San Leon Energy, the Africa-focused oil and gas explorer led by former stockbroker and telecoms entrepreneur Oisín Fanning, said it hopes to sign up a new finance provider “in the relatively short-term” after a US investments house that pledged $187 million (€171 million) last year failed to transfer initial funds.
“Over the last two months the company has received acceptable commercial terms from two prospective funders, and the company is now in the final stages of negotiation and hopes to sign full documentation with one of these funders in the relatively short-term,” San Leon said on Monday. “Should loan documentation be signed in the near future, the company expects funds to be received by the end of March 2024.”
New York-based Tri Ri Asset Management (TRAM) had pledged the “transformative” finance package last October by way of investing in convertible loans, shares and warrants to Dublin-based but UK-listed San Leon.
However, while San Leon said on November 2nd that TRAM had confirmed it was transferring $125 million of funds – covering the convertible loan element of the deal – the funds failed to arrive in the Irish company’s account.
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The refinancing is aimed at allowing San Leon to take a controlling stake in Energy Link Infrastructure (Malta), or ELI, a provider of crude oil transport and storage systems within the Niger Delta area of Nigeria, as well as certain other assets.
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San Leon owns a 10 per cent stake in a large Nigerian offshore oilfield, known as OML 18, which it acquired in 2016 in a complicated deal through a Mauritius vehicle called Midwestern Leon Petroleum Ltd (MLPL).
The company aims to use some of the proceeds from a refinancing deal to invest in new ELI pipeline to a floating storage and offloading terminal, which it says will bring about “a material increase in OML 18′s production” and boost crude oil commercialisation for other regional producers.
Meanwhile, San Leon’s trade creditors are owed $25 million and “have been exerting increasing pressure on the company”, it said.
The Department of the Environment, Climate and Communications is a big such creditor. Both sides recently reached a $7.7 million settlement to make good on San Leon’s guarantee over decommission liabilities relating to the Seven Heads gasfield off the Cork coast. San Leon sold the company behind the gasfield, where commercial production ceased in 2020, a decade ago, but continued to guarantee decommissioning liabilities. San Leon said it will pursue its former subsidiary, Island (Seven Heads) Ltd, for the money.
San Leon’s shares have been suspended since July as it has yet to publish its 2022 accounts.
“I am confident that the difficulties of this past year will soon be behind us as our forthcoming refinancing will enable us to fulfil our long-held strategy of becoming the majority shareholder in ELI,” said Mr Fanning, adding that the planned ELI floating terminal “will be a game changer, not only for OML 18, but for the entire industry in that region”.
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