£59.6m Conditional Share Plac

RNS Number : 4863X

San Leon Energy PLC

07 December 2010

 



THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY OTHER STATE OR JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO.

San Leon Energy plc

("San Leon Energy" or the "Company")

£59.6 million Conditional Share Placing

and 

Notice of Extraordinary General Meeting

7 December 2010

San Leon Energy, the AIM-traded oil and gas exploration and development company focusing on projects in Poland, Morocco, Albania and the Atlantic Margin, is pleased to announce that it has agreed the terms of a conditional placing of 331,313,333 new Ordinary Shares in the issued share capital of the Company (the "Placing Shares") at 18 pence per Placing Share (the "Placing Price"), to placees on and subject to the terms and conditions of this announcement (including the Appendix), raising gross proceeds of approximately £59.6 million (the "Placing").

The Placing Shares represent approximately 75.9 per cent. of the issued share capital of the Company as at the date of this announcement and approximately 43.1 per cent. of the issued share capital of the Company as it is expected to be immediately following completion of the Placing.

The Placing Shares will be issued credited as fully paid and will rank pari passu with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid on or in respect of such shares after the date of issue of the Placing Shares.

Macquarie Capital (Europe) Limited ("Macquarie Capital") is acting as sole bookrunner and co-lead manager. Fox-Davies Capital Limited ("FoxDavies") is acting as co-lead manager.

FURTHER DETAILS OF THE PLACING

Under the terms of a placing agreement (the "Placing Agreement"), signed on 7 December 2010 between the Company, Macquarie Capital, FoxDavies and each of the directors of the Company, the Company will: (i) pay to Macquarie Capital and FoxDavies commissions conditional upon admission of the Placing Shares to trading on AIM becoming effective ("Admission"); and (ii) give customary warranties, undertakings and indemnities to each of Macquarie Capital and FoxDavies, in each case in respect of the services provided by Macquarie Capital and FoxDavies in connection with the Placing.  The Placing Agreement may be terminated at any time prior to Admission in certain circumstances, including amongst other matters, circumstances where any warranties are found to be untrue, inaccurate or misleading.  Further details of the Placing Agreement can be found in the Appendix (which forms part of this announcement).

The Placing will be conditional upon, amongst other things: (i) the passing by the shareholders of the Company, without amendment, of certain resolutions at an extraordinary general meeting ("EGM") to be convened by the Company at 11.00 a.m. on 30 December 2010; (ii) the Placing Agreement having become unconditional (save for Admission) and not having been terminated in accordance with its terms prior to Admission; and (iii) Admission becoming effective.  A circular, containing a notice of EGM, will be despatched today to shareholders of the Company outlining the terms of the Placing and seeking the necessary shareholder approvals.

Application will be made for Admission and, subject to the necessary shareholder approvals being obtained at the EGM, it is expected that Admission will become effective at 8.00 a.m. on 31 December 2010.  

Your attention is drawn to the detailed terms and conditions of the Placing described in the Appendix.  Persons by whom or on whose behalf a commitment to acquire Placing Shares has been given will be deemed to have read and understood this announcement, including the Appendix, in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings contained in the Appendix.

Background to the Placing

Further to the Company's regular market and operational updates, the Company has, with the support of its Director of Exploration (John Buggenhagen) and his team of geoscientists, acquired over the past two years what the Board believes to be attractive acreage positions in a number of different plays.  As a result, the Company is now turning its focus to driving value by commercialising and developing its current portfolio.

In accordance with the Company reaching the next stage in its strategy, the Board has identified a fourteen to seventeen well programme targeting both unconventional and conventional leads and prospects in Poland and Morocco.  Three of these wells, which are targeting the Baltic Basin shale horizons in Poland, are already funded by Talisman Energy as part of the Company's previously announced farm-out transaction.  Under this farm-out, Talisman Energy has the option to increase its interest in the Gdansk W, Braniewo S and Szczawno licences by drilling a further three wells in the Baltic Basin.

The Placing will fund the work programme targeting high impact shale gas and conventional plays in Poland and Morocco as well as a programme of low cost, early production Polish oil prospects that have the potential to provide cash flow for future exploration and appraisal programmes.  The Placing will also provide capital to de-risk early stage assets through seismic to prepare them for drilling and/or partial or full divestment.  Further details of how the Company intends to use the net proceeds of the Placing are set out below.

