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San Leon Energy shares resume trading after exiting reverse takeover talks

The oil and gas firm is back in the market, with trading restarting today

oil and gas operations
San Leon had a US$13.5mln cash balance on April 19

San Leon Energy Plc (LON:SLE) shares made a substantially higher mark as trading resumed on London’s AIM market, after the company exited negotiations over a possible reverse takeover.

The company had been in talks since September over a transaction to take full ownership of the Midwestern Leon Petroleum vehicle, which holds the OML 18 oil field assets in Nigeria.

“Discussions with Midwestern have continued since that date and, whilst there were some clear attractions of increasing San Leon's indirect ownership in OML 18, after careful consideration the board of San Leon has determined that a combination with MLPL is not in the best interests of San Leon's shareholders at this time as it does not provide a sufficient balance of added value for San Leon shareholders and certainty of near-term cash flow,” the company said in a statement.

It added: “The company continues to have a good relationship with Midwestern.

“The board believes that the discussions have themselves strengthened the working relationship between the two companies and looks forward to working with Midwestern, as its partner, and jointly advancing production at OML 18.”

San Leon also revealed that it has now received US$58.6mln in quarterly payments, and noted that during the time of the trading suspension its dispute with Avobone was settled, and material outstanding liabilities were repaid.

The company added that San Leon had a US$13.5mln cash balance on April 19.

“The company is now in a strong financial position, with the benefit of an expected regular future income stream from its ongoing quarterly loan note repayments (of approximately US$19mln).”

Additionally, San Leon said it is now able to progress with capital reduction, which has already been approved by shareholders but requires confirmation by the High Court in Ireland.

San Leon chief executive said: “Our financial position is much stronger than when discussions with Midwestern commenced. We are pleased to report that the first three quarterly payments have been received.

“Consequently, San Leon is now on a solid financial footing with a cash balance of $13.5mln and all material problems with creditors and litigation are behind us.

“I am therefore pleased to say that the company is progressing its capital reorganisation in order to allow shareholder distributions. I thank all shareholders, and in particular, our largest shareholder, Toscafund for their patience and support during this period.”

San Leon shares were changing hands at 35.10p on Monday, up 42% from the previous close of around 24.6p.

Quick facts: San Leon Energy PLC

Price: 22.2 GBX

AIM:SLE
Market: AIM
Market Cap: £99.88 m
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on 19/10/20

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