San Leon announces a further update in relation to: i) the proposed transactions with Midwestern Oil & Gas Company Limited (Midwestern) and the Company’s further conditional investments in ELI; ii) its current refinancing discussions; and iii) an Energy Link Infrastructure (Malta) Limited (ELI) operational update.
Update on the Proposed Transactions
Further to the announcement made on 24 March 2023, all of the longstop dates in relation to the Proposed Transactions have now been extended to 30 June 2023, in agreement with Midwestern and the other relevant parties. The longstop dates are in relation to the New Eroton Debt Facilities, the Sahara OML 18 Acquisition Agreement, the MLPL Reorganisation Agreement and the ELI Reorganisation Agreement.
As announced on 24 March 2023, the Board continues to believe that the Proposed Transactions will be transformational for the Company and it continues to work towards completing them. However, the Board notes the recent challenge by NNPC Limited and to the operatorship of Oil Mining License (OML) 18 (OML 18) and the potential delays this will cause to the Proposed Transactions. The extension of the longstop dates, inter alia, reflects this.
Update on the refinancing discussions
Also as announced by the Company on 24 March 2023, San Leon remains in discussions on the proposed refinancing. Those discussions continue to progress and the Board expects to make progress in relation to the proposed refinancing in the near term. Further announcements will be made as and when appropriate.
Energy Link Infrastructure (ELI) – operational update
The Company is also pleased to announce that Century Energy Group Partners (CEG) has partnered with ELI for the spread-mooring completion, operations and maintenance of the Floating Storage and Offloading (“FSO”) vessel, the ELI Akaso.
The FSO ELI Akaso terminal is an integral component in OML 18’s Alternative Crude Oil Evacuation System’s (ACOES) infrastructure. The partnership between ELI and CEG is under a risk service contract in line with standard terms for oil and gas asset commercialisation and production enhancement.
CEG has deployed its personnel, infrastructure and expertise towards the engagement and has made significant progress in the completion of the FSO spread-mooring. CEG is scheduled to complete the important milestone of spread-mooring the FSO by 10 April 2023. Upon completion of the spread-mooring for the ELI Akaso, CEG will be responsible for the daily operations and maintenance of the FSO ELI Akaso terminal. The terminal will serve as a dedicated crude oil storage and export terminal for OML holders and marginal field producers in the Eastern Niger Delta, including OML 18. This partnership will enable ELI to not only facilitate improved realised production and revenue streams from OML 18 but also generate revenues from third party oil & gas companies operating in the Eastern Niger Delta.
ELI’s ACOES infrastructure comprises a new 47-kilometre secure undersea pipeline from OML 18 to the FSO ELI Akaso terminal. The ACOES pipeline component is expected to have a throughput capability of 100,000 barrels per day (b/d) of oil, while the FSO ELI Akaso has a storage capacity of 2 million barrels of oil. This ACOES infrastructure will enhance crude oil commercialisation, primarily through the reduction of downtime and crude losses associated with the existing export routes. The ACOES pipeline is expected to be completed in the second half of 2023.
Kolapo Ademola, CEO of ELI and a Non-Executive Director of San Leon, commented:
“ELI is delighted to collaborate with Century Energy Group. CEG’s proven expertise and experience in the sector provides ELI with a reliable partner towards the attainment of our corporate goals within the midstream oil and gas sector in Nigeria. Our collaboration with CEG should expedite our ability to deliver value to our key partners and stakeholders; Crude Oil producers in the Eastern Niger Delta, the Federal Government of Nigeria and the Nigerian economy at large.”