Use of Proceeds

The net proceeds of the Placing will be used to fund an extensive seismic and drilling programme over the next eighteen months as well as the repayment of the Company's convertible debt and general corporate overheads.

In particular, the net proceeds of the Placing will be applied to the following projects which are planned to take place in 2011 and the first half of 2012:

Poland

(i)         Funding of the Company's share of the seismic programme with Talisman Energy over the Baltic Basin acreage in preparation for a three to six shale gas well programme.

(ii)        Drilling six lower-risk exploration wells in the Permian basin and Nida Trough targeting short-term oil production (under the Nida, Szczecinek and Nowa Sol licences).

(iii)       Drilling three exploration wells to prove shale gas presence and prospectivity in the carboniferous horizon (under the Wschowa and Gora licences).

Morocco

(i)      Drilling two exploration wells in on-shore Morocco targeting conventional oil and gas plays (under the Zag and Tarfaya licences).

(ii)      Testing and proving concept of the in-situ oil shale project in Morocco (under the Tarfaya oil shale agreement).

Early stage, low spend assets/other

(i)         Acquiring, processing and interpreting 3-D seismic over off-shore Albania in preparation for a potential farm-out process (under the Durresi production sharing contract).

(ii)      Repaying the Company's convertible debt of £2.5 million.

Further details of all of the projects, programmes, agreements and licences described in this announcement can be found on the Company's website (www.sanleonenergy.com) and in its regular market and operational updates.  Information contained on or accessible from the Company's website is not, and does not form, a part of this announcement.

Oisín Fanning, Executive Chairman of San Leon Energy, commented:

"We are delighted with the high demand for this placing which shows strong support from both existing shareholders and new institutional investors in Europe and North America.

Over the last two years the Company has built a highly attractive portfolio of assets across a number of exciting hydrocarbon regions. Our focus now turns to commercialising and developing these assets.

The funds raised will support this stage of our growth strategy as we fast-track the drilling of up to 17 wells in the next 18 months in Poland and Morocco.  This will be the busiest and most significant growth stage for the Company to date; one that will provide meaningful and high impact news flow over the next 18 months."

ENQUIRIES

San Leon Energy plc	Oisin Fanning, Executive Chairman	[phone]
	John Buggenhagen, Director of Exploration
Macquarie Capital (Europe) Limited	Sole Bookrunner and Co-Lead Manager	[phone]
	John Dwyer
	Paul Connolly
	Ben Colegrave
Fox-Davies Capital Limited	Co-Lead Manager	[phone]
	Phil Davies
	David Porter
Arbuthnot Securities Limited	Nominated Adviser	[phone]
	Nick Tulloch
	Ben Wells
College Hill	Investment Relations Adviser	[phone]
	Nick Elwes

DISCLAIMER

Arbuthnot Securities Limited ("Arbuthnot"), which is authorised and regulated in the United Kingdom by the FSA, is the Company's nominated adviser.  Arbuthnot's responsibilities as the Company's nominated adviser under the AIM Rules are owed solely to the London Stock Exchange and are not owed to the Company or to any Director or to any other person.  Arbuthnot is acting exclusively for the Company and no one else in connection with the Placing and Admission and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Placing or Admission and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Arbuthnot or for providing advice in relation to the Placing, Admission or any matters referred to in this announcement.

Macquarie Capital (Europe) Limited, which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for the Company and no one else in connection with the Placing and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Macquarie Capital or for providing advice in relation to the Placing or any matters referred to in this announcement.

Fox-Davies Capital Limited, which is authorised and regulated in the United Kingdom by the FSA, is acting exclusively for the Company and no one else in connection with the Placing and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to clients of FoxDavies or for providing advice in relation to the Placing or any matters referred to in this announcement.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by, Arbuthnot, Macquarie Capital or FoxDavies or by any of their respective affiliates or agents as to, or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

This announcement has been issued by the Company and is the sole responsibility of the Company.

The Placing Shares have not been and will not be registered under the US Securities Act of 1933 (the "Securities Act") or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold, transferred or delivered, directly or indirectly, within the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with the securities laws of any state or other jurisdiction the United States.  There will be no public offer of the Placing Shares in the United States.  The Placing Shares are being offered and sold: (i) outside the United States in offshore transactions as such terms are defined in, and in reliance on, Regulation S under the US Securities Act; and (ii) inside the United States only to "qualified institutional buyers" as defined in Rule 144A under the Securities Act who have delivered a duly executed investor letter, pursuant to an exemption from registration under the Securities Act.  In addition, until forty days after the commencement of the Placing, an offer, sale or transfer of Placing Shares within the United States by any dealer (whether or not participating in the offering) may violate the registration requirements of the Securities Act.

