San Leon Energy Share Discussion Threads

[kaos3] 24/6/2021 07:18

like it a lot

[1kempton] 24/6/2021 07:11

Bloody great news

24 June 2021

San Leon Energy plc

("San Leon" or the "Company")

 

San Leon conditionally acquires further interest and option in New Nigerian Oil Export System

 

San Leon, the independent oil and gas production, development and exploration company focused on Nigeria, announces a conditional investment of US$2 million as well as an option to conditionally invest a further US$6.5 million in the equity of Energy Link Infrastructure (Malta) Limited ("ELI"), the company which owns the Alternative Crude Oil Evacuation System ("ACOES") project. The equity being conditionally purchased and the equity that may be purchased via the option are existing equity interests in ELI owned by Walstrand (Malta) Limited, ELI's largest shareholder.

 

As previously announced, the ACOES is being constructed to provide a dedicated oil export route from OML 18, comprising a new pipeline from OML 18 and a floating storage and offloading vessel ("FSO"). Once commissioned, which is expected to be during the second half of 2021, the system is expected by Eroton to reduce the downtime and allocated pipeline losses currently associated with the Nembe Creek Trunk Line ("NCTL"), to below 10%.

 

The conditional investment will comprise of the Company investing US$2 million for 1.323% of ELI, with San Leon simultaneously receiving an option (the "Option") to conditionally purchase a further 4.302% of ELI for US$6.5 million (together the "Further Investment"). The total consideration payable should the Option be exercised in full will therefore be US$8.5 million and will be payable by the Company in cash.  Any investment pursuant to the Further Investment will be conditional on obtaining the consent of Guaranty Trust Bank PLC ("GTBank") who currently hold a pledge over the shares held by Walstrand (Malta) Limited in ELI.  The exercise of the Option will be at the sole discretion of the Company, although such exercise will be subject to the consent of GTBank.

 

As previously announced, the Company currently holds a 10% equity interest in ELI. Following the completion of the Further Investment, San Leon will own a maximum of 15.625% of ELI, assuming that the Option is exercised in full. San Leon has also previously made shareholder loans to ELI totaling US$15.0 million which bear a coupon of 14% per annum. 

 

Under the terms of ELI's senior debt facility with GTBank, the lender has a charge over all of ELI's assets and, as further security, each shareholder in ELI (including San Leon in relation to its current shareholding in ELI) has pledged their shares in ELI to the lender.  The terms of the pledge are that the shares in ELI cannot be transferred or otherwise utilised without the lender's consent.  All shares in ELI that will be acquired pursuant to the Further Investment will be returned to this pledge. 

 

Information about ELI and the ACOES

 

ELI is incorporated in Malta but operates in Nigeria through its subsidiary, Energy Link Infrastructure Limited, owning both the new pipeline as well as the floating storage and offloading vessel, which together comprise the ACOES. 

 

ELI's audited accounts for the year ended 31 December 2018 state that the company made a loss of €13,668 and reported total assets of €8,699.  San Leon does not consider these figures to be representative of the scale of the opportunity that ELI has pending development of the ACOES, as those figures are prior to construction of the ACOES commencing.  ELI's unaudited total assets as at 31 March 2021 were approximately US$200.2 million. Two of San Leon's directors are currently appointed to ELI's board. 

 

The pipeline component of the ACOES is expected by ELI to have a throughput capability of around 100,000 barrels of oil per day, while the FSO has a storage capacity of 2 million barrels of oil.  Once commissioned, ELI's charges are expected to be comparable to current NCTL handling fees.

 

The Board continues to believe that the ACOES will have a significant effect on the operation of OML 18, primarily through the reduction of downtime and losses associated with the existing export route.  ELI, through its Nigerian subsidiary, will earn fees for transporting and storing crude oil from OML 18 and potential third parties. As a shareholder in ELI, San Leon stands to benefit from what the Board considers can be a very profitable operation in the medium to long term. 

 

 

Oisin Fanning, Chief Executive, commented:

"We are delighted to have conditionally agreed to increase our investment in ELI which owns the ACOES project, which we believe will be an important strategic asset that is expected to generate regular cash flow once it is commissioned, whilst also providing significant benefits to downtime and reductions in production losses for OML 18. Becoming a more influential shareholder in ELI is consistent with our overall strategy of developing the world class OML 18 asset and building value for our shareholders."

