San Leon Provides Update on Proposed Transactions with Midwestern and ELI

Source: www.gulfoilandgas.com 9/1/2022, Location: Africa

San Leon, the independent oil and gas production, development and exploration company focused on Nigeria, announces the following update in relation to its forthcoming Proposed MLPL Reorganisation and the Further ELI Investments, as defined in the Company's AIM Admission Document published on 8 July 2022 (the "Admission Document").

On 8 July 2022 the Company announced that it had entered into a series of agreements with Midwestern Oil & Gas Company Limited ("Midwestern") to consolidate Midwestern's holdings in San Leon, Midwestern Leon Petroleum Limited ("MLPL") and Energy Link Infrastructure (Malta) Limited ("ELI") into a single holding in San Leon (together the "Proposed Midwestern Reorganisation"). In addition, San Leon announced further conditional investments in ELI (together the "Further ELI Investments"). Taken together the Proposed Midwestern Reorganisation and Further ELI Investments are collectively referred to as the "Proposed Transactions". The Admission Document set out details of the Proposed Transactions and the Proposed Transactions were approved by shareholders at an extraordinary general meeting of the Company held on 5 August 2022.

Extension of timeline for New Eroton Debt Facilities
Completion of the Proposed MLPL Reorganisation is subject to a number of conditions, details of which were set out in the Company's announcement of 8 July 2022 and in the Admission Document. Several of these conditions have been satisfied, notably the publication of the Admission Document and approval of relevant matters pertinent to the Proposed Transactions by shareholders at the Company's extraordinary general meeting held last month.

In order to acquire additional interests in OML 18 and take its economic interest to 45% of OML 18, Eroton proposes to enter into new senior secured reserve-based lending facilities totaling US$750 million (the "New Eroton Debt Facilities"), to be provided to Eroton by a lending consortium headed by Afreximbank. Whilst this process has advanced it remains a complex procedure with several interested parties and, as a result, additional time is needed to finalise the loan agreements and ancillary documentation. Consequently the condition relating to the New Eroton Debt Facilities, which had been due to be finalised by 31 August 2022, has now been extended to 30 September 2022 by agreement with Midwestern. Aside from the extension of timing, the structure of the New Eroton Debt Facilities remains in accordance with the description set out in the Admission Document.

The board of San Leon remains confident that the Proposed Transactions will complete by or during the final quarter of this year, as originally set out in the Admission Document.


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