The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission (the "SEC"), any state securities commission in the United States or any US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the Placing Shares or the accuracy or adequacy of this announcement. Any representation to the contrary is a criminal offence in the United States.

This announcement is for information purposes only and does not constitute a prospectus relating to the Company and has not been approved by the UK Listing Authority, nor does it constitute or form any part of any offer or invitation to purchase, sell or subscribe for, or any solicitation of any such offer to purchase, sell or subscribe for, any securities in the Company under any circumstances, and in any jurisdiction, in which such offer or solicitation is unlawful. Accordingly, copies of this announcement are not being and must not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent, in whole or in part, in or into the United States and persons receiving this announcement (including brokers, custodians, trustees and other nominees) must not, directly or indirectly, mail, transmit or otherwise forward, distribute or send this announcement in or into the United States.

The Placing Shares have not been and will not be registered or qualified for distribution to the public under the securities legislation of any province or territory of Australia, Canada, Japan or South Africa or in any country, territory or jurisdiction where to do so may contravene local securities laws or regulations. Accordingly, the Placing Shares may not, subject to certain exemptions, be offered or sold directly or indirectly in or into, or to any national, citizen or resident of Australia, Canada, Japan or South Africa. The distribution of this announcement in or into other jurisdictions may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdictions.

This announcement contains (or may contain) certain forward-looking statements with respect to the Company and certain of its current plans, goals and expectations relating to its future financial condition and performance and which involve a number of risks and uncertainties.  The Company cautions readers that no forward-looking statements are a guarantee of future performance and that actual results could differ materially from those contained in such forward-looking statements.

Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe" or other words of similar meaning.  Examples of forward-looking statements include statements regarding or which make assumptions in respect of the working capital which will be needed by the Group to fund its operations over the next twelve months.

By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, economic and business conditions, the effects of continued volatility in credit markets, market-related risks such as changes in the price of oil or changes in interest rates and foreign exchange rates, the policies and actions of governmental and regulatory authorities, changes in legislation, the further development of standards and interpretations under International Financial Reporting Standards ("IFRS") applicable to past, current and future periods, evolving practices as regards the interpretation and application of standards under IFRS, the outcome of pending and future litigation or regulatory investigations, the success of future exploration, acquisitions and other strategic transactions and the impact of competition.  A number of these factors are beyond the Company's control.  As a result, the Company's actual future results may differ materially from the plans, goals and expectations set forth in the Company's forward-looking statements.

Any forward-looking statements made in this announcement by or on behalf of the Company speak only as at the date they are made.  Except as required by the FSA, the London Stock Exchange or applicable law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances upon which any such statement is based.

The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS DIRECTED ONLY AT: (A) PERSONS WHO ARE QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED, BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC AND INCLUDES ANY RELEVANT IMPLEMENTING MEASURE IN ANY MEMBER STATE)  (THE "PROSPECTUS DIRECTIVE"); AND (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.") OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR THE SALE OR SUBSCRIPTION OF ANY SECURITITES IN THE COMPANY.

Persons by whom or on whose behalf a commitment to acquire Placing Shares has been given will be deemed to have read and understood this announcement, including the Appendix, in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings contained in the Appendix.

APPENDIX

TERMS AND CONDITIONS OF THE PLACING

For Invited Placees Only

Important Information

1.          Eligible participants

This Appendix, including the terms and conditions of the Placing set out herein, is directed only at persons who are FSMA Qualified Investors.

In this Appendix:

(a)       "you" or "Placee" means any person who is, or becomes, committed to subscribe for Placing Shares under the Placing pursuant to a legally binding commitment given to Macquarie Capital or FoxDavies, as the case may be, acting as agents for the Company; and

(b)      terms defined elsewhere in this announcement (in particular in the Definitions at the end of this announcement) have the same meanings, unless the context requires otherwise.

Members of the public are not eligible to take part in the Placing.

