Page 16 - AfrOil Week 05 2022

AfrOil NEWS IN BRIEF AfrOil

INVESTMENT Share Purchase Agreement signed with $7.5mn loan to Decklar Resources, via 10% per
Energy Flow Global Ltd, a private company with annum unsecured subordinated loan notes of
SDX Energy announces upstream and oilfield services activities in Egypt, Decklar. Decklar is the holder of a Risk Service
the Middle East and Asia, to dispose of 33% of Agreement with Millenium Oil and Gas Co. Ltd
proposed disposal of 33% the equity in Sea Dragon Energy (Nile) BV, the in relation to Oza. San Leon also announced that
it would conditionally subscribe for a 15% equity
entity that holds SDX’s gas producing, develop-
of South Disouq for $5mn ment and exploration assets in the South Disouq interest in Decklar at nominal value.
concession, located in the Nile Delta.
As previously announced, $6.75mn of San
AIM-listed SDX Energy, the MENA-focused oil Transaction effective date of February 1, Leon’s proposed investment remained in escrow
and gas company, has announced the proposed 2022, with $5.5mn cash consideration to be and was to be released upon satisfaction (or
disposal of 33% of the shares in the entity that received throughout Q2-2022 and Q3-2022 by waiver) of certain conditions precedent. Despite
holds its interests across its South Disouq con- way of contributions to SDX’s remaining capital delays to concluding the transaction docu-
cession and its intention to initiate a share buy- and operational expenditure in South Disouq. ments, Decklar has performed the workover of
back programme of up to $3.0mn in H2-2022. FY 2020 profit before tax relating to the 33% the Oza-1 well, the results of which have already
All monetary values are expressed in US dollars equity being disposed equated to $240,000. been announced by San Leon.
net to the Company unless otherwise stated. Disposal proceeds allow the Company to In summary, the Oza-1 well test has indi-
Mark Reid, CEO of SDX, commented: “I am plan for a share buyback programme returning cated positive oil results from the lowermost
very pleased to announce that we have entered up to $3.0mn to shareholders in H2-2022 once zone, encountered gas in the middle zone and
into an agreement to dispose of 33% of our the consideration has been fully received, and oil in the uppermost zone. San Leon has evalu-
interests in the South Disouq concession for a investing the remainder into growth initiatives ated these results and the San Leon Board has
consideration of $5.5mn, which is a significant across the portfolio. recommended that it proceeds with an invest-
premium to the asset’s value within our market Completion of the transaction is subject to ment in Oza. Decklar is in agreement with that
capitalisation. the release of the share pledge held by the Euro- strategy and also to fully involve San Leon in
“We intend to use the proceeds to initiate pean Bank for Reconstruction and Development future development planning and determining
a share buyback programme of up to $3.0mn on the shares in (Nile) BV that are being trans- the location of the first new well to be drilled on
in H2 2022 with the remainder to be used for ferred to Energy Flow Global Limited. Energy the Oza oilfield.
investment into innovative, portfolio growth Flow Global will have the right to appoint a rep- Accordingly, San Leon has entered into an
opportunities which I look forward to updating resentative to the Board of Directors of (Nile) BV. amendment to its original agreement with Deck-
the market on in due course. SDX Energy, February 1 2022 lar, the principal terms of which are:
“In summary, this transaction allows us to 1) San Leon has agreed to proceed with its
achieve a number of our strategic objectives. San Leon Energy announces investment in Oza, waiving the remaining con-
Firstly, it permits us to return capital to our ditions precedent.
shareholders, which has been a long-term goal. amendment to investment 2) Of the $6.75mn of funds held in escrow,
Secondly, it provides capital to support growth $4.75mn has now been released to Decklar and
projects across the portfolio. And thirdly, it pro- in Nigeria’s Oza oilfield $2.0mn has been returned to San Leon pending
vides a clear value read across of GBP0.061 per final completion. San Leon is obliged to either
share for the full value of South Disouq. San Leon Energy, the independent oil and gas provide a further loan of $2.0mn to Decklar by
“We will retain 67% of our pre-transac- production, development and exploration com- April 30, 2022, or, alternatively, accept a pro rata
tion interests in the South Disouq concession, pany focused on Nigeria, has announced that its reduction in its shareholding in Decklar.
remaining as operator, continuing to benefit investment in the Oza oilfield in Nigeria is now 3) San Leon has agreed to waive its option to
from the cash-generation of the fields, while proceeding with the following amendments. invest an additional $7.5mn in Decklar.
reducing our risk exposure on the two South On September 1, 2020, San Leon announced The transactions contemplated by the Sub-
Disouq exploration wells to be drilled this year.” that it had conditionally agreed to provide a scription Agreement and Binding LOI are
subject to final approval by the TSX Venture
Exchange.
San Leon has previously advanced $750,000
to Decklar as an initial deposit. As a consequence
of the above transactions, upon completion
San Leon will be interested in $5.5mn of 10%
unsecured subordinated Decklar loan notes
and a 11.5% equity interest in Decklar, which
will be subscribed for at a nominal value of
NGN1,294,118 (approximately $3,400). The key
terms of the loan notes remain unchanged from
those described in the Company’s announce-
ment of September 1, 2020.
In its audited accounts for the year ended
December 31, 2020, Decklar reported a loss
before tax of $5.1mn and total assets of $6.0mn.
San Leon will be entitled to one seat on the board
of Decklar.
San Leon Energy, January 27 2022

P16 www. NEWSBASE .com Week 05 02•February•2022