Alternative Investment Market (AIM) listed San Leon Energy has completed a complex arrangement to secure a 9.72% indirect stake in Nigeria’s onshore Oil Mining Licence (OML) 18, for which it has been arranging finance since early 2016. San Leon shareholders voted in Dublin on September 20 to complete a GBP170.3 million (US$219.4 million) fundraising that had already been conditionally agreed with backers, by issuing 378.4 million new shares at a price of GBP0.45 (US$0.58) per share. It used the proceeds to acquire the stake in OML 18.
Dublin-headquartered San Leon said this enabled it to finalise the share acquisition by September 30, when its CEO, Oisin Fanning, described OML 18 as a “world-class” asset.
San Leon also said in a September 30 operational update that production at OML 18 was running at 54,000 bpd of oil. The company said it would also receive interest payments taken from cash flows.
Eroton, the Nigerian operator of the licence, has deployed “considerable on-ground resources” to carry out development activities to increase production from OML 18, it continued. San Leon expects to provide services to the work programmes.
“The company has succeeded in finding, funding and executing what we believe is an exceptional deal for shareholders, despite a challenging sector environment,” said Fanning. “We expect the OML 18 transaction to underpin the future cash flow of the company with significant returns to shareholders, redeveloping a world-class producing asset in a country where the oil and gas industry benefits from transactions being in US dollars and there being no restrictions to repatriation of funds.”
Other resolutions approved at San Leon’s shareholder meetings included Fanning’s change in status, from executive chairman to CEO. A former Shell Nigeria chief, Mutiu Summonu, becomes non-executive chairman. ToscaFund, which held a 39.64% interest in San Leon, has raised its stake in the company to 54.41%.