2.          Overseas jurisdictions

The distribution of this announcement and the Placing and/or the issue of Placing Shares pursuant to the Placing in certain jurisdictions may be restricted by law.  FSMA Qualified Investors who seek to participate in the Placing must inform themselves about and observe any such restrictions.  In particular, this announcement and the information contained herein is not for publication or distribution, directly or indirectly, to persons in the United States, Canada, Australia, Japan or South Africa or in any jurisdiction in which such publication or distribution is or may  be unlawful.  Furthermore, this announcement does not constitute an offer or invitation (or a solicitation of any offer or invitation) to subscribe for or acquire, sell or purchase or otherwise deal in Placing Shares in the United States, Canada, Australia, Japan or South Africa or in any other jurisdiction in which any such offer, invitation or solicitation is or would be unlawful.  No public offer of securities of the Company is being made in the United Kingdom, United States or elsewhere.

The Placing Shares have not been and will not be registered under the US Securities Act of 1933 (as amended) (the "Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States, and accordingly may not be offered, sold or transferred within the United States except pursuant to an exemption from, or in a transaction not subject to, registration under the Securities Act.  The Placing is being made outside the United States only in "offshore transactions" (as defined in Regulation S under the Securities Act) meeting the requirements of Regulation S under the Securities Act and may be made to persons within the United States who are "qualified institutional buyers" within the meaning of Rule 144A under the Securities Act, pursuant to a transaction that is exempt from, or not subject to, the registration requirements of the Securities Act.  Persons receiving this announcement (including custodians, nominees and trustees) must not forward, distribute, mail or otherwise transmit it in or into the United States or use the United States mail, directly or indirectly, in connection with the Placing.

3.          Placing

3.1         Macquarie Capital and FoxDavies are arranging the Placing as agent for and on behalf of the Company.  Macquarie Capital, in consultation with the Company, will, determine the extent of each Placee's participation in the Placing, which will not necessarily be the same for each Placee.  The placing obligations of Macquarie Capital and FoxDavies in connection with the Placing are set out in the Placing Agreement (further details of which are described in paragraph 7 of this Appendix).  No commissions will be paid to or by Placees in respect of their agreement to subscribe for any Placing Shares.

3.2         Each Placee will be required to pay to Macquarie Capital, on the Company's behalf, the Placing Price as the subscription sum for each Placing Share agreed to be subscribed by it under the Placing in accordance with the terms and conditions set out in or referred to in this Appendix.  Each Placee's obligation to subscribe and pay for Placing Shares under the Placing will be owed to each of the Company, Macquarie Capital and FoxDavies.  Each Placee will be deemed to have read and understood this announcement in its entirety.  To the fullest extent permitted by law and applicable FSA rules, neither Macquarie Capital nor any other Macquarie Person, nor FoxDavies nor any other FoxDavies Person, will have any liability to Placees or to any person other than the Company in respect of the Placing.  To the fullest extent permitted by law and applicable FSA rules, the Company will have no liability to Placees or to any person in respect of the Placing.

3.3         Various dates referred to in this announcement are stated on the basis of the expected timetable for the Placing.  It is possible that some of these dates may be changed.  The expected date for Admission is currently 31 December 2010 and, in any event, the latest date for Admission is 30 January 2011 (the "Long-Stop Date").

4.          Participation and settlement

4.1         Participation in the Placing is only available to persons who are invited to participate in it by Macquarie Capital or FoxDavies.

4.2         A Placee's commitment to subscribe for a fixed number of Placing Shares at the Placing Price under the Placing will be agreed orally (or, if agreed previously, may be confirmed orally) with Macquarie Capital or FoxDavies.  Such agreement will constitute a legally binding and irrevocable commitment on your part to subscribe for that number of Placing Shares at the Placing Price on the terms and conditions set out or referred to in this Appendix and subject to the Company's constitution, such legally binding and irrevocable commitment is subject only to the Placing conditions set out in paragraph 8 of this Appendix.  Following such legally binding and irrevocable commitment, a contract note (a "Contract Note") will be despatched to you by Macquarie Capital or FoxDavies, as the case may be, confirming: (i) the number of Placing Shares for which you have agreed to subscribe; (ii) the aggregate amount you will be required to pay for those Placing Shares; (iii) all relevant settlement information; and (iv) settlement instructions.  It is expected that Contract Notes will be despatched on 7 December 2010, that the "trade date" for settlement purposes will be 7 December 2010 and that the "settlement date" will be 6 January 2011.

