (iii) pay fees and costs related to the transaction noted at (i).

Security will be placed over (i) Eroton's existing and future participating interest in OML 18 and any proceeds deriving from this; (ii) the shares in and the assets of both Eroton and the SPVs; and (iii) as well as over the accounts which the Obligors are required to open and maintain. Eroton has agreed not to place security over any of its present or future assets without the prior consent of the Lenders.

The interest rate payable will be LIBOR plus (i) 8.75% per year for Tranche A and (ii) 8.25% for Tranche B, and will accrue every third calendar month, except in the event of a default under the loan, in which case the interest rate will increase by 2%. A one-off participation fee of 0.75% and yearly management fee of 0.25% will be payable.

The indicative terms may be terminated by Afreximbank if the due diligence process is unsatisfactory or if the information provided in respect of Eroton is materially inaccurate or incomplete, or if there is a failure to disclose any material facts or information. Eroton may terminate the indicative terms at any time, subject to reimbursing Afreximbank for any costs and expenses they have incurred.

It is intended that the loan will be repaid from proceeds received from Eroton's working interest in OML 18, and other sources of cash available to the Obligors. It will be repayable in quarterly instalments, with the first payment becoming due six months after signing of the loan agreement. The final maturity date will be the earlier of (i) the date falling 84 months from signing of the loan agreement and (ii) the reserve tail date, as to be agreed between the parties. Prepayment is permitted in minimum amounts of US$10 million or multiples thereof, and a 1.5% prepayment fee will apply on the outstanding loan if the entire amount is prepaid.

The loan agreement is governed by English law and Nigerian law will govern where relevant for the security documents.

It is emphasised that whilst a credit committee approved term sheet has been approved by board of Afreximbank, the loan agreement has not yet been entered into and, if entered into, there are additional conditions to drawdown which will have to be satisfied prior to utilisation of the facilities and for completion of the Sahara OML 18 Transaction and the Bilton OML 18 Transaction to proceed. A summary of the key risks relating to the Eroton OML 18 Transactions and associated financing are set out in paragraph 2 of Part 4 of this Document.

Pursuant to the Settlement Agreement summarised in paragraph 3.3.3 above, the following disputes and claims will be settled:

3.4.1  Claims by Sahara

(a) Suit Number FHC/L/CS/976/2020 - OML 18 Energy Resource Limited (formerly known as Sahara Field Production Limited) v. Eroton Exploration & Production Company Limited.

Sahara is the Plaintiff and Eroton is the Defendant and the claim is related to the recovery of a disputed debt of US$72 million arising from outstanding legacy issues regarding the acquisition of OML 18.

Sahara alleges that by an agreement dated 14 October 2019, Eroton had agreed to pay the sum of US$80 million in consideration of Sahara's participating interest and contribution towards the acquisition and operation of OML 18. Sahara alleges that Eroton has only paid US$8 million in this regard. Sahara's total claim is for the sum of US$72 million being the alleged total balance due to Sahara from Eroton under the agreement.

By an ex-parte application Sahara sought and obtained an interim injunction which has restrained Eroton from dealing with certain of its bank accounts except for "Operating Costs". Eroton contends that any dispute arising from the Settlement Agreement must be referred to arbitration as stipulated in the Settlement Agreement. As a result, Eroton still has restrictions on its use of the accounts subject to the injunction, however, it can only access the said accounts for operational costs, which are essentially the only use of the restricted accounts. Therefore the injunction has little or no effect on Eroton's operations.

Proceedings in the suit have been suspended temporarily in deference to ongoing commercial settlement discussion between Eroton and Sahara.

(b) Suit Number FHC/L/CS/977/2020 - OML 18 Energy Resource Limited (formerly known as Sahara Field Production Limited) v. Eroton Exploration & Production Company Limited.

This is a petition by Sahara against Eroton. Sahara is seeking an order of the FHC to wind up Eroton on the basis of Eroton's inability to liquidate the outstanding debt due to it.

Sahara's case is that it is entitled to the principal sum of US$47,944,072 being its alleged share of the profit oil accruing from OML 18 during the period from March 2015 and June, 2019, being the period when Eroton held 16.2% participating interest in trust for Sahara. Eroton made an application to stay proceedings in favour of arbitration in the FHC. The FHC declined Eroton's application on the ground that matters of winding up proceedings are not arbitrable in its ruling of 9 September 2020.

Eroton has appealed the ruling of the FHC to the CA. However, the appeal and the proceedings at the Federal High Court are currently suspended in deference to the ongoing commercial settlement discussions.

(c) Suit Number FHC/L/CS/1232/2020 - OML 18 Energy Resource Limited (formerly known as Sahara Field Production Limited) v. Bilton OML 18 Limited & 2 others.

Sahara is the Plaintiff, Bilton OML 18 Limited is the first Defendant, Bilton is the second Defendant and Eroton is the third Defendant. Sahara is seeking judicial interpretation of certain provisions of a financial service agreement ("Financial Service Agreement") between it and Bilton and payment of approximately US$45 million being the sum Sahara claims was expended by Sahara on the Bilton entities' acquisition of 1.8% interest in Eroton's OML 18.

Eroton raised a jurisdictional objection based on Sahara's claim being based on the Financial Service Agreement challenging the FHC's jurisdiction to hear the claim. This challenge was refused by the FHC on 25 November 2020. Eroton has appealed this decision to the CA via a Notice of Appeal dated 4 December 2020. The claim by Sahara is now adjourned pending the determination of the appeal. However, the appeal is not being actively pursued at the moment because of the ongoing settlement negotiations between Eroton and Sahara.

Sahara is seeking an order of the CA, upon the determination of the questions in the affirmative, directing the Defendants jointly and severally to pay:

(i) the sum of US$44,936,976 being the alleged sum expended by Sahara on the first and second Defendants' acquisition cost of 1.8% interest from Eroton in OML 18, Sahara's share of available profit of 90% and accumulated interest of 11%; and

(ii) interest on the said sum at the rate of 25% per annum from 1July 2020 until delivery of judgment and thereafter 10% per annum until judgment sum is liquidated cost of the action assessed at N10,000,000 per annum.

(d) Suit Number FHC/L/CS/1231/2020 - OML 18 Energy Resource Limited (formerly known as Sahara Field Production Limited) v. Eroton Exploration & Production Company Limited and Notore Chemical Industries plc.

Sahara is the Plaintiff, while Eroton and Notore Chemical are both Defendants.

The Plaintiff alleges that by a farm out agreement dated 20 March 2020 ("Farm Out Agreement"), it is entitled to 36% of all sums received by Eroton pursuant to the JOA, Shell Offtake Agreement and Notore Offtake Agreement. It is the case of the Plaintiff that Eroton sold gas to Notore Chemical and accordingly, the Plaintiff is entitled to the agreed percentage of the proceeds of the sale of gas.

The Plaintiff is seeking relief against the Defendants as follows:

(i) the sum of N1,071,041,876.27 being the alleged outstanding sum due to the Plaintiff for gas sold under the Farm Out Agreement;

(ii) interest on the said sum at the rate of 25% per annum from 1 July 2020 until delivery of judgment and thereafter 10% per annum until judgment sum is liquidated; and

(iii) cost of the action assessed at N10,000,000 per annum.

