San Leon Energy PLC (AIM:SLE, AQSE:SLE, FRA:SZX1, OTC:SLGYF) chief executive Oisin Fanning says the company is ‘well-positioned’ as the Nigeria focussed oil and gas investor released interim results.
The company is presently the subject of a possible transaction, which would see it consolidate interests among its partnerships – or alternatively, it is due material cash payments for the loan notes it holds.
"The company is well-positioned either to pursue the proposed transaction with Midwestern, or to continue with its existing assets and strategy and await receipt of the remaining substantial loan notes repayments," Fanning said.
“Whichever route is taken, the progress on the ACOES system is expected to be of substantial benefit."
San Leon held US$12.1mln of cash at the end of June – and a more recent measure showed US$10.2mln as of September 24. The company reported an US$8.1mln profit from continuing operations in the half which excludes repayments of loan notes (which amounted to US$800,000 in the half as certain due payments were waived whilst due diligence takes place for the proposed transaction).
In terms of the underlying OML 18 assets in Nigeria, the company noted that deliveries delivered to the Bonny terminal for sale amounted to around 6,600 barrels of oil day in the first half which was impacted by continued losses and downtime associated with the use of the Nembe Creek Trunk Line, OPEC restrictions, and reduced operations related to COVID-19 and capital discipline.
Gas sales averaged 17.8mln cubic feet per day in the half after downtime.
Production downtime was reported at 3.3% over the half, related to third party terminal and gathering system issues.
San Leon highlighted that downtime and other export issues are expected to be resolved by the new ACOES pipeline that will be used to transport crude oil from the OML 18 export pipeline.
The company also noted that oil barging operations got underway in late September, whilst the operator awaits the new pipeline’s availability. The full ACOES is expected to be operational in early 2022.