4.3         At such point, each Placee will have an immediate, separate, irrevocable and legally binding obligation, owed to the Company and to Macquarie Capital or FoxDavies, as the case may be, to pay to Macquarie Capital or FoxDavies, as the case may be (or as either may direct), in cleared funds an amount equal to the product of the Placing Price and such number of Placing Shares that such Placee has agreed to acquire.

4.4         A settlement instruction form will accompany each Contract Note and, upon receipt, should be completed and returned in accordance with the instructions on it by the time and date stated therein.

4.5         Settlement of transactions in the Placing Shares will take place within the CREST system, subject to certain exceptions, on a "delivery versus payment" (or "DVP") basis.  Macquarie Capital and FoxDavies reserve the right to require settlement for and/or delivery to any Placee of any Placing Shares by such other means as it may deem appropriate if delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this announcement or would not be consistent with the regulatory requirements in any Placee's jurisdiction.

4.6         If your Placing Shares are to be delivered to a custodian or settlement agent, you should ensure that the Contract Note is copied and delivered immediately to the appropriate person within that organisation.

5.          No Prospectus

No prospectus has been or will be submitted for approval by the FSA in relation to the Placing or the Placing Shares.  Placees' commitments in respect of Placing Shares will be made solely on the basis of the information contained in this announcement and on the terms contained in it and subject to the further terms set out in the Contract Note to be despatched to you by Macquarie Capital or FoxDavies, as the case may be (details of which are set out in paragraph 4.2 of this Appendix).

6.          Placing Shares

6.1         The Placing Shares will, when issued, be credited as fully paid and will rank in full for all dividends declared, made or paid after their issue and otherwise will rank pari passu in all respects with the existing issued Ordinary Shares.

6.2         Application will be made for the admission of the Placing Shares to trading on AIM.  It is expected that Admission will take place, and dealings in the Placing Shares will commence, on 31 December 2010.

7.          Placing Agreement

Macquarie Capital and FoxDavies have today entered into the Placing Agreement with the Company and the Directors under which each of Macquarie Capital and FoxDavies has agreed, on a conditional basis, each to use all reasonable endeavours as agents of the Company to procure Placees.  The Placing is not being underwritten.

8.          Placing conditions

8.1         The Placing Agreement contains various conditions in respect of the Placing.

8.2         The Placing is conditional, inter alia, on: (i) the passing, without amendment, of the EGM Resolutions; (ii) the Placing Agreement not being terminated in accordance with its terms; (iii) Admission becoming effective no later than 8.00 a.m. on 31 December 2010 or such other date as may be agreed between the Company and Macquarie Capital, not being later than the Long-Stop Date; and (iv) the Placing Agreement becoming unconditional in all other respects.

8.3         Certain conditions may be waived, in whole or in part, and the time for satisfaction of such conditions may be extended by Macquarie Capital (acting in its absolute discretion and without any obligation to make any such waiver or extension) by express written notice to the Company.

8.4         If any condition is not fulfilled or waived by Macquarie Capital by the relevant time, the Placing will lapse and your rights and obligations in respect of the Placing will cease and terminate at such time. The Placing Agreement may be terminated by Macquarie Capital at any time prior to Admission in certain circumstances including, inter alia, following a material breach of the Placing Agreement by the Company, or the occurrence of certain force majeure events.  The exercise of any right of termination pursuant to the Placing Agreement, any waiver of any condition in the Placing Agreement and any decision by Macquarie Capital whether or not to extend the time for satisfaction of any condition in the Placing Agreement or otherwise in respect of the Placing will be within the absolute discretion of Macquarie Capital.  Macquarie Capital will not have any liability to you in respect of any such termination, waiver or extension or any decision to exercise or not exercise any such right of termination, waiver or extension.

9.          Payment default

9.1         Your entitlement to receive Placing Shares will be conditional on Macquarie Capital's receipt of payment in full for such Placing Shares by the relevant time to be stated in the Contract Note referred to in paragraph 4.2 of this Appendix, or by such later time and date as Macquarie Capital may in its absolute discretion determine, and otherwise in accordance with the terms of that Contract Note.  Macquarie Capital may, in its absolute discretion, waive such condition, and will not be liable to you for any decision to waive or not to waive such condition.

