NIGERIA: San Leon Energy Extends Timing of its follow-on investment in the Oza oil field
San Leon has announced the following extension to the timing of its follow-on investment in the Oza oil field in Nigeria.
On 27 January 2022, San Leon announced certain amendments to the terms of its investment in Oza which included an option to provide a further loan of US$2.0 million to Decklar by 30 April 2022 to increase its shareholding in Decklar Resources Limited (“Decklar”) from 11.5% to 15% (or otherwise accept the pro rata reduction in its shareholding to 11.5%). San Leon and Decklar have now agreed to extend the time period for providing this loan to 30 June 2022 on the basis that San Leon’s further loan will increase to US$2.5 million. This increased loan will continue to be made via 10% per annum unsecured subordinated loan notes of Decklar on the same repayment terms as originally announced on 1 September 2020. Furthermore, the extension gives San Leon additional time to assess the fundamentals of Oza, given that Decklar Resources Inc has today made an announcement that notes that the re-entry of the Oza-1 well in the Oza oil field in Nigeria has converted several hydrocarbon zones from contingent resources to reserves, prior to San Leon deciding whether to take up the option.
The extension also enables completion of San Leon’s proposed further investment in Oza to be more in line with the proposed timing for the entering into of binding conditional transaction documentation in relation to the proposed reorganisation to consolidate Midwestern Oil and Gas Company Limited’s shareholdings in:
i) the Company; and
ii) Midwestern Leon Petroleum Limited into a single shareholding in the Company, which also comprises, inter alia, a proposed consolidation of Midwestern’s indirect debt and equity interests in Energy Link Infrastructure (Malta) Limited (ELI) with those of the Company, as well as further new debt and new and existing equity investments to be made by San Leon in ELI, updated details of which were most recently announced on 29 April 2022.
All other terms of the Company’s investment in Oza remain unchanged.