San Leon to Raise $44.1 Million from Shareholders to Fund Development

San Leon announced Monday that the company has conditionally agreed to raise $44.1 million from existing and new shareholders, which will be used to fund the firm’s development.

The company has proposed to raise this money from existing and new shareholders by conditionally agreeing to place 36,250,000 New Ordinary Shares at a price of $1.2 per share. This placing is subject to the passing of necessary resolutions by San Leon’s shareholders at a general meeting, which will be called in due course, according to the company.

The proposed funds would enable San Leon to retain the Barryroe NPI (Net Profits Interest) rather than monetising it to fund operations. Barryroe, which is operated by Providence, is located in the North Celtic Sea basin and was discovered by Esso in 1973. San Leon expects cash flow in excess of $700 million dollars to arise out of the NPI, based on internal economic calculation.

San Leon’s new funds would also provide capital to develop the Rawicz and Siekierki fields in Poland. The company recently reported that the gross reserves for the Rawicz field stand at more than 50 billion cubic feet and San Leon is aiming to bring gas online at the site in early 2016. Operational work is expected to begin at the Siekierki field in the next few months, in order to try and turn the site into another cash flow stream.

The money would also enable wells to be drilled onshore Morocco, on the Tarfaya license, and in Albania, on the Durresi license. The former would target gas and aim for spudding in 3Q 2015 and the latter would target oil and aim for spudding in 4Q 2015.

San Leon Executive Chairman Oisin Fanning commented in a company statement:

"We are very grateful for the strong support of the existing and new investors in the placing. In particular, the proposed significant increase in Tosca’s interest speaks volumes about their belief in the company’s future and growth prospects. The funds will help transform San Leon into a cash-generating producer, and will bring other assets towards development. The three existing assets expected to generate cash in the coming years (Rawicz, Siekierki and Barryroe) will be the foundation for significant growth and the creation of shareholder value."

Tosca currently has a 22 percent shareholding in San Leon. After the placing, Tosca’s total shareholding would rise to approximately 41.5 percent.



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