Page 17 - AfrOil Week 26 2021

AfrOil NEWS IN BRIEF AfrOil

The equity being conditionally purchased and whilst also providing significant benefits to San Leon holds its current 10.58% indirect eco-
the equity that may be purchased via the option downtime and reductions in production losses nomic interest in OML 18. San Leon currently
are existing equity interests in ELI owned by for OML 18. Becoming a more influential share- has a 40% equity interest in MLPL. MLPL has a
Walstrand (Malta) Ltd, ELI’s largest shareholder. holder in ELI is consistent with our overall strat- 100% equity investment in Martwestern Energy
As previously announced, the ACOES is egy of developing the world class OML 18 asset Ltd, which in turn has a 98% economic interest
being constructed to provide a dedicated oil and building value for our shareholders.” in Eroton Exploration and Production Company
export route from OML 18, comprising a new San Leon Energy, June 24 2021 Ltd, which holds a 27% working interest in OML
pipeline from OML 18 and a floating storage 18 and is its operator.
and off-loading vessel (FSO). Once commis- San Leon and Midwestern are in discussions
sioned, which is expected to be during H2-2021, SERVICES for the Company to acquire the remaining 60%
the system is expected by Eroton to reduce the equity interest in MLPL from Midwestern. The
downtime and allocated pipeline losses currently Shelf Drilling awarded consideration for this, and other matters, would
associated with the Nembe Creek Trunk Line be satisfied by the issuance of a substantial num-
(NCTL), to below 10%. contract from Total E&P ber of new ordinary shares in San Leon to Mid-
The conditional investment will comprise western, such that Midwestern would become
of the Company investing $2mn for 1.323% of for Baltic jack-up rig the majority shareholder of San Leon.
ELI, with San Leon simultaneously receiving The proposed transactions described above
an option to conditionally purchase a further Shelf Drilling has secured a contract for the Bal- are at an early stage and will therefore be sub-
4.302% of ELI for $6.5mn. The total consider- tic jack-up rig with Total E&P Nigeria for oper- ject to a number of factors, including, inter alia,
ation payable should the Option be exercised in ations offshore Nigeria. The contract duration the completion of due diligence, negotiation of
full will therefore be $8.5mn and will be payable is for five wells – estimated to be 380 days, plus transaction documentation, regulatory approv-
by the Company in cash. additional option period – and is expected to als, a “whitewash” under the Irish Takeover Code
Any investment pursuant to the Further commence in June 2021. and shareholder approval. As such, there is no
Investment will be conditional on obtaining Shelf Drilling, June 29 2021 certainty that these transactions will proceed nor
the consent of Guaranty Trust Bank, which any certainty regarding the terms on which they
currently holds a pledge over the shares held by would proceed.
Walstrand (Malta) Ltd in ELI. The exercise of the INVESTMENT Midwestern currently holds more than 10%
Option will be at the sole discretion of the Com- of the Company’s ordinary shares. Accordingly,
pany, although such exercise will be subject to San Leon Energy makes Midwestern is classified as a related party under
the consent of GTBank. the AIM Rules and the transactions above in
As previously announced, the Company statement on proposed which Midwestern has an interest will therefore
currently holds a 10% equity interest in ELI. be treated as transactions with a related party
Following the completion of the Further Invest- transactions pursuant to rule 13 of the AIM Rules.
ment, San Leon will own a maximum of 15.625% San Leon Energy, June 24 2021
of ELI, assuming that the Option is exercised in San Leon, the independent oil and gas produc-
full. San Leon has also previously made share- tion, development and exploration company DPR representative
holder loans to ELI totaling $15.0mn which bear focused on Nigeria, notes the recent price move-
a coupon of 14% per annum. ment of its shares and press comment in Nigeria comments on Nigeria’s
The pipeline component of the ACOES is regarding the possibility of Midwestern Oil and
expected by ELI to have a throughput capability Gas Co. reversing into the Company. margin field bidding round
of around 100,000 barrels of oil per day, while the San Leon confirms that the Company is in
FSO has a storage capacity of 2mn barrels of oil. preliminary discussions with Midwestern about History was made on June 1, 2021, when the
Once commissioned, ELI’s charges are expected acquiring Midwestern’s indirect interest in the Federal Government granted licenses to Nige-
to be comparable to current NCTL handling OML 18 oil and gas block located onshore in rian investors for 57 marginal oilfields in the
fees. Nigeria. At this stage heads of terms for such a country’s oil-rich Niger Delta region.
Oisin Fanning, Chief Executive, commented: transaction have not been agreed. Any transac- Director of the Department of Petro-
“We are delighted to have conditionally agreed tion would involve San Leon acquiring the out- leum Resources (DPR), Sarki Auwalu, who
to increase our investment in ELI which owns standing shares not already owned by San Leon announced the awards in Abuja, said the 57
the ACOES project, which we believe will be an in relation to Midwestern Leon Petroleum Ltd marginal fields offered spanned land, swamp
important strategic asset that is expected to gen- (MLPL). San Leon is not contemplating acquir- and offshore locations. The award which came
erate regular cash flow once it is commissioned, ing Midwestern. barely one year after the Department of Petro-
In addition, and connected to any acquisition leum Resources (DPR) opened a bid process for
of MLPL, the Company is considering making 57 marginal fields on June 1, 2020, at the peak
further debt and equity investments in Energy of the COVID-19 pandemic, amid concerns
Link Infrastructure (Malta) Ltd (ELI) in addition that the round may eventually not hold due to
to the conditional investment in ELI announced ravaging impact of the pandemic on economic
this morning. activities not only in Nigeria but across the global
The acquisition by San Leon of the outstand- financial and oil markets.
ing shares in MLPL not already owned by San In the oil industry, demand and price of crude
Leon would constitute a reverse takeover under oil, Nigeria’s highest revenue earned dipped
rule 14 of the AIM Rules for Companies. treacherously as economic activities across the
MLPL is part of the structure through which world went mute.

Week 26 30•June•2021 www. NEWSBASE .com P17