However, the parties have jointly informed the court that the matter is being settled, and the matter has been adjourned for settlement.

3.4.2  Claims by Eroton

(a) Suit Number FHC/L/CS/1107/2020 - Eroton Exploration & Production Company Limited v. Guaranty Trust Bank plc and OML 18 Energy Resource Limited (formerly known as Sahara Field Production Limited).

Eroton claims that it is the agreement of parties that where there is dispute arising from the performance of terms of the JOA acceded to by Sahara via a deed of accession, the parties should refer such dispute to arbitration under the arbitration laws of Nigeria. In this regard, Eroton commenced arbitration proceedings against Sahara for failing to liquidate its share of cash calls and costs/expenditure incurred on the joint operations of OML 18.

The instant suit is an application for preservative orders pending the conclusion of the arbitration proceedings. Eroton commenced this action through an originating summons seeking the determination of several questions and declarations/order of the FHC. Eroton is seeking preservative orders of the FHC, upon the determination of the questions in the affirmative, restraining the Defendants from dealing with the assets or monies of the Sahara pending the conclusion of the arbitration proceedings commenced by Eroton against Sahara. As such, Eroton successfully obtained a Mareva injunction against Sahara for sums owed to Eroton for Sahara's failure to make payments to the OML 18 joint venture.

(b) Suit Number FHC/L/CS/1080/2020 - Eroton Exploration & Production Company Limited v. OML 18 Energy Resource Limited (formerly known as Sahara Field Production Limited).

This is a petition filed by Eroton against Sahara seeking an order of the FHC to wind up Sahara on the basis of Sahara's inability to liquidate the outstanding debt due to Eroton.

It is the case of Eroton that it expended several sums for itself and Sahara in respect of the costs/expenditure incurred in the joint operations and cash calls for OML 18. Sahara is obligated but has failed to reimburse Eroton for Sahara's share in the joint operations and cash calls.

The total outstanding debt due to Eroton is US$72,111,096.72 being the sum paid by Eroton in respect of Sahara's participating interest in OML 18. As part of this claim Eroton also sought and obtained an Ex Parte injunction restraining Sahara from utilizing its bank accounts.

However, the parties have jointly informed the court that the matter is being settled, and the matter has been adjourned for settlement.

(c) Suit Number FHC/L/CS/1377/2020 - Bilton Energy Limited v. OML 18 Energy Resource Limited (formerly known as Sahara Field Production Limited).

Bilton is the Plaintiff and Sahara is the Defendant. This claim is not a monetary claim, but is proceedings instituted by Bilton pursuant to Order 52 Rule 15(c) of the Federal High Court (Civil Procedure) Rules 2019, to stay further proceedings in Suit No. FHC/L/CS/1232/2020 - Sahara Field Production Limited v. Bilton OML 18 Limited, Bilton Energy Limited and Eroton Exploration & Production Company Limited, on the basis that the suit was instituted in breach of the arbitration agreement contained in Clause 8.2 of the financial services agreement between Sahara and Bilton. Sahara is resisting this as it claims that its claim is not based on contract but on fraud and misrepresentation which cannot be settled and resolved by arbitration.

The suit has been heard but the court reserved its judgment until a later date, in order to await the outcome of Eroton's appeal before the CA against the Ruling of the Federal High Court delivered on 25 November 2020 in relation to Suit No.: FHC/L/CS/1232/2020 as referred to above.

(d) Appeal Number CA/LAG/CV/104/2021 - Eroton Exploration & Production Company Limited v. OML 18 Energy Resource Limited (formerly known as Sahara Field Production Limited) & 2 others;

Eroton is the Appellant, Sahara is the first Respondent, Bilton OML 18 Limited is the second Respondent and Bilton is the third Respondent.

This is an appeal against the ruling of the Federal High Court (the "Lower Court") in FHC/L/CS/1232/2020 - Sahara Field Production Limited v. 1.) Bilton OML18 Limited 2.) Bilton Energy Limited 3.) Eroton Exploration & Production Company Limited. The appeal is to ascertain the jurisdiction of the lower court (being the FHC) to hear the dispute.

Consequently, the Lower Court held that it has jurisdiction over the subject matter of Sahara's claim as the claim before it was not one for breach of a simple contract but pertained to oil mining (OML 18) and therefore within the jurisdiction of the FHC. As such, Eroton filed a Notice of Appeal against this ruling of the FHC. However, the appeal is not being actively pursued at the moment because of the ongoing settlement discussions between Eroton and Sahara.

4. MLPL Reorganisation

By virtue of the MLPL Reorganisation, Midwestern will subscribe for shares in San Leon and San Leon will acquire from Midwestern the remaining 60% equity interest in MLPL it does not currently own.

The MLPL Reorganisation will be conditional on, along with the other conditions summarised in paragraph 4.3.5 below, the completion of the Eroton OML 18 Transactions and will be implemented immediately prior to Re-Admission by completion of the following steps:

• the issue of 344,334,257 New Ordinary Shares by San Leon to Midwestern pursuant to the MLPL New Shares Subscription Agreement with such subscription consideration being paid for by way of the MLPL Reorganisation Loan Notes; and

• the transfer by Midwestern of its equity interest in MLPL and the benefit of the MLPL Receivable to a member of the San Leon Group in return for the cancellation of the MLPL Loan Notes and the release of Midwestern from its guarantee in relation the MLPL Loan Notes.

Details of the MLPL New Shares Subscription Agreement and other material documentation to be entered into in relation to the MLPL Reorganisation are summarised in paragraphs 4.3 below.

On completion of the OML 18 Production Arrangement in September 2016, the Company received US$173.05 million of MLPL Loan Notes together with a 40% shareholding in MLPL. The MLPL Loan Notes are also accompanied by interest payments accruing at a fixed rate of 17% per annum on the outstanding principal at the time. Midwestern is the guarantor of the MLPL Loan Notes. Further details regarding the MLPL Loan Notes are set out in paragraph 4.3.2 below.

Following payment of just over US$190 million from the MLPL Loan Notes, on 7 April 2020, the Company announced, amongst other matters, that it had entered into an agreement dated 6 April 2020 amending the MLPL Loan Note instrument. Under the terms of this amendment, the remaining balance payable was approximately US$82 million. A further US$10 million was to be paid to the Company on or before 6 October 2020, with the balance of the MLPL Loan Notes receivable payable by December 2021. The balance was to continue to accrue interest at a coupon of 17% per annum until repaid. All other material terms of the MLPL Loan Note Instrument remained unchanged.

Since July 2021, San Leon, MLPL, Midwestern and Martwestern have agreed to a series of conditional payment waivers in respect of the repayment of the MLPL Loan Notes and interest that was to fall due, as the amounts owed to San Leon by MLPL pursuant to the MLPL Loan Notes will be eliminated as part of the MLPL Reorganisation.

As at the Latest Practicable Date, the balance owed to San Leon is approximately US$105.9 million, being a principal amount due of approximately US$82.2 million and total accrued interest due of approximately US$23.7 million.

