San Leon, the independent oil and gas production, development and exploration company focused on Nigeria, is pleased to announce its audited final results for the year ended 31 December 2021.  The full annual report for the year to 31 December 2021 is available on the Company’s website ( and will be posted to shareholders in the coming days.

Corporate and financial highlights


•    Negotiated and announced on 24 June 2021 the proposed Midwestern Reorganisation, which is described in full in the Company’s Admission Document, which is being published later today.

•    On 24 June 2021 announced the conditional purchase from Walstrand (Malta) Ltd of 1.323% of ELI shares for US$2 million, together with an option to purchase a further 4.302% in ELI for an additional US$6.5 million.

•    On 7 July 2021 announced conditional payment waivers (subsequently extended) regarding the approximately US$99.3 million (par value) of payments due from Midwestern Leon Petroleum Limited (“MLPL”) to San Leon during the second half of 2021, since the repayable amounts form part of the proposed Midwestern Reorganisation. Payment waivers remain in place at the date of this announcement pending completion of the transactions.

•    In January 2022, the Company announced that some of its subsidiaries had successfully concluded their ongoing legal proceedings with TAQA Offshore BV (“TAQA”) in relation to San Leon’s legacy interests in two royalties on Block Q13A, which is located offshore the Netherlands (the “Amstel Oil Field”). Payments totaling more than €5.9 million for royalties receivable up to November 2021 including a payment in respect of its legal costs, have been received in 2022. From December 2021, the royalties will continue to be payable in accordance with the terms and conditions of the Royalty Agreements, and payments and are not expected to be material.

•    On 15 February 2022, the Company announced a further loan of US$2 million to ELI, also enabling the Company to conditionally purchase a further 2% shareholding of ELI for a nominal sum.

•    In February 2022, the Company completed its US$5.5 million investment in Decklar Petroleum Limited (“Decklar”), related to the Oza field onshore Nigeria, repayable to the Company as a loan through a cash sweep. The Company also holds 11% equity stake in Decklar.

•    Board appointment process previously announced completed with appointment of John Brown as Independent Non-Executive Director and Chair of the Audit and Risk Committee. Alan Campbell resigned from the Board in 2021 as part of a board restructure. Lisa Mitchell left the Company as CFO and Executive Director in October 2021 and Julian Tedder was appointed as CFO and Executive Director in December 2021.


•    Included within the basis of preparation note of the financial statements and Independent Auditor’s report are details regarding material uncertainty related to going concern. This is uncertainty is mitigated by the transactions announced today. Cash and cash equivalents as at 31 December 2021 were US$7.6 million (includes US$6.8 million restricted and held in escrow for the Oza transaction) (31 December 2020: US$18.5 million including US$6.8 million restricted and held in escrow for the Oza transaction).

•    In 2021, US$2.2 million (31 December 2020: US$46.5 million) in principal and interest payments has been received under the MLPL Loan Notes.

•    Outstanding amounts due under the MLPL Loan Notes are now approximately US$105.6 million (par value), which are subject to current repayment waivers pending the completion of the proposed Midwestern Reorganisation, and would be extinguished as part of the consideration if the transaction were to complete.


An update on OML 18 activity during 2021 is provided below:

•  Oil delivered to the Bonny terminal for sales was approximately 4,400 barrels of oil per day (“bopd”) in 2021 (21,100 bopd in 2020) and has been affected by combined losses and downtime of approximately 79%. The 2021 figure has also been affected by OPEC oil production quota restrictions, and some Covid-related delays. Field operations to boost production were largely put on hold, pending the start-up of the ACOES barging system. Together, the losses, downtime, OPEC restrictions and Covid-related delays have caused the majority of the difference between gross production when there is minimal disruption to production, and oil is received at Bonny terminal for sales.

•  Gas sales averaged 29.6 million standard cubic feet per day (“mmscf/d”) in 2021 after downtime (32.7 mmscf/d in 2020).

•  Production downtime of 9% in 2021 was caused by third party terminal and gathering system issues. This relates to days when oil production was entirely shut down at OML 18. Historical issues in the third-party export system are expected to be substantially resolved by the implementation of the new ACOES for the purpose of transporting, storing and evacuating crude oil from OML 18 export Pipeline. The pipeline will run from within the OML 18 acreage to a dedicated FSO vessel in the open sea, approximately 50 kilometres offshore. Barging of oil from OML 18 to the FSO is expected to commence in July 2022, with trials already having been completed. Expected timing for the completion of the pipeline component of ACOES is late 2022.