"We look forward to providing further updates in due course."

 

[1kempton] 17/6/2021 17:39

Fantastic prospect this, multi stacked stats, low api, superb field and will generate huge returns for sle .

[alaric7] 17/6/2021 16:35

yep pretty neat rns. all things being equal, oza 1 will be production testing and exporting oil through the existing new dedicated pipeline and facilities by mid July.

[1kempton] 17/6/2021 15:10

Brill news on oza from sle today exellent in fact.

[1kempton] 13/6/2021 10:40

And your a lost soul glavaliar.

[alaric7] 13/6/2021 09:01

another sleepless night,glavey? hardly surprising with the vertiginous rise in the share price over 12 months, the share buybacks and the 6p dividend, i guess you've missed out somewhat. and the prospect now of more of the same to come must be deeply unsettling for you.

[glavey] 13/6/2021 04:28

A couple of perturbed souls on here I see.

[1kempton] 12/6/2021 09:58

Yes alaric once the pipeline is hooked up as mentioned before other companies want to use this new alternative pipeline which means more cash for sle as every barrel running through has to be paid for in advance..

[alaric7] 11/6/2021 22:18

nice one , 1kempton. we now have in immediate prospect a dedicated secure new pipeline and FSO for OML18, which will be hugely value accretive for us, both in our share of the pipeline project itself and with the increased oil revenues for this world-class oil field.

[1kempton] 11/6/2021 19:31

Eli Akaso is at Bonny by looks from satellite tech,this is going to be fantastic for sle and us

[1kempton] 10/6/2021 14:48

Nigeria: With Declining Sector Investments, NNPC Predicts U.S.$200 Oil Price

10 JUNE 2021

This Day (Lagos)

[1kempton] 10/6/2021 09:36

Eli akaso has just gone past Lagos and on way by the looks to bonny.

[1kempton] 09/6/2021 22:15

Looks like eli akaso has moved..ie nearer nigeria..

[porsche888] 09/6/2021 15:46

The portfolio price is circa 84p

[hpcg] 09/6/2021 15:38

The compartmentalisation is a real issue. 3D high res res, with no source / receiver ghost and inversion can fine tune the imaging and sub-surface model but it can't help with the mechanics of extraction. As I say, I think Barryroe can be discounted from a sum of parts but that doesn't matter with OML 18 and a progressive PoO. Still a long way under-priced compared with fair value.

[cephalosaurus] 09/6/2021 14:32

The reason Barryroe was not developed was the technology to extract the waxy crude was not available, it was not to do with compartmentalisation. Vacuum insulated tubing came years later. Also came 3D seismic a couple of years back. Also, it's a viable project at only$26pb.

[hpcg] 09/6/2021 12:30

Plasybryn - part of the sum of parts valuation ST puts together includes 6p for Barryroe which IMO is worth nothing. There is a reason it was abandoned by both Exxon and Marathon (and their partners) though perhaps horizontal directional drilling through all the compartments might make a difference. Still technically very demanding. Probably needs +$100 Brent to make anything happen. All the real value outside the cash and equivalents is in OML 18 which is transformed with a secure path to the Bonny. That SLE gets double dibs with an interest in the crude and the pipeline is a bonus.

[bernieboy] 09/6/2021 09:28

Sorry all, I jinxed it! Lol.

[bernieboy] 09/6/2021 08:09

Sure is nice to see us steadily rising.

[bernieboy] 09/6/2021 08:08

Plastbryn, kempton1 posted the article on post 51405. 80p target from his previous article.

[plasybryn] 09/6/2021 07:51

Could anyone comment on this article please? Did it suggest a price target etc?

[porsche888] 09/6/2021 07:50

Plus remember The Tosca Fund and Martin Hughes are the biggest shareholders.

[porsche888] 09/6/2021 07:31

Plus the dividend

[porsche888] 09/6/2021 07:30

I think it's a combination of Oza coming on stream and the pipeline business which will net significant cashflows