9.2         If you fail to make such payment by the required time for any Placing Shares: (i) the Company may release itself, and (if at its absolute discretion it decides to do so) will be released from, all obligations it may have to allot and/or issue any such Placing Shares to you or at your direction which are then unallotted and/or unissued; (ii) the Company may exercise all rights of lien, forfeiture and set-off over and in respect of any such Placing Shares to the full extent permitted under its constitution or otherwise by law and to the extent that you then have any interest in or rights in respect of any such shares; (iii) the Company or, as applicable, Macquarie Capital may sell (and each of them is irrevocably authorised by you to do so) all or any such Placing Shares on your behalf and then retain from the proceeds of such sale, for the account and benefit of the Company or, where applicable, Macquarie Capital: (a) any amount up to the total amount due to it as, or in respect of, subscription monies, or as interest on such monies, for any Placing Shares; (b) any amount required to cover any stamp duty or stamp duty reserve tax arising on the sale; and (c) any amount required to cover dealing costs and/or commissions necessarily or reasonably incurred by it in respect of such sale; and (iv) you will remain liable to the Company and to Macquarie Capital and FoxDavies for the full amount of any losses and of any costs which any of them may suffer or incur as a result of: (a) not receiving payment in full for such Placing Shares by the required time; and/or (b) the sale of any such Placing Shares to any other person at whatever price and on whatever terms are actually obtained for such sale by or for it.  Interest may be charged in respect of payments not received by Macquarie Capital for value by the required time referred to above at the rate of two percentage points above the base rate of Barclays Bank plc.

10.         Placees' representations, warranties and undertakings to the Company, Macquarie Capital and FoxDavies

By agreeing with Macquarie Capital or FoxDavies, as the case may be, to subscribe for Placing Shares under the Placing you irrevocably acknowledge, represent, confirm, warrant and undertake to, and agree with, each of the Company, Macquarie Capital and FoxDavies, in each case as a fundamental term of your application for Placing Shares and of the Company's obligation to allot and/or issue any Placing Shares to you or at your direction, that:

(a)       you agree to and accept all of the terms and conditions set out in this announcement (including, but not limited to, this Appendix);

(b)      no prospectus, admission document or other offering document has been or will be prepared in connection with the Placing and you have not received a prospectus, admission document or other offering document in connection with the Placing and/or the Placing Shares;

(c)       the Ordinary Shares are admitted to trading on AIM, and the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules, which includes a description of the nature of the Company's business and the Company's most recent AIM admission document and financial statements and you are able to obtain or access such information without undue difficulty, and are able to obtain access to the Company's published financial statements or comparable information concerning any other publicly traded company without undue difficulty;

(d)      your rights and obligations in respect of the Placing will terminate only in the circumstances referred to in this announcement and will not be subject to rescission or termination by you in any circumstances;

(e)      this announcement, which has been issued by the Company, is the sole responsibility of the Company and neither Macquarie Capital or FoxDavies, nor any of their affiliates nor any person acting on their behalf or any of their affiliates have, or shall have, any liability for any information, representation or statement contained in this announcement or any information previously published by or on behalf of the Company in connection with the Placing;

(f)       you have not been, and will not be, given any warranty or representation in relation to the Placing Shares or to the Company or to any other member of its Group in connection with the Placing;

(g)      you have not relied on any representation or warranty in reaching your decision to subscribe for Placing Shares under the Placing;

(h)      you are not a client of Macquarie Capital or FoxDavies in relation to the Placing and neither Macquarie Capital or FoxDavies is acting for you in connection with the Placing and neither Macquarie Capital or FoxDavies will be responsible to you in respect of the Placing for providing protections afforded to their clients;

(i)        you have not been, and will not be, given any warranty or representation by any Macquarie Person or any FoxDavies Person in relation to any Placing Shares, the Company or any other member of its Group and no Macquarie Person nor any FoxDavies Person will have any liability to you for any information contained in this announcement or which has been published by the Company or for any decision by you to participate in the Placing based on any such information or on any other information provided to you;

(j)       in making your decision to acquire any Placing Shares, you: (i) have not relied on any investigation that Macquarie Capital or FoxDavies or any person acting on their behalf may have conducted with respect to the Placing Shares or the Company; (ii) have made your own investment decision regarding the Placing Shares based on your own knowledge (and information you may have or which is publicly available) with respect to the Placing Shares and the Company; (iii) have had access to such information as you deem necessary or appropriate in connection with your acquisition of any Placing Shares; and (iv) have sufficient knowledge and experience in financial and business matters and expertise in assessing credit, market and all other relevant risk and are capable of evaluating, and have evaluated, independently, the merits, risks and suitability of purchasing the Placing Shares;

