San Leon Energy PLC (AIM:SLE, AQSE:SLE, OTC:SLGYF) said it expects to complete its planned refinancing in the near term and the recent legal challenge in Nigeria to be resolved shortly.
Talks on the refinancing, first announced in December, have made slower progress than anticipated with the partner and a second potential lender, but the company said it is now “in final discussions and expects to complete the refinancing in the near term”.
Cash inflows have been very limited and several creditors remain outstanding, but San Leon said it is continuing to take steps to manage its overheads and that its creditors are not currently putting it under undue pressure.
The board expressed confidence that all creditors will be settled following the conclusion of the refinancing.
A potential sale of non-core investments in Decklar Petroleum, as mentioned earlier this month, continues to be explored and the purchaser has said it has funding “substantially agreed” and once this is in place, completion is expected to take place within a matter of days.
Following recent updates on Nigeria, where last July new agreements with Midwestern Oil & Gas were set to consolidate and simplify San Leon’s interests in the OML 18 asset, it noted that associate Eroton is “in the Nigerian Law courts challenging the matter and expects the case to be resolved shortly”.
San Leon said it expects the new Eroton debt facility is unlikely to be completed whilst the legal action is ongoing “but the company understands that the documentation is in final form and, consequently, expects that completion could follow relatively shortly thereafter”.
The proposed reorganisation is now expected to be completed in the second quarter of this year pending conclusion of its refinancing and the Eroton issues.
The long stop dates of the various underlying agreements, currently set for 31 March 2023, will shortly be extended by mutual agreement.