Following the MLPL Reorganisation, MLPL will be a wholly owned subsidiary of the Company and so any MLPL Loan Note balances will be owed to San Leon by its wholly owned subsidiary and Midwestern will be released from its guarantee. To in part compensate San Leon shareholders, immediately prior to MLPL Reorganisation and the issue of the New Shares, San Leon will sub-divide each of its existing issued Ordinary Shares of €0.01 each into a New Ordinary Share of €0.005 and a Preference Share of €0.005. The holders of the Preference Shares will have a preferential right to receive the first US$40 million of any distributions or dividends (including payments to redeem such shares or loan notes) paid by San Leon following completion of the MLPL Reorganisation. Further information on the Preference Shares is set out at paragraph 21 of Part 1 and paragraph 5.11 of Part 12 of this Document.

In the event that the Resolutions are not passed or the MLPL Reorganisation Agreement is terminated, the balance owed to San Leon will be payable 90 days after such termination, or sooner, inter alia, if there is an event of default.

In addition to the Relationship Agreement summarised at paragraph 15 of Part 1 of this Document and paragraph 10.2 of Part 12 of this Document, the following contracts are material contracts in relation to MLPL Reorganisation.

4.3.1  MLPL New Shares Subscription Agreement

An agreement for the subscription in New Ordinary Shares of San Leon will be entered into between Midwestern and San Leon pursuant to which Midwestern will apply for the allotment of the MLPL New Shares for a price per share equal to the value set out in the MLPL Valuation Report (the "Subscription Letter").

The subscription is subject to the satisfaction of the conditions outlined in the MLPL Reorganisation Agreement, other than the condition relating to Re-Admission.

The consideration for the allotment of the MLPL New Shares will be the MLPL Reorganisation Loan Notes.

The Subscription Agreement will be governed by English law.

4.3.2  MLPL Reorganisation Loan Notes

A loan note will be issued by Midwestern to San Leon evidencing a money debt owed by Midwestern to San Leon pursuant to the Subscription Letter (the "MLPL Reorganisation Loan Notes"). Under the terms of the MLPL Reorganisation Loan Notes, San Leon can redeem the notes in whole or in part at any time after completion of the MLPL Reorganisation Agreement and Midwestern can prepay the debt due under the MLPL Reorganisation Loan Notes at any time after completion of the MLPL Reorganisation Agreement.

The MLPL Reorganisation Loan Notes will be unsecured and will not accrue interest. San Leon can transfer the MLPL Reorganisation Loan Notes to any member of its group without the consent of Midwestern.

The MLPL Reorganisation Loan Notes will be governed by English law.

4.3.3. Notice of Assignment

A notice to transfer and assign the MLPL Reorganisation Loan Notes addressed to Midwestern from San Leon, notifying Midwestern of the transfer of San Leon's present and future rights, title, interest and benefit in, under and to the MLPL Reorganisation Loan Notes to San Leon Energy Nigeria, pursuant to the terms of the MLPL Reorganisation Loan Notes ("MLPL Assignment").

The MLPL Assignment will be governed by English law.

4.3.4  Asset Management Agreement

San Leon Energy Nigeria and Eroton have agreed to enter into the Asset Management Agreement with effect from signing but with the fees payable under the agreement payable from the date of Re-Admission. Under the agreement, Eroton (as owner of a 27 per cent interest in OML 18) has agreed to appoint San Leon Energy Nigeria as manager in relation to OML 18, for the purpose of providing certain advisory services. San Leon Energy Nigeria will have operational and technical oversight and will provide input in connection with field development, drilling programs and operational well activity, among other things. San Leon Energy Nigeria will also advise on financial aspects, for example assisting with the implementation of a corporate finance strategy for the development of OML 18 and streamlining existing organisational processes. In order to provide the financial advisory services, Eroton has agreed to provide certain financial information to San Leon Energy Nigeria , including periodic financial statements and forecasts.

An annual fee of US$6,000,000 payable by Eroton will be paid in advance, in monthly instalments, and San Leon Energy Nigeria will be engaged to provide the services covered by the agreement for an initial period of three years (the "Initial Period"). The agreement shall subsequently renew automatically on an annual basis thereafter, unless otherwise terminated by the parties.

San Leon Energy Nigeria's appointment as the manager of OML 18 shall not affect the role of Eroton as the operator of the same, and San Leon Energy Nigeria's maximum liability under the agreement shall be limited. Eroton has agreed to indemnify San Leon Energy Nigeria against any liabilities and expenses incurred specifically by reason of San Leon Energy Nigeria being manager of OML 18, provided that San Leon Energy Nigeria shall not be so indemnified with respect to any matter resulting from its negligence, wilful misconduct or fraud and shall have no claim against, or recourse to, Eroton in respect of any such matter. Each party has undertaken that it maintains adequate policies and procedures required to comply with applicable anti-corruption laws.

San Leon Energy Nigeria may terminate the agreement if Eroton fails to provide the financial information required in order to provide the services. Eroton may terminate the agreement if completion of the MLPL Reorganisation does not occur by 31 December 2022. Either party can terminate the agreement without notice in the event of (i) the other party committing an illegal, fraudulent or dishonest act, (ii) the other party being in material (or non-material recurring) breach, (iii) the other party breaching the anti-corruption provisions or (iv) the other party suffering an insolvency event. Either party can also terminate the agreement by providing 6 months' prior written notice, which shall expire either at the end of the Initial Period in respect of notice served prior to the third anniversary of the agreement; or at the end of each subsequent 12 month period during which the agreement is automatically renewed after the Initial Period. The agreement is governed by English law.

The services provided under the Asset Management Agreement are in addition to those provided under the Master Services Agreement.

4.3.5  MLPL Reorganisation Agreement

The MLPL Reorganisation Agreement was entered into on 8 July 2022 pursuant to which Midwestern will (i) transfer to San Leon Energy Nigeria its entire shareholding in MLPL (being approximately 60% of the entire issued share capital of MLPL) and (ii) assign to San Leon Energy Nigeria all of its interest under the MLPL Receivable (the "MLPL Reorganisation Agreement"). The consideration will be an amount equal to the subscription price for the MLPL New Shares. San Leon Energy Nigeria's obligation to pay such consideration will be set off against Midwestern's obligation to pay the amount outstanding under the MLPL Reorganisation Loan Notes.

