Page 8 - AfrOil Week 26

AfrOil PERfoRManCE AfrOil
San Leon posts OML 18 progress
nIgERIa
NIGERIA-FOCUSED minnow San Leon Energy has resolved its legal issues with SunTrust Oil, brought the Akaso-15 well into production and posted improved cash ow for 2018, over 2017.
e company posted its 2018 results on June 27. Net cash ow for the year reached €26.8mn (US$30mn), from €7.9mn (US$8.85mn) in the previous year. Cash from its OML 18 asset, in Nigeria, reached €56.4mn (US$66.2mn) in 2018 with another €9.4mn (US$10.7mn) in the rst half of this year, to June 26.
Profit for 2018 reached €9.7mn (US$10.86mn), from a loss of €87.1mn (US$97.56mn) in 2017.
San Leon said it expected future cash to ow from its loan notes to Midwestern Leon Petro- leum, worth US$159.7mn as of June 26. It also holds a 10.58% indirect economic stake in OML 18 and is providing services to the operator of the Nigerian block.
Production from OML 18 was 45,008 barrels per day (bpd), before factoring in downtime and pipeline losses. Including this number brought sales down to around 30,069 bpd in 2018. Pro- duction is now around 49,000 bpd, before losses are calculated. Gas sales in 2018 averaged 943,000 cm per day, a er downtime.
Pipeline losses were calculated at 26%, for ows to the Bonny terminal. San Leon acknowl- edged that while this was higher than had been anticipated in 2016, it was down from the 35% reported in 2017. Losses have fallen further this year following improved metering, dropping to 18% in the rst four months of the year.
In addition to improved metering, San Leon noted progress was being made on a new export plan, involving a oating storage and o oading (FSO) vessel. is would include a dedicated export link running from OML 18 to the FSO, allowing the Nembe Creek Trunk Line (NCTL) to be avoided entirely. Sabotage and bunkering has led to frequent downtime on the NCTL.
Helping drive the increase was the Akaso-15 well. is was the rst of the new drilled wells, with work having begun on it in December 2018. Plans for a well test were announced at the end of February. is took longer than expected but, with a dual completion, reached 4,800 bpd. It is now producing.
e next well, the Akaso PMMO-1, is wait- ing to be completed. A er this, it will be called Akaso-16. e drilling rig is moving to the next location, Akaso MTMy-1.
Helping OML 18’s performance, Nigerian National Petroleum Corp. (NNPC) paid down arrears owed to the licence’s operator, Eroton Exploration and Production, for cash calls in
2015 and 2016. As of December 2018, NNPC owed US$93mn to the OML 18 group. e 2017 and 2018 cash calls have already been covered.
San Leon’s non-executive chaiman, Mutiu Sunmonu, said the company’s nancial position had “gone from strength to strength since this time last year. Income from the loan notes is con- tinuing, and the start of full drilling activity on OML 18 augurs well for income under the mas- terservicesagreementwithEroton.”
On July 1, San Leon said operator Eroton had received a 20-year renewal for OML 18. is licence now runs until 2039.
litigation
In addition to San Leon’s progress, operation- ally and nancially, the company announced an end to its legal dispute with SunTrust. Articles in the local press in May reported claims from SunTrust about San Leon’s acquisition of stakes in OML 18. SunTrust was also reported to have led a petition to wind up San Leon.
e London-listed company denied that Sun- Trust’s complaints had any legitimacy.
e two sides have now signed binding agree- ments ending all litigation against San Leon, with no considerations paid by either company. e settlement will be led in the High Court of Lagos.™
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w w w . N E W S B A S E . c o m Week 26 02•July•2019