•  Pipeline losses by the Bonny Terminal operator have increased markedly over the past year (31 December 2021: 70%; 31 December 2020: 28%), largely due to lower pipeline throughput as a result of OPEC quota restrictions and Covid-related issues. In the medium term, the ACOES is expected to reduce losses significantly.

•  Eroton has taken all appropriate precautions for its operations and people, with regards to Covid-19.

·    An update on ELI is as follows:

o  Whilst there have been some delays to ACOES principally due to Covid, barging operations from OML 18 to the ELI Akaso FSO are now expected by ELI to commence during July 2022.

o  ELI is in advanced negotiations with other third-party injectors for use of its pipeline and terminalling facilities.

o  Construction of the pipeline continues to progress and hook up with ELI Akaso is expected to take place in late 2022.

Outlook for 2022

•    Fuller barging operations from OML 18 to the FSO to commence in July2022.

•    Completion of the proposed transactions with Midwestern and ELI expected later in 2022.

•    The commissioning of the ACOES pipeline.

•    Restarting of field operations on OML 18.

•    Export of oil from Oza.

•    Continuing to position the Company for further transactions.

On 8 July 2022, the Company entered into the new facility for the purposes of funding its working capital requirements and for financing the Further ELI Investments, details of which can be found in the Admission Document. The new facility is for US$50 million.

“The last year has been the most significant year in the Company’s development.  We embarked upon and announced today a transaction which we believe will create a significant West African oil and gas entity which is ideally placed to take advantage of the opportunities available to it and to deliver considerable future value to all our shareholders.” Oisin Fanning, CEO of San Leon, Commented. 

“Whilst the Covid-19 pandemic continued to provide industry challenges during 2021, the recovery in oil price during the year and since, has enabled the Company to approach its portfolio with increased confidence. As a result, San Leon has proposed a major scaling up of its interests in OML 18 and ELI.

The Company was proud to announce in June 2021 the proposed transaction to increase its position in OML 18 and ELI significantly, and today we will publish an Admission Document in this respect. I view the proposal as a milestone in San Leon’s growth aspirations, and an integral part of our strategy,” Mutiu Sunmonu Chairman, said.

The Proposed Transaction

San Leon is committed to the long-term development of its Nigerian assets, with a focus of delivering value to Shareholders. This is driven by its technical expertise and operational capabilities, secured by the close links it forges with governments, joint venture partners and the local communities in which it operates.

The MLPL Reorganisation and the ELI Reorganisation together with the Further ELI Investments would result in San Leon’s initial indirect interest in OML 18 increasing from 10.58% to 44.1%, while the MLPL Loan Notes would fall away. In additional transactions, the Company’s interest in ELI would increase to approximately 50%, as well as having approximately US$50 million of loan notes receivable from ELI. The transaction is also expected to have the following benefits:

•    increasing the Company’s economic interest in ELI will complement the Company’s proposed 100% interest in MLPL, as the ACOES project is being constructed to provide a dedicated oil export route from OML 18 and therefore for the benefit of MLPL, including the expected reduction of pipeline losses and increasing the uptime of export;

•    San Leon’s larger presence by virtue of its activities, resources and commitments, will pave the way for the Company to become a significant market participant in Nigeria, thereby better positioning the Company to deliver value for shareholders; and

•    increasing the Company’s technical and management involvement in the OML 18 asset, serving to help optimise the development of the asset. This will be formalised through an Asset Management Agreement.

Each of these benefits will contribute to the Company’s main objectives which are to:

•    use the Company’s interest in OML 18 as a platform to become a leading independent production and exploration company focused on Nigeria and West Africa – by securing and developing further high potential asset opportunities that yield value for shareholders;

•    use the Company’s technical and operational expertise in securing production and near-term operating cash flow which will yield value to shareholders whilst continuing to forge close links with governments, partners and the local communities that it operates in; and

•    continue to position the Company for further transactions.

The Company’s financial position also enabled it to increase its stake in ELI during 2021 and early 2022 to 13.323% with a loan note receivable of US$17 million (par value), and during 2021 and early 2022 to complete an investment of US$5.5 million in Decklar (related to the Oza field). The Company has an option to invest a further US$2.5 million in Decklar by the end of June 2022. Decklar performed a workover and well testing on the Oza-1 well during 2021, and results are discussed in more detail in the CEO’s report.

Last year I anticipated that the new oil export system, ACOES, was expected to be operational during H2 2021. While the timing on this has slipped, I am pleased to report that barging operations to the FSO are expected by ELI to commence during the second half of 2022, and that ELI expects to have the pipeline completed to the FSO at the end of 2022.

As discussed in my statement last year, the issues with NCTL export system, Covid-19 delays, infield operational deferrals, and increased production downtime have continued to affect production during 2021 and have some natural delay in achieving future production increases from new well drilling. Alongside the revival in oil prices, and with ACOES becoming operational, I expect Eroton to start to examine restarting well operations with an aim to boosting production on what we consider to be a world-class asset.

West Africa, focusing on Nigeria, is where San Leon’s activities and resources will continue to be concentrated, and we expect this focus to continue to deliver value for shareholders.

Our increased investment in ELI, and the further proposed increases, are expected to yield attractive returns to the Company from its loan plus equity components.

The Company still retains two non-Nigerian, non-core interests. These are the Durresi block offshore Albania, for which the Company is seeking to enter the Appraisal phase of the licence and a farm out is being sought, and the Company’s Net Profit Interest (“NPI”) in the Barryroe field, offshore Ireland, where the operator, Providence Resources plc, continues to work on a funding solution to progress development of the field.

The Company has nearly completed its exit from Poland, with the small amount of remaining activity being administrative. The Company continues to hold certain NPIs in relation to Polish licences.

Staff welfare is of utmost importance to us and as such at San Leon Energy plc we have also been working remotely whenever possible since March 2020 as previously mandated by the different governments in the countries in which we have a presence. All employees and consultants have continued to be actively engaged regardless of the home working conditions. The Company has now started to reduce the proportion of home working, in line with general industry practice.

As at 8 July 2022 San Leon had cash on hand of US$0.2 million. The Midwestern transactions will be transformational for the Company and are expected to be cash flow positive in the near term.

As part of the proposed transactions, the Loan Notes would no longer be in place, and the Company will instead utilise its significantly increased portfolio of other expected cash flow sources.

During 2021, the Company made two Board appointments.

During May, John Brown joined the Board on as an independent Non-Executive Director. Mr Brown has more than 20 years of international experience in oil and gas and related industries, including over nine years of experience with operations in West Africa. He is a Chartered Accountant (ICAS) and was Chief Financial Officer or Group Finance Director for numerous UK listed companies within the oil and gas sector including Gulf Marine Services plc, Bowleven plc and Pittencrieff Resources plc. Mr Brown chairs the audit and risk committee and is a member of the nomination and remuneration committees.

During December 2021 Julian Tedder was appointed as Chief Financial Officer and Executive Director of the Company. Julian is a Chartered Accountant and previously served as Chief Financial Officer of IGas Energy plc and General Manager, Finance of Tullow Oil plc, ad brings with him a wealth of finance and industry experience.

I am delighted to welcome both to the Company. I would also like to thank Lisa Mitchell, who left the Company as previous CFO, in November 2021, for all of her contributions. I am also grateful to Alan Campbell for all of his invaluable work as a Director of the Company since 2016, and who stepped down from the Board in May 2021. Alan has continued as Company Secretary and has remained a key part of the Company’s commercial successes and business development.

In 2021, San Leon’s Board continued to seek ways to improve its Environment, Social and Governance (“ESG”) impact. Covid-19 increased the challenges in meeting objectives but the Company was still very proud to deliver on several initiatives during the course of 2021 in Nigeria including the provision of educational support for disadvantaged children, the building of two new schools in Kogi State, and the provision of water infrastructure to villages in Benue and Kogi States. This was in addition to our ongoing support of women-led small enterprises and the supply of much needed basic supplies such as food, clothing and medical care to some highly disadvantaged people.

As part of our ESG strategy, we will continue ongoing engagement with all stakeholders and governments to ensure that we operate our business in a way that is sustainable and benefits the local communities in which we have a presence.

With the improved oil price, the proposed substantial increase in its indirect equity stake in OML 18, the proposed further investments in ELI, and its position in Oza, we believe that San Leon is well placed to continue to realise value for shareholders from Nigeria. Our technical and management expertise in the industry, will be put to work more than ever in these assets. As a result of the near-term expected startup of barging as part of ACOES, and anticipated pipeline completion to ACOES at the end of this year, we anticipate short-term improvements in OML 18 sales.

Our strategy continues to include the delivery of sustainable long-term returns to shareholders. We aim to achieve this through a combination of returns to shareholders and also growth in our asset base.

I look forward with confidence to updating shareholders on the achievement of these aims.”

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