Completion of the MLPL Reorganisation is subject to the following conditions (the "MLPL Conditions"):

(i) the creation of such number of Preference Shares in San Leon, by way of the Sub- Division, as is equal to US$40,000,000 (or such amount calculated from time to time in accordance with the New Memorandum and Articles of Association) on the terms of the Preference Shares as set out in the proposed New Memorandum and Articles of Association, such Preference Shares to be held by shareholders of San Leon immediately prior to completion of the MLPL Reorganisation (the "MLPL Preference Share Condition");

(ii) the publication of the admission document, in a form approved (to the extent required) by the Irish Takeover Panel and in a form approved by the Nomad, San Leon and, where relevant under the terms of the MLPL Reorganisation Agreement, Midwestern (the "MLPL Admission Document Condition");

(iii) the shareholders of San Leon resolving to (i) approve the MLPL Reorganisation,

(ii) adopt the New Memorandum and Articles of Association; (iii) approve the Subdivision; (iv) affect the receipt of shares in MLPL and ELI; (v) authorise the issue of the New Shares to Midwestern; (vi) authorise the creation of preference shares (the "MLPL Shareholder Approval Condition");

(iv) the re-admission to AIM of the shares in San Leon and admission of the Existing Ordinary Shares and the MLPL New Shares, in each case to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules (the "MLPL Admission Condition");

(v) the MLPL Valuation Report being delivered to Midwestern in accordance with section 1028(c) of the Irish Companies Act 2014;

(vi) the Irish Takeover Panel having waived any obligation which might fall on Midwestern or any person acting in concert, or deemed under the Irish Takeover Rules to be acting in concert, with it under Rule 9 of the Irish Takeover Rules to make a general offer for San Leon as a result of the issue of the MLPL New Shares and where such waiver is expressed to be subject to any conditions, such conditions having been satisfied in accordance with their respective terms;

(vii) the (i) notification to Nigerian Upstream Petroleum Regulatory Commission (the "NUPRC") of the intention to engage in the transaction contemplated by the MLPL Reorganisation Agreement; and (ii) notification to, and the approval of, the NUPRC of the identity of San Leon Energy Nigeria, each to the extent not already obtained prior to the execution of the MLPL Reorganisation Agreement (the "MLPL Regulatory Condition");

(viii) the written consent of the Minister for the completion by the Parties of the Subscription Letter, the MLPL Reorganisation Agreement and the transaction contemplated by the MLPL Reorganisation Agreement in accordance with Applicable Law;

(ix) NFCCPC Negative Clearance (the "MLPL Antitrust Condition");

(x) the Sahara OML 18 Acquisition Agreement and the Settlement Agreement each being entered in the agreed form (or in a form incorporating amendments which have been approved with the prior written consent of San Leon) by the parties thereto by 30 September 2022 (or such later date as may be agreed in writing between San Leon and Midwestern) (the "MLPL Sahara Condition");

(xi) the Sahara OML 18 Acquisition Agreement, the Bilton OML 18 Acquisition Agreement and the Settlement Agreement each becoming effective on an unconditional basis and completing in accordance with their respective terms (the "MPLP Eroton Condition");

(i)

(xii) the letter to be signed by certain ELI Shareholders consenting to the ELI Shareholders' Agreement agreeing to remove or relax the provisions of Clause 15.1(d) thereof (the "ELI Consent Condition");

(xiii) the agreements and ancillary documentation necessary to give effect to the New Eroton Debt Facilities being duly executed by all the parties thereto by 31 August 2022 (or such later date as may be agreed in writing between San Leon and Midwestern) (the "MLPL Eroton Financing Condition")

(xiv) there being no breach by Midwestern of the interim period covenants given by Midwestern under the MLPL Reorganisation Agreement (as described below) which individually or together with any other such breach, results or is reasonably likely to result in a diminishment of the net assets of the MLPL or its group by US$10,000,000 or more in aggregate, and there being no material breach of the warranties given by Midwestern at the time of signing of the MLPL Reorganisation Agreement which, individually or together with any other such breach, results or is reasonably likely to result in a diminishment of the net assets of the MLPL or its group by US$10,000,000 or more in aggregate) (each a "MLPL Midwestern Breach"); and

(xv) there being no breach by San Leon of: (i) its obligation to publish a supplementary admission document (if required), (ii) its covenant not to pay or declare dividends in the period between signing and completion of the MLPL Reorganisation Agreement,

(iii) its covenant not to, or agree to, redeem, repurchase, reduce, waive or repay any of its share capital, (iv) its covenant to procure that the number of San Leon Shares which may be issued prior to Completion, or form the subject of any award, option or other right to San Leon Shares granted before Completion, under the San Leon Employee Incentive Plan, San Leon warrants or any other incentive arrangement, does not exceed 44,991,302 San Leon Shares without the prior written approval of Midwestern, (v) its covenant to procure that the terms of the Admission Document will convene the San Leon General Meeting for a date which is no later than the date falling 30 clear days after the date on which the Admission Document is despatched to the San Leon Shareholders or such other date as San Leon and Midwestern may agree in writing; (vi) its covenant not to postpone or adjourn the San Leon General Meeting once convened or seek to amend the San Leon Resolutions after despatch of the Admission Document without the prior written consent of Midwestern (other than in accordance with the exceptions to this covenant set out in the MLPL Reorganisation Agreement); and

(xvi) there being no breach by San Leon of the warranties given by San Leon under the MLPL Reorganisation Agreement which individually or together with any other such breach, results or is reasonably likely to result in a diminishment of the net assets of the Group by US$10.000,000 or more in aggregate ("San Leon Breach").

Any of the MLPL Sahara Condition, MLPL Eroton Condition, MLPL Regulatory Condition, ELI Consents Condition, MLPL Antitrust Condition, MLPL Eroton Financing Condition may be waived by written agreement between San Leon and Midwestern at any time on or before 08:00 on 31 December 2022 (or such other date as San Leon or Midwestern agrees in writing) (the "MLPL Re-organisation Agreement Long Stop Date"). Any material breach by San Leon or Midwestern may be waived by the other by notice in writing at any time before 08:00 on the MLPL Re-organisation Agreement Long Stop Date.

The MLPL Reorganisation Agreement may be terminated by San Leon or Midwestern with immediate effect if a Condition has not been satisfied or has become impossible to satisfy by 08:00 on the MLPL Re-organisation Agreement Long Stop Date.

Midwestern may terminate the MLPL Reorganisation Agreement with immediate effect if:

(i) the recommendation of the directors of San Leon is withdrawn, modified or qualified, or no longer incorporated in the admission document, or if San Leon publishes a statement that its directors no longer intends to make the recommendation or intend to withdraw or modify it; (ii) there occurs a San Leon Breach which (A) is not capable of remedy, or (B) is

capable of remedy but is not remedied to the reasonable satisfaction of Midwestern by the earlier of (a) the date falling ten Business Days after receipt of notice from Midwestern requiring that breach to be remedied, and (b) the date falling ten Business Days prior to the completion of the MLPL Reorganisation Agreement.

San Leon and/or San Leon Energy Nigeria may terminate the MLPL Reorganisation Agreement with immediate effect if there occurs a MLPL Midwestern Breach and such breach (A) is not capable of remedy, or (B) is capable of remedy but is not remedied to the reasonable satisfaction of San Leon by the earlier of (a) the date falling ten Business Days after receipt of notice from San Leon requiring that breach to be remedied, and (b) the date falling ten Business Days prior to completion of the MLPL Reorganisation Agreement.