(k)       you understand that by your acquisition or holding of any Placing Shares you are assuming, and are capable of bearing, the risk of loss that may occur with respect to the Placing Shares, including the possibility that you may lose all or a substantial portion of your investment in any Placing Shares, and you will not look to the Company, any Macquarie Person or any FoxDavies Person for all or part of any such loss or losses you may suffer;

(l)        you have neither received nor relied on any confidential price-sensitive information concerning the Company in accepting this invitation to participate in the Placing;

(m)      you will pay the full subscription amount as and when required in respect of all Placing Shares allocated to you and will do all things necessary on your part to ensure that payment for such Placing Shares and their delivery to you or at your direction is completed in accordance with the standing CREST instructions (or, where applicable, standing certificated settlement instructions) that you have in place with Macquarie Capital or put in place with Macquarie Capital with its agreement;

(n)      you are entitled to subscribe for Placing Shares under the laws of all relevant jurisdictions which apply to you and you have complied, and will fully comply, with all such laws (including where applicable, the Anti-Terrorism, Crime and Security Act 2001, the Proceeds of Crime Act 2002 and the Money Laundering Regulations 2007) and have obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such subscription, and you will provide promptly to Macquarie Capital and FoxDavies such evidence, if any, as to the identity or location or legal status of any person which Macquarie Capital and FoxDavies (or either or them) may request from you in connection with the Placing (for the purpose of its complying with any such laws or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by Macquarie Capital or FoxDavies (as applicable) on the basis that any failure by you to do so may result in the number of Placing Shares that are to be allotted and/or issued to you or at your direction pursuant to the Placing being reduced to such number, or to nil, as Macquarie Capital and FoxDavies may decide at their sole discretion;

(o)      you, and, if different, the beneficial owner of the Placing Shares, are not and at the time the Placing Shares are acquired, will not be residents of Australia, Canada, Japan, or South Africa or any other jurisdiction in which the Placing or any connected offer, invitation or solicitation is or would be unlawful;

(p)      you have complied and will comply with all applicable provisions of FSMA with respect to anything done or to be done by you in relation to any Placing Shares in, from or otherwise involving the United Kingdom and you have not made or communicated or caused to be made or communicated, and you will not make or communicate or cause to be made or communicated, any "financial promotion" in relation to Placing Shares in contravention of section 21 of FSMA;

(q)      you or your agent who manages investments on your behalf on a discretionary basis are a FSMA Qualified Investor;

(r)       you are acting as principal only in respect of the Placing or, if you are acting for any other person: (i) you are duly authorised to do so; (ii) you are and will remain liable to the Company and/or Macquarie Capital and FoxDavies for the performance of all your obligations as a Placee in respect of the Placing (regardless of the fact that you are acting for another person); (iii) you are both an "authorised person" for the purposes of FSMA and a "qualified investor" as defined at Article 2.1(e)(i) of Directive 2003/71/EC (known as the Prospectus Directive) acting as agent for such person; and (iv) such person is either: (a) a FSMA Qualified Investor; or (b) a"client" (as defined in section 86(2) of FSMA) of yours that has engaged you to act as his agent on terms which enable you to make decisions concerning the Placing or any other offers of transferable securities on his behalf without reference to him;

(s)       nothing has been done or will be done by you in relation to the Placing or to any Placing Shares that has resulted or will result in any person being required to publish a prospectus in relation to the Company or to any Ordinary Shares or Placing Shares in accordance with FSMA or the Prospectus Rules or in accordance with any other laws applicable in any part of the European Union or the European Economic Area;

(t)       you are not, and are not acting in relation to the Placing as nominee or agent for, a person who is or may be liable to stamp duty or stamp duty reserve tax in respect of any agreement to acquire (or any acquisition of) shares or other securities (including, without limitation, under sections 67, 70, 93 or 96 of the Finance Act 1986 concerning depositary receipts and clearance services), and the allocation, allotment, issue and/or delivery to you, or any person specified by you for registration as holder, of Placing Shares will not give rise to a liability under any such section; (ii) the person whom you specify for registration as holder of Placing Shares will be you or your nominee or (as applicable) the person for whom you are acting or its nominee; (iii) you and any person for whom you are acting will acquire Placing Shares on the basis that they will be allotted to the CREST stock account of Macquarie Capital and that Macquarie Capital will then hold them as settlement agent and as nominee for you or such person until settlement in accordance with Macquarie Capital's settlement instructions; (iv) payment for Placing Shares will be made simultaneously on their receipt in your stock account on a "delivery versus payment" (or "DVP") basis; and (v) neither Macquarie Capital nor FoxDavies nor the Company will be responsible to you or anyone else for any liability to pay stamp duty or stamp duty reserve tax resulting from any breach of, or non-compliance, with this paragraph;

