Page 18 - AfrOil Week 35

AfrOil NEWS IN BRIEF AfrOil

The two-and-a-half-month survey is scheduled its costs plus a share of cash flow thereafter. In satisfaction (or waiver) of the conditions prece-
to commence in Q3-2020, adding to other recent exchange, Decklar is entitled to priority recov- dent contained in the Subscription Agreement.
activity in North-west Africa for Shearwater, and ery of its capital from 80% of distributable funds. In the event the transactions contemplated by
will be carried out by the SW Empress (formerly After achieving cost recovery, Decklar’s profit the Subscription Agreement are not completed
the Polar Empress). share is based on a sliding scale starting at 80% on or prior to September 30, 2020, Decklar will
Shearwater GeoServices, August 28 2020 and declining to 40% once cumulative produc- be required to repay the Deposit to San Leon
tion exceeds 10mn barrels. within three months of that date.
Subscription Agreement: San Leon has A further announcement will be made in
FINANCIAL entered into a subscription agreement with relation to the completion of the Subscription
Decklar. The Subscription Agreement entitles Agreement.
San Leon secures funding San Leon to purchase $7.5mn of 10% unse- San Leon Energy, September 01 2020
cured subordinated loan notes of Decklar and
for development of Oza 1,764,706 ordinary shares of Decklar (repre- Africa Oil receives fourth
senting 15% of the enlarged share capital of
oilfield in Nigeria via Decklar) for a cash consideration of $7.5mn dividend from Nigerian
and NGN1,764,706 (circa $4,600) respectively.
loan to Decklar Petroleum In addition, Decklar and San Leon have entered asset Prime Oil and Gas
into an option agreement that, at San Leon’s sole
San Leon Energy, the independent oil and gas discretion, entitles San Leon to purchase an Africa Oil Corp has announced that it has
production, development and exploration additional $7.5mn of Loan Notes and 2,521,008 received its fourth dividend from Prime Oil and
company focused on Nigeria, has condition- Decklar Shares (representing an additional 15% Gas, a company that holds interests in deepwater
ally agreed to invest $7.5mn by way of a loan to of the enlarged share capital of Decklar, together Nigeria production and development assets.
Decklar Petroleum, the local subsidiary of Asian with a gross-up of the original 15% so as to pro- Prime has distributed a $50mn dividend with
Mineral Resources, listed on the Canadian TSX vide San Leon with a total of 30% of the enlarged a net payment to Africa Oil of $25mn related
Venture Exchange. Decklar is the holder of a Risk share capital of Decklar) for a cash consideration to its 50% interest. The Company has applied
Service Agreement (RSA) with Millenium Oil of $7.5mn and NGN2,521,008 (circa $6,500), $17.7mn of this dividend to pay down the BTG
and Gas Company on the Oza field in Nigeria. respectively, at any time until the date that is 45 term loan, reducing the outstanding balance to
Until the loan and its interest are repaid, 100% days after the well test results of the first develop- $176.9mn.
of the Available Funds (as defined below) that ment well on the Oza oilfield have been delivered The Company has received a total dividend
can be distributed from Decklar’s RSA proceeds to San Leon. amount of $137.5mn since the closing of the
will be paid to San Leon in satisfaction of those The Subscription Agreement provides for Prime acquisition on January 14, 2020.
payments. San Leon will also subscribe for a 15% certain conditions precedent to be confirmed Africa Oil Corp., August 31 2020
equity interest in Decklar. prior to finalising and issuing the Loan Notes
The Oza oilfield was formerly operated by and Decklar Shares, including entering into
Shell Petroleum Development Co. of Nigeria Ltd. an agreed form of shareholders’ agreement PERFORMANCE
(SPDC). The field has three wells and one side in respect of Decklar and the restructuring of
track drilled by Shell between 1959 and 1974. certain historical indebtedness by the owner/ Panoro Energy announces
During the period when Shell was the operator, operator of the Oza oilfield, Millenium, to the
there were two periods of extended production satisfaction of San Leon at its sole discretion and financial and operational
testing from the Oza-1, -2 and -4 wells. The field the approval of the transaction contemplated by
was never tied into an export facility and was not the Subscription Agreement by the TSX Venture H1-2020 results
fully developed by Shell and put into commercial Exchange.
production. In addition, Millenium has entered into a Panoro Energy has announced its financial and
In 2003, the Oza oilfield was awarded to non-binding term sheet with a local Nigerian operating results for the six months ended June
Millenium, having won the bid during the Mar- bank and the trading subsidiary of a major oil 30, 2020.
ginal Fields Licensing Round. Since Millenium’s company for up to $33mn in a five-year term John Hamilton, CEO of Panoro, commented:
acquisition of the Oza oilfield in 2003, approxi- debt that provides a use of proceeds of $22mn “Further to the decisive actions taken earlier in
mately $50mn has been spent on infrastructure to refinance existing debt of Millenium and the year, the second quarter has seen a gradual
in support of a restart of production, including $11mn for development activities on the Oza return to a more stabilised operating environ-
an export pipeline that connects the Oza oilfield oilfield, based on entering into a crude sales and ment, and in fact oil production has performed
production into the Trans Niger Pipeline (TNP), purchase contract. very well, with record quarterly output achieved.
which goes to the Bonny Export Terminal, a Decklar is expected to provide a corporate We are very excited by the newly reprocessed
lease automatic custody transfer (LACT) unit guarantee as part of this $33mn term debt facil- Dussafu seismic, acquired by Panoro in 2013,
fiscal metering system, infield flow-lines, man- ity. If San Leon subscribes for the Option Loan indicating that the Hibiscus area volumes could
ifolds and a rental 6,000 barrel per day (bpd) Notes then, together with the amount subscribed potentially be three times as big as initially esti-
early production facility (EPF). The RSA entered under the Loan Notes, upon completion these mated. Our strong hedging position has yielded
into between Decklar and Millenium provides arrangements will represent new funding for robust results, and our hedges extend until the
Decklar with the majority share of production Decklar of up to $26mn. end of 2021. Despite significant challenges
and associated cash flow from the Oza oilfield Concurrently with entering into the Sub- remaining due to COVID-19, the Company
in exchange for funding and technical assistance scription Agreement, San Leon has advanced is well positioned to deliver organic growth
to restart commercial production and full field $750,000 as an initial deposit with the release of through a focus on boosting production in Tuni-
development; including a preferential return of the balance of the $7.5mn being subject to the sia and on restarting delayed activity in Gabon.”

P18 www. NEWSBASE .com Week 35 02•September•2020