Midwestern has agreed (in the period up to completion of the MLPL Reorganisation Agreement) to use reasonable endeavours to procure that MLPL, any subsidiary undertaking of MLPL from time to time, and Eroton will not undertake a number of customary interim covenants such as varying its share capital, making acquisitions or disposals, entering into joint ventures or material agreements or commencing or settling any litigation. San Leon has agreed to not pay or recommend for declaration any dividend, redeem, repurchase, reduce, waive or repay any of its share capital, and to procure that the number of San Leon Shares which may be issued prior to Completion, or form the subject of any award, option or other right to San Leon Shares granted before Completion, under the San Leon Employee Incentive Plan, San Leon warrants or any other incentive arrangement, does not exceed 44,991,302 San Leon Shares without the prior written approval of Midwestern.

Midwestern shall enter into a lock-in agreement in a form set out in paragraph 16 of Part 1 of this Document prior to the date on which San Leon announces the transaction under the MLPL Reorganisation Agreement (the "MLPL Announcement Date").

Under the terms of the MLPL Reorganisation Agreement, Midwestern has provided certain warranties to San Leon and San Leon Energy Nigeria, and San Leon has given certain warranties to Midwestern. These warranties are customary for a transaction of this type. The warranties will be given at the MLPL Announcement Date and will be repeated on the date of this Document, the date of any Supplementary Admission Document completion of the MLPL Reorganisation Agreement.

Under the terms of the MLPL Reorganisation Agreement and pursuant to the terms of a Tenth Payment Waiver, San Leon has agreed with MLPL, Midwestern and Martwestern to a further extension of the Extended Conditional Payment Waivers until the sooner of completion of the MLPL Reorganisation Agreement or termination of the MLPL Reorganisation Agreement. Interest continues to accrue on the principal amounts waived pending completion of the MLPL Reorganisation.

The MLPL Reorganisation Agreement will be governed by English law.

It is emphasised that whilst the MLPL Reorganisation Agreement has been entered into, it is subject to a number of conditions including in relation to the MLPL Eroton Condition. In relation to the MLPL Eroton Condition, the Sahara OML 18 Acquisition Agreement has not been executed at this point and is only expected to be executed once Eroton has funds available to it to satisfy the consideration which will require the definitive documents for the New Eroton Debt Facilities to be entered into and there will be additional conditions to drawdown to be satisfied prior to utilisation of the facilities. Accordingly, whilst the terms have been negotiated, there can be no certainty that they will be entered into or the final terms on which they will be entered into. Accordingly, there can be no certainty that the Sahara OML 18 Acquisition Agreement will be executed and become effective.

Whilst the Bilton OML 18 Acquisition Agreement has been executed, the Bilton OML 18 Acquisition Agreement is also conditional upon the Sahara OML 18 Acquisition Agreement being entered into and completing. Accordingly as there can be no

certainty that the Sahara OML 18 Acquisition Agreement will be entered into or the terms on which it will be entered into and there is no certainty that this condition will be satisfied.

The Sahara OML 18 Acquisition Agreement, if executed, will be and the Bilton OML 18 Acquisition Agreement is subject to certain conditions before completion can occur, details of the key conditions are summarised in paragraphs 3.3.1 and 3.3.2 below. In particular, the Sahara OML 18 Acquisition Agreement, if executed will be, and the Bilton OML 18 Acquisition Agreement is conditional on the entry into the Settlement Agreements associated with certain litigation between Eroton, Bilton and Sahara. Further details of the Settlement Agreements and the associated litigation are included in paragraphs 3.3.3 and 3.4 below.

It is emphasised that the MLPL Reorganisation is conditional, amongst other things, on the entry into and the utilisation of the New Eroton Debt Facilities and the Eroton OML 18 Transactions completing. Whilst the terms of the New Eroton Debt Facilities have been approved by the lead lender, Afreximbank and the terms of the Sahara OML 18 Acquisition Agreement have been negotiated and the Bilton OML 18 Acquisition Agreement has been executed, subject to certain conditions, they are dependent on, inter alia, the New Eroton Debt Facilities being entered into and becoming unconditional and being drawn down. Furthermore, the New Eroton Debt Facilities have not been entered into and once entered into will be subject to additional conditions to drawdown which will have to be satisfied prior to utilisation of the facilities and for completion of the Sahara OML 18 Transaction and the Bilton OML 18 Transaction. These matters are not under the Company's control. Accordingly, there is no certainty that the New Eroton Debt Facilities will be entered into or that the Eroton OML 18 Transactions will proceed or that they will proceed on the currently proposed terms. Only once the Eroton OML 18 Transactions complete and the other conditions to the MLPL Reorganisation have been satisfied will the Company be able to proceed with the MLPL Reorganisation and Re-Admission. There can therefore be no guarantee that the MLPL Reorganisation and Re-Admission will occur.

The number of shares to be subscribed for by Midwestern as part of the MLPL Reorganisation has been agreed and fixed between Midwestern and the Company and is not subject to adjustment by reference to the market price of the Ordinary Shares or New Ordinary Shares.

Accordingly, in order for the MLPL Reorganisation to proceed the market price of the New Ordinary Shares on the date of allotment of the MLPL New Shares must be not greater than the value per share to be recorded in the MLPL Valuation Report.

A summary of the key risks relating to the Eroton OML 18 Transactions and associated financing are set out in paragraph 2 of Part 4 of this Document.

Only once the New Eroton Debt Facilities have been entered into and drawn down and the Eroton OML 18 transactions complete and the other conditions to the MLPL Reorganisation have been satisfied will the Company be able to proceed with the MLPL Reorganisation and Re-Admission.

The Historical Financial Information for MLPL is set out in Part 8B of this Document.

Further details of the risks surrounding the MLPL Reorganisation are set out in Part 4 of this Document.

5 ELI Reorganisation

San Leon and Midwestern propose to effect a further reorganisation to consolidate Midwestern's holdings in the Company and ELI into a single holding in the Company, with the Company holding an additional c.14% interest in ELI.

The ELI Reorganisation, which is conditional (amongst other things) upon the reorganisation of UPIL as well as ELI Shareholder Consent and completion of the MLPL Reorganisation, is made up of the following constituent parts:

• the issue of 73,782,535 New Ordinary Shares pursuant to the ELI New Shares Subscription Agreement with such amount being left outstanding between San Leon and for the benefit of the Company;

• the transfer by Midwestern of its 13.77% equity interest in ELI Malta to San Leon ELI; and

• the transfer by Midwestern of its associated loan receivable of US$15,300,000 from ELI Malta to San Leon ELI.

Details of the ELI New Shares Subscription Agreement and other material documentation to be entered into in relation to the ELI Reorganisation are summarised in paragraph 5.2 below.

The ELI Reorganisation is not conditional upon any of the elements of the Further ELI Investments and may proceed whether or not some or all of the Further ELI Investments have completed.

The ELI Reorganisation is conditional upon, amongst other things: (i) completion of the MLPL Reorganisation and (ii) Midwestern, which currently holds its interest in ELI indirectly through UPIL holding all necessary rights to transfer its 13.77% equity interest in ELI Malta and to assign the ELI Receivable pursuant to the ELI Reorganisation which also requires UPIL Shareholder Consent, UPIL board approval as well as ELI Shareholder Consent. Whilst Midwestern has discussed the transfer of these assets to Midwestern with some of the other shareholders of UPIL, no consents have been granted, agreements executed or structure agreed at this point and the implementation of any such structure will require the support and actions by the other shareholders in UPIL whose actions are outside the control of Midwestern. Accordingly there can be no certainty that the transactions necessary for Midwestern to own the assets to be transferred pursuant to the ELI Reorganisation will be entered into or the terms on which they will be entered into.

