REG - San Leon Energy PLC - Further extension of Conditional Payment Waiver

San Leon EnergyAnnouncement

01/12/2021 07:05

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RNS Number : 1224U  San Leon Energy PLC  01 December 2021

 

 

 

1 December 2021

San Leon Energy plc

("San Leon" or the "Company")

 

Further extension of the Conditional Payment Waiver in relation to the MLPL
Loan Notes

San Leon, the independent oil and gas production, development and exploration
company focused on Nigeria, provides the following update regarding the
outstanding loan notes due from Midwestern Leon Petroleum Limited ("MLPL")
(the "Loan Notes").

 

Further to the announcement on 2 November 2021, San Leon has agreed with MLPL,
Midwestern and Martwestern to a further extension of the Conditional Payment
Waiver in relation to the payment of approximately US$32 million that was
originally due on 5 July 2021 to the end of December 2021 or, if sooner, the
termination of discussions or the signing of an agreement to effect the
Potential Transaction, as defined below (but otherwise on the same terms as
announced on 7 July 2021), which includes a further waiver on the same terms
of Midwestern's obligations to make payment on 30 September 2021 of an amount
equal to approximately US$30 million (collectively the "Extended Conditional
Payment Waiver"). The sums to which the Extended Conditional Payment Waiver
relates (and those falling due within 30 days after the expiry of the Extended
Conditional Payment Waiver) will be payable 90 days after such expiry, save
for, inter alia, if there is an event of default.

 

Background

 

As previously announced by San Leon, during the course of this year San Leon
was due to receive the final repayments of the Loan Notes which total over
US$98 million. The repayments are due in three instalments, commencing in
July 2021 and completing by December 2021.

 

MLPL is part of the structure through which San Leon holds its current 10.58%
indirect economic interest in OML 18.  San Leon currently has a 40% equity
interest in MLPL with the remaining interest in MLPL being owned by
Midwestern Oil and Gas Company Limited ("Midwestern"). Midwestern is also the
guarantor of the Loan Notes.  MLPL has a 100% equity investment in
Martwestern Energy Limited ("Martwestern"), which in turn has a 98% economic
interest in Eroton Exploration and Production Company Limited ("Eroton"),
which currently holds a 27% working interest in OML 18 and is its operator.

 

On 24 June 2021, San Leon announced that, inter alia, the Company was in
preliminary discussions with Midwestern in relation to a transaction to
reorganize Midwestern's holdings in the Company and MLPL into a single holding
in the Company, through the transfer to the Company of the 60% equity
interest in MLPL that it does not currently own (the "Potential
Transaction").  It was also announced that it is expected that, inter alia,
as part of the Potential Transaction, the amounts owed to San Leon by MLPL
pursuant to the Loan Notes will be taken into account in the overall structure
and eliminated from the resulting structure.

 

On 7 July 2021, San Leon agreed with MLPL, Midwestern and Martwestern to a
conditional payment waiver in respect of the repayment of approximately US$32
million of MLPL's Loan Notes and interest that fell due on 5 July (the
"Conditional Payment Waiver"). As part of the terms to the agreement, the
Conditional Payment Waiver was to expire at the end of August 2021 or, if
sooner, the termination of discussions or the signing of an agreement to
effect the Potential Transaction, and interest will accrue on this installment
of the Loan Notes over this period.  The sums to which the Conditional
Payment Waiver relates (and those falling due within 30 days after the expiry
of the Conditional Payment Waiver) will be payable 90 days after such expiry,
save for, inter alia, if there is an event of default. On 20 September 2021,
the Conditional Payment Waiver was extended to expire on 30 September 2021 and
an additional waiver on the same terms of Midwestern's obligations to make
payment on 30 September 2021 of an amount equal to approximately US$30
million was also included. This Conditional Payment Waiver was subsequently
extended on 1 October 2021 to expire on 31 October 2021 and most recently
further extended on 2 November 2021 to expire on the end of November 2021
under the same terms as announced on 7 July 2021.

 

Related party transaction disclosure

 

Midwestern and MLPL are related parties of the Company for the purposes of the
AIM Rules by virtue of Midwestern holding more than 10% of the existing
Ordinary Shares in the Company and the level of Midwestern's current interest
in MLPL. The Extended Conditional Payment Waiver is therefore a related party
transaction under the AIM Rules.  The Directors of San Leon (excluding
Adekolapo Ademola who is not considered to be independent as he is a
representative of Midwestern on the Company's board) consider, having
consulted with the Company's nominated adviser, Allenby Capital Limited, that
the terms of the Extended Conditional Payment Waiver are fair and reasonable
insofar as the Company's shareholders are concerned.

 

 

Enquiries:

 

 San Leon Energy plc                                   +353 1291 6292
 Oisin Fanning, Chief Executive
 Allenby Capital Limited                               +44 20 3328 5656

 (Nominated adviser and joint broker to the Company)
 Nick Naylor

 Alex Brearley

 Vivek Bhardwaj
 Panmure Gordon & Co                                   +44 20 7886 2500

 (Joint broker to the Company)
 Nick Lovering

 James Sinclair-Ford
 Brandon Hill Capital Limited                          +44 20 3463 5000

 (Joint broker to the Company)
 Oliver Stansfield

 Jonathan Evans
 Tavistock                                             +44 20 7920 3150

 (Financial Public Relations)
 Nick Elwes

 Simon Hudson
 Plunkett Public Relations                             +353 1 230 3781
 Sharon Plunkett

 

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