San Leon, the independent oil and gas production, development and exploration company focused on Nigeria, notes the announcement made on 25 August 2023 by Decklar Resources Inc. in Canada, regarding crude oil delivery operations at the Oza Oil Field in Nigeria.  San Leon has a 11% shareholding in Decklar Petroleum Limited (DPL), the local subsidiary of Decklar operating in Nigeria, and has also made a US$5.5 million loan to DPL, via 10% per annum unsecured subordinated loan notes. 

As stated in its announcement on 1 March 2023, San Leon continues to explore a potential sale of its non-core investments in DPL, although any completion remains subject to the proposed purchaser finalising its own funding arrangements. A further announcement will be made in relation to this at the appropriate time. 

Progress Re-Establishing Pipeline Access

The Trans-Niger Pipeline (TNP), which flows into the Shell Petroleum Development Company of Nigeria (“SPDC”) operated Bonny export terminal, was reopened in April 2023 and remains operational. Connector lines including the pipeline serving the Oza Oil Field, are expected to be operational in the near future. Based upon public announcements, the main line of the TNP has been operating since April 2023, and recorded minimal losses due to theft and bunkering through May 2023. Updates provided by SPDC have indicated that the main line has continued operations and it is anticipated that feeder pipelines will soon be operational. The TNP had been shut down for over one year due to vandalism and high line losses, and efforts and support from the Nigerian government are credited to a great degree for the resumption of operations. Decklar is currently re-certifying fiscal metering equipment and has applied for all necessary permits to allow for access and production into the TNP.

Trucking and Sale of Crude Oil to ERPC’s Edo Refinery

Trucking of crude oil from the Oza Oil Field to the ERPC facility in Edo State, Nigeria has reached a cumulative volume of over 55,000 bbls, with 10,000 bbls delivered in 2022 under the initial sale and purchase agreement and over 45,000 bbls delivered so far in 2023. Deliveries are continuing under the 200,000 bbls contract. The terms of the 200,000 bbls agreement include an invoicing and payment cycle that is triggered as each 5,000 bbls batch is delivered and offloaded at the Edo refinery.

Delivery of Crude Oil to DMCL’s Refinery

Delivery of crude oil has continued from the Oza Oil Field to DMCL and just under 13,000 bbls have been delivered to date. DMCL has agreed to purchase up to 100,000 bbls over the next 12 months.

The Company has experienced some delays obtaining permits to truck crude to the ERPC and DMCL refineries, but anticipates that with new systems recently implemented by the government regulatory agencies future permits will be obtained and issued in a more timely and efficient manner.”