Whilst the MLPL Reorganisation is not conditional upon the ELI Reorganisation, the ELI Reorganisation will only take place once these and the other ELI Conditions set out in the ELI Reorganisation Agreement have been satisfied. However, completion of the ELI Reorganisation is not conditional upon completion of the Further ELI Investments.

The number of shares to be subscribed for by Midwestern as part of the ELI Reorganisation has been agreed and fixed between Midwestern and the Company and is not subject to adjustment by reference to the market price of the Ordinary Shares or New Ordinary Shares.

Accordingly, in order for the MLPL Reorganisation to proceed which is a condition to the ELI Reorganisation the market price of the New Ordinary Shares on the date of allotment of the MLPL New Shares must be not greater than the value per share to be recorded in the MLPL Valuation Report. Similarly, in order for the ELI Reorganisation to proceed, the MLPL Reorganisation must complete and the market price of the New Ordinary Shares on the date of allotment of the ELI New Shares must be not greater than the value per share to be recorded in the ELI Valuation Report.

5.2.1  ELI New Shares Subscription Agreement

The ELI New Share Subscription Agreement for the subscription of the ELI New Shares to be entered into between Midwestern and San Leon whereby Midwestern will apply for the allotment of the New ELI Shares at the value of the ELI New Shares to be recorded in the ELI Valuation Report.

The subscription is subject to the satisfaction of the conditions outlined in the ELI Reorganisation Agreement, other than the condition relating to the ELI Reorganisation Shares Admission.

The consideration for the allotment of shares will be left outstanding as a debt from Midwestern to San Leon, pursuant to the terms of the ELI Reorganisation Loan Notes.

The ELI New Shares Subscription Agreement will be governed by English law.

Accordingly, in order for the ELI Reorganisation to proceed, the MLPL Reorganisation must complete and the market price of the New Ordinary Shares on the date of allotment of the ELI New Shares must be not greater than the value per share to be recorded in the ELI Valuation Report.

5.2.2  ELI Reorganisation Loan Notes

The ELI Reorganisation Loan Notes to be issued by Midwestern to San Leon evidencing a money debt owed by Midwestern to San Leon pursuant to the ELI New Shares Subscription Agreement. Under the terms of the ELI Reorganisation Loan Notes, San Leon can redeem the note in whole or in part at any time after completion of the ELI Reorganisation Agreement and Midwestern can prepay the debt due under the ELI Reorganisation Loan Notes at any time after completion of the ELI Reorganisation Agreement.

The ELI Reorganisation Loan Notes will be unsecured and will not accrue interest. San Leon can transfer the ELI Reorganisation Loan Notes to any member of its group without the consent of Midwestern.

The ELI Reorganisation Loan Notes will be governed by English law.

5.2.3  ELI Reorganisation Agreement

The ELI Reorganisation Agreement to be entered into in respect of the reorganisation of ELI between Midwestern, San Leon and San Leon ELI pursuant to which Midwestern will direct and procure the transfer of 53,700 ELI Shares and its associated loan receivable in the principal amount of approximately US$15,300,000 (the "ELI Receivable") from ELI Malta to San Leon ELI. The consideration will be an amount equal to the subscription price for the ELI New Shares. San Leon ELI's obligation to pay the consideration will be set off against Midwestern's obligation to pay the amount outstanding under the ELI Reorganisation Loan Notes.

Completion of the ELI Reorganisation Agreement is subject to the following conditions (the "ELI Conditions"):

(i) the unconditional completion of each of the following: (A) Midwestern undertaking the necessary actions and documentation to direct or procure transfer of the full legal and beneficial title to the ELI Shares to San Leon ELI free from any encumbrances, subject to the ELI-GTB Share Charge, and (ii) Midwestern holding all necessary rights in the ELI Receivable to direct or procure the assignment of all rights and interest in the ELI Receivable to San Leon ELI free from any encumbrances (the "UPIL Condition") (it should be emphasised that the UPIL Condition is dependent on, amongst other things, the approval of the other shareholders of UPIL, which is not under the Company's control);

(ii) the release of the security granted by ELI under the ELI-GTB Share Charge in respect of the ELI Shares has received consent (the "ELI Shares Condition");

(iii) the completion of the MLPL Reorganisation Agreement (the "MLPL Condition");

(iv) the admission of all of the ELI New Shares to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules (the "ELI Admission Condition");

(v) the release of the ELI Valuation Report to Midwestern;

(vi) the notification to, and the no-objection and approval of, the NMDPRA, and the notification to, and the no-objection by the Maltese National Foreign Direct Investment Screening Office of the Transaction to the transactions which are contemplated under the ELI Reorganisation Agreement (the "ELI Regulatory Conditions");

(vii) the letter to be signed by the ELI Shareholders, addressed to ELI from the ELI Shareholders, consenting to the ELI Shareholders' Agreement being amended, changed, altered or waived being executed by the ELI Shareholders;

(viii) San Leon ELI having signed and released the Deed of Accession to ELI (the "Deed of Accession Condition") there being no breach by Midwestern of the interim period covenants given by Midwestern under the ELI Reorganisation Agreement (as described below) which individually or together with any other such breach, results or is reasonably likely to result in a diminishment of the net assets of the ELI or its group by US$10,000,000 or more, and there being no material breach (which is unremedied) of the warranties given by Midwestern at the time of signing of the ELI Reorganisation Agreement (each a "ELI Midwestern Breach"); and

(ix) there being no breach by San Leon of: (i) its covenant not to pay or declare dividends in the period between signing and completion of the ELI Reorganisation Agreement (ii) its covenant not to, or agree to, redeem, repurchase, reduce, waive or repay any of its share capital, (iii) its covenant to procure that the number of San Leon Shares which may be issued prior to Completion, or form the subject of any award, option or other right to San Leon Shares granted before Completion, under the San Leon Employee Incentive Plan, San Leon warrants or any other incentive arrangement, does not exceed 44,991,302 San Leon Shares without the prior written approval of Midwestern, or (iv) the warranties given by San Leon under the ELI Reorganisation Agreement which, individually or together with any other such breach, results or is reasonably likely to result in a diminishment of the net assets of the San Leon Group by US$10,000,000 or more in aggregate (which is unremedied) ("San Leon Breach").

San Leon shall use all reasonable endeavours to satisfy the MLPL Condition to the extent such obligation is dependent on San Leon.

Midwestern has undertaken to use all reasonable endeavours to procure that (A) UPIL exercises all of its rights as a shareholder of ELI to procure and that (B) each director of ELI or its subsidiaries (together the "ELI Group Companies" and each an "ELI Group Company") appointed by it or UPIL exercises their powers and rights to procure (so far as it is able through the exercise of such rights/powers) that no ELI Group Company undertakes a number of customary interim covenants such as varying its share capital, making acquisitions or disposals, entering into joint ventures or material agreements or commencing or settling any litigation. San Leon has agreed to not pay or recommend for declaration any dividend, redeem, repurchase, reduce, waive or repay any of its share capital, and to procure that the number of San Leon Shares which may be issued prior to Completion, or form the subject of any award, option or other right to San Leon Shares granted before Completion, under the San Leon Employee Incentive Plan, San Leon warrants or any other incentive arrangement, does not exceed 44,991,302 San Leon Shares without the prior written approval of Midwestern.