(u)      you will not treat any Placing Shares in any manner that would contravene any legislation applicable in any territory or jurisdiction and no aspect of your participation in the Placing will contravene any legislation applicable in any territory or jurisdiction in any respect or cause the Company or Macquarie Capital or FoxDavies to contravene any such legislation in any respect;

(v)       you understand and acknowledge that the Placing Shares have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and are being offered and sold to you in a transaction that is exempt from, or not subject to, the registration requirements of the Securities Act and not involving any public offering;

(w)      you represent and warrant that, unless you duly execute and deliver to the Company and Macquarie Capital U.S.A. a US purchaser letter in the form provided to you by Macquarie Capital U.S.A. (the "US Purchaser Letter") in which you will make certain acknowledgements, representations, confirmations, warranties and undertakings (in addition to those contained in paragraph 11 of this Appendix), you: (i) are, or at the time the Placing Shares are acquired, you will be, the beneficial owner of such Placing Shares and are neither a person located in the United States nor acting on behalf of a person in the United States; (b) are, or at the time the Placing Shares are acquired, you will be, acquiring the Placing Shares in an "offshore transaction" (as defined in Regulation S under the Securities Act); and (c) will not offer or sell, directly or indirectly, any of the Placing Shares in the United States except in accordance with Regulation S or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act;

(x)       each of Macquarie Capital and FoxDavies are entitled, but shall be under no obligation to,satisfy its obligations to procure Placees by itself agreeing to become a Placee in respect of some or all of the Placing Shares or by nominating any other Macquarie Person or FoxDavies Person (as applicable) or any person associated with any Macquarie Person or FoxDavies Person (as applicable) to do so;

(y)       time is of essence as regards your obligations under this Appendix;

(z)       this Appendix and any contract (whether oral or written (and including, but not limited to the Contract Note referred to in paragraph 4.2 of this Appendix)) which may be entered into between you and Macquarie Capital or FoxDavies and/or the Company, and all non-contractual obligations arising between you and Macquarie Capital or FoxDavies and/or the Company, pursuant to or in connection with it or the Placing, will be governed by and construed in accordance with the laws of England, for which purpose you submit (for yourself and on behalf of any person on whose behalf you are acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute, or matter arising out of or relating to this Appendix or such contract, except that each of the Company, Macquarie Capital and FoxDavies will have the right to bring enforcement proceedings in respect of any judgment obtained against you in the English courts or in the courts of any other relevant jurisdiction;

(aa)     each right or remedy of the Company, Macquarie Capital or FoxDavies provided for in this Appendix is in addition to any other right or remedy which is available to such person and the exercise of any such right or remedy in whole or in part will not preclude the subsequent exercise of any such right or remedy;

(bb)     any  document that is to be sent to you in connection with the Placing will be sent at your risk and may be sent to you at any address provided by you to Macquarie Capital or FoxDavies;

(cc)     you shall indemnify and hold each of the Company, Macquarie Capital and FoxDavies harmless, on an after tax basis, from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach by you of the terms in this Appendix;

(dd)     your commitment to acquire Placing Shares on the terms set out in this announcement and in the Contract Note will continue notwithstanding any amendment that may in future be made to the terms of the Placing and you will have no right to be consulted or require that your consent be obtained with respect to the Company's conduct of the Placing.  The foregoing acknowledgements, representations, warranties, undertakings and confirmations are given for the benefit of the Company as well as Macquarie Capital and FoxDavies;

(ee)     nothing in this Appendix will exclude any liability of any person for fraud on its part, and all times and dates in this announcement are subject to amendment at the discretion of Macquarie Capital and FoxDavies, except that in no circumstances will the date scheduled for Admission be later than the Long-Stop Date; and

(ff)      none of your rights or obligations in respect of the Placing is conditional on any other person agreeing to subscribe any Placