AIM quoted San Leon is helping Midwestern Oil &Gas finance the C$89.2mln takeover of Mart Resources.
As a result of the transaction San Leon will be due just less than 10% of a Nigerian oil field that currently produces more than 30,000 barrels per day.
The Toronto listed, Nigeria focused oil producer has today told investors that funds for the deal have now been received by the lawyer of the acquisition vehicle - 1038821 B.C. Ltd. (Acquireco) - and Mart said it expects the funds will be paid into the depositary.
Mart has agreed to extended the deadline for the receipt of funds into escrow until 5:00pm today in Calgary.
The ‘outside date’ for the deal’s completion remains March 24.
MidWestern (via Acquireco) agreed on 22 January to acquire all of the issued share capital of Mart by way of a plan of arrangement. Mart shareholders are set to receive 25 Canadian cents per share, valuing Mart at C$89.2mln.
Under the terms of the deal, San Leon will initially receive a 4.05% indirect economic interest in OML 18, which hosts operating oil fields.
Its interest in the project can increase to 9.72%, subject to securing further funds as part of a larger overall deal.
San Leon would also benefit from a minimum 65% ‘enhanced cash sweep’, which would see expeditious repayment of the debt financing.
The company also secures the right to provide oil field services, such as workover and drill rigs, to the operator of OML 18.