The ELI Regulatory Conditions may be waived by written agreement between San Leon and Midwestern at any time on or before 08:00 on 31 December 2022 (or such other date as San Leon or Midwestern agrees in writing) (the "ELI Long Stop Date"). San Leon may waive a material breach by Midwestern and Midwestern may waive a material breach by San Leon by written notice at any time before 08:00 on the ELI Long Stop Date.

The ELI Reorganisation Agreement may be terminated by San Leon or Midwestern with immediate effect if an ELI Condition has not been satisfied or has become impossible to satisfy by 08:00 on the ELI Long Stop Date.

Midwestern may terminate the ELI Reorganisation Agreement if there occurs a San Leon Breach which (A) is not capable of remedy, or (B) is capable of remedy but is not remedied to the reasonable satisfaction of Midwestern by the earlier of (a) the date falling ten Business Days after receipt of notice from Midwestern requiring that breach to be remedied, and (b) the date falling ten Business Days prior to the completion of the ELI Reorganisation Agreement.

San Leon may terminate the ELI Reorganisation Agreement if there occurs a ELI Midwestern Breach and such breach (A) is not capable of remedy, or (B) is capable of remedy but is not remedied to the reasonable satisfaction of San Leon by the earlier of (a) the date falling ten Business Days after receipt of notice from San Leon requiring that breach to be remedied, and (b) the date falling ten Business Days prior to completion of the ELI Reorganisation Agreement. Midwestern may terminate the ELI Reorganisation Agreement if at any time, a third party announces a firm intention to make an offer for the Company pursuant to Rule 2.5 of the Irish Takeover Rules.

Under the terms of the ELI Reorganisation Agreement, Midwestern has provided certain warranties to San Leon and San Leon Financing and San Leon have given certain warranties to Midwestern. These warranties are customary for a transaction of this type. The warranties will be given at the date on which San Leon announces the transaction under the ELI Reorganisation Agreement (the "ELI Announcement Date") and will be repeated on completion of the ELI Reorganisation Agreement.

The ELI Reorganisation Agreement will be governed by English law.

Accordingly, in order for the MLPL Reorganisation to proceed, which is a condition to the ELI Reorganisation, the market price of the New Ordinary Shares on the date of allotment of the MLPL New Shares must be not greater than the value per share to be recorded in the MLPL Valuation Report. Similarly, in order for the ELI Reorganisation to proceed, the MLPL Reorganisation must complete and the market price of the New Ordinary Shares on the date of allotment of the ELI New Shares must be not greater than the value per share to be recorded in the ELI Valuation Report.

5.2.4  ELI/Africa Finance Corporation Facility Agreement

On 7 December 2021, ELI Nigeria (as guarantor), ELI Malta (as borrower) and Africa Finance Corporation (as mandated lead arranger) (amongst others) entered into a US$130,000,000 senior secured term loan facility agreement (the "AFC Facility Agreement"). The original lenders under the AFC Facility Agreement are Africa Finance Corporation, with a commitment of US$110,000,000 and Zenith Bank PLC, with a commitment of US$20,000,000. The purpose of the AFC Facility Agreement, among other things, is to refinance an existing loan agreement between (amongst others) ELI Nigeria as borrower and GTB as agent for the financing of the costs in connection with the construction and development of the OML 18 alternative crude oil evacuation system (ACOES). The facility will mature at the earlier of either the date falling sixty months after the first utilisation date under the facility or 30 September 2026.

Utilisation by ELI Malta of the AFC Facility Agreement is conditional on the satisfaction of various conditions precedent, some of which remain outstanding, including Africa Finance Corporation receiving evidence that the reserve-based financing currently provided to Eroton (being the Existing Eroton Debt Facility) has been refinanced on terms satisfactory to the lenders under the AFC Facility Agreement and that all conditions precedent to the effectiveness of that refinancing have been satisfied.

Under the AFC Facility Agreement, ELI Malta may, with ten business days prior notice, cancel the whole or any part (being a minimum amount of US$5,000,000 and integral multiples of US$1,000,000) of the facility amount available to it. ELI Nigeria may also, with ten business days' prior notice, prepay the whole or any part of a drawdown under the facility (but, if in part, being a minimum amount of US$5,000,000 and integral multiples of US$1,000,000). ELI Nigeria acts as guarantor under the AFC Facility Agreement, and guarantees ELI Malta's obligations under the facility.

ELI Malta is obliged to provide the agent under the AFC Facility Agreement with its quarterly and yearly financial statements. The statements must include a balance sheet, profit and loss account and cashflow statement and must be accompanied with a compliance certificate setting out the computations as to its compliance with the financial covenants under the facility. Under the terms of the AFC Facility Agreement ELI Malta is not allowed to change its accounting reference date.

Under the terms of the AFC Facility Agreement, without the agent's consent ELI Malta cannot be a creditor or provide any form of credit to any person, it also cannot dispose of any asset except certain assets such as obsolete or redundant vehicles, plant and equipment. ELI Malta also cannot merge with another company or acquire shares in another company or business other than assets in connection with the design, construction, procurement, commissioning, installation and operation of the ACOES.

The AFC Facility Agreement is governed by English law.

5.2.5  Licenses and permits

ELI has obtained various licences in order to establish and operate a pipeline and Floating Storage and Offloading terminal. These include, but are not limited to, a license giving it the right to commence construction of an ACOES to support the OML 18 operations and the establishment of the proposed floating storage offloading terminal project; a license for a pipeline to a floating storage and offloading terminal located offshore on the Niger Delta; a license giving ELI the right to take possession of and use land for constructing, maintaining and operating an oil pipeline for a period of 20 years; a licence affirming the establishment of ELI Akaso floating storage and offloading (FSO) oil terminal as a crude oil terminal within a safety exclusion zone; and a license for the calibration of 17 cargo tanks on board the floating storage and offloading vessel carried out in 2019, with the license running to August 2024.

Further details of the other material contracts to which ELI is a party are set out in paragraph

10.24 of Part 12 of this Document.

The Historical Financial Information for ELI is set out in Part 8C of this Document.

Further details of the risks surrounding the ELI Reorganisation are set out in Part 4 of this Document.

PART 3

FURTHER ELI INVESTMENTS

1. Introduction

San Leon currently holds 38,998 ELI Shares representing a 10% equity interest in ELI. As part of the ELI Reorganisation, San Leon will acquire an additional 53,700 ELI Shares, being Midwestern's indirect 13.77% equity interest in ELI. The Company also currently has a conditional interest in 12,959 ELI Shares representing a 3.323% equity interest in ELI as a result of a series of transactions announced on 24 June 2021 and 12 February 2022, details of which are contained in paragraphs 2 and 3 below.

Upon completion of both the ELI Reorganisation and all of the Further ELI Investments, San Leon will become the largest shareholder in ELI, with its stake rising to 228,458 ELI Shares representing 50.64% and will be a significant lender to ELI, holding a total of US$48.3 million of loans (plus accrued interest) to ELI. The Further ELI Investments are not conditional upon the ELI Reorganisation or the MLPL Reorganisation but are all conditional upon shareholder approval as well as the conditions referred to below.

2. Walstrand Acquisition and Option

On 24 June 2021, the Company announced the further conditional purchase of an interest in ELI, namely, that the Company will pay US$2,000,000 for 5,159 ELI Shares being 1.323% of ELI and received an option to purchase an additional stake of 16,777 shares in ELI being 4.302% for US$6,500,000.

On 23 June 2021 an agreement was entered into between Walstrand and San Leon ELI pursuant to which Walstrand agreed, subject to obtaining the consent of GTB, to (i) make an initial transfer of 5,159 shares in ELI to San Leon ELI for a total consideration of US$2,000,000 and (ii) grant an call option to San Leon ELI to acquire from Walstrand an additional 16,777 shares in ELI for a total consideration of US$6,500,000. The call option granted in the agreement carried an expiration date of 31 December 2021, which is in the process of being extended in light of the transactions contemplated under this Document.

The effective date of the initial transfer is stated as 23 June 2021, irrespective of the date on which the GTB consent was obtained, and the effective date of the transfer the subject of the call option granted by Walstrand shall be the date on which payment of the option consideration of US$6,500,000 is paid by San Leon on behalf of San Leon ELI. Whilst the Walstrand Acquisition and Option Agreement was entered into on 23 June 2021, the agreement remains conditional, including as to the consent of the other shareholders in ELI and has not been completed. Consent of the other shareholders is expected to be forthcoming once the Ocean Pearl ELI Acquisition referred to below has been completed.

The agreement is governed by English law.

3. February 2022 Loan and February 2022 Purchase

In February 2022, San Leon Financing advanced US$2,000,000 to ELI by way of a loan and Walstrand agreed to transfer 7,800 ELI Shares representing 2% of ELI to San Leon.

On 14 February 2022, San Leon Financing (as lender) and ELI (as borrower) entered into a supplemental investment agreement pursuant to which San Leon Financing grants to ELI an additional unsecured term loan facility of a total principal amount not exceeding US$2,000,000 for an availability period of 30 days from 14 February 2022 to 16 March 2022 for the purpose of financing the design, construction, commissioning and operation of the ACOES and FSO by ELI.

The agreement is supplemental to the initial investment agreement entered into by and between San Leon Financing (as lender) and ELI Malta (as borrower) on 31 July 2020. Further details of this investment agreement are set out in paragraph 10.24.7 of Part 12 of this Document.

ELI Malta issued a drawdown request in respect of the facility on 14 February 2022. ELI Malta shall commence repayment of the facility no later than the day falling on the first anniversary of drawdown. ELI Malta shall repay 1/13th of the principal of the facility together with accrued interest for the 12 month period since drawdown. The supplemental investment agreement is governed by English law.

On 14 February 2022 an agreement was entered into between Walstrand and San Leon ELI pursuant to which Walstrand agreed, subject inter alia to obtaining the consent of GTB and the consent of the other shareholders in ELI, to transfer 7,800 shares in ELI Malta to San Leon ELI at nominal value for a total consideration of US$91.46. The shares to be transferred by Walstrand amounted to 2% of the entire issued share capital of ELI Malta as at the effective date.

The effective date of the transfer is stated as 14 February 2022, irrespective of the date on which the GTB and shareholder consent is obtained.

By way of a letter of undertaking entered into on 14 February 2022 by and between, inter alia, San Leon Financing and Walstrand, Walstrand also undertook by way of an adjustment mechanism that, in the event of a subsequent dilutive issue of shares by ELI Malta, it will transfer to San Leon ELI (subject to obtaining consent from GTB and other shareholders in ELI) such number of shares as is required to ensure that San Leon ELI maintains a proportion of no less than 2% of the share capital in ELI Malta (being the proportion of the issued share capital of ELI Malta transferred to San Leon ELI by virtue of the February 2022 Walstrand Acquisition Agreement). The transfer of any additional shares in connection with this undertaking will also be at nominal value.

Whilst the February 2022 Walstrand Acquisition Agreement was entered into on 14 February 2022, the agreement remains conditional and has not been completed.

The acquisition agreement and letter of undertaking are governed by English law

4. New ELI Loan and New ELI Subscription

A new loan from San Leon to ELI of US$16,000,000 at a coupon of 14% per annum over four years, and repayable quarterly following a one-year moratorium is in agreed form and with the parties for signing, drawdown being conditional on passing of Resolution 1. In addition, San Leon has agreed to a conditional subscription at nominal value for 48,748 ELI Shares representing a 10% new equity holding in ELI and anti-dilution shares issued to maintain its existing 13.323% interest in ELI which are also with the parties for signing.

The terms of a new loan agreement have been agreed between ELI Malta and San Leon Energy Financing pursuant to which San Leon Energy Financing has agreed to loan ELI Malta an unsecured sum of up to US$16,000,000. The loan is expected to be drawn down within 30 days of the passing of Resolution 1. It is intended that the loan will be used to finance the design, construction, commissioning and operation of the ACOES and FSO by ELI. The loan agreement is with the parties for signing.

The first repayment date will be a date specified by ELI Malta in their drawdown request, falling between 6 and 18 months from the drawdown date and the term of the loan, being a date during the 36 months following the first repayment date. The interest is 14% per year, and interest accrues every three months from the drawdown date.

Repayment by ELI will be on the first repayment date, in a proportion calculated by deducting the time between the drawdown date ("B") and the first repayment date from the term of the loan in the drawdown request ("A"), divided by the interest period ("C"). ELI will then at the end of each

interest period repay a proportion calculated on the same basis as for the first repayment date ((A-B)/C), plus any interest which has accrued for that period.

ELI is required to obtain the consent of GTB, or any new senior lender should GTB's loan be refinanced, in respect of the loan agreement within six months of the drawdown date. Failure to obtain the consent will amount to an event of default.

The loan will be governed by English law.

ELI Malta and San Leon ELI have agreed to enter the terms of a share purchase and allotment agreement pursuant to which, and conditional, amongst other things, on passing of Resolution 1, ELI Malta shall issue and San Leon ELI shall acquire 48,748 ELI Shares (the "Allotment Shares"), with each share being fully paid up and to be allotted to San Leon ELI following the approval of the shareholders of ELI Malta to increase the authorised and issued share capital in ELI Malta. The purchase price for the Allotment Shares shall be a consideration of US$121.95, payable in cash by the Company. The agreement will be governed by English law. The share purchase and allotment agreement is with the parties for signing.

5. Ocean Pearl ELI Acquisition

On 8 July 2022, the Company announced the further conditional purchase of an interest in ELI, namely, that the Company will pay US$15,000,000 for 52,647 ELI Shares representing 11.669% of ELI (current percentage holding is 13.500% which will be reduced upon the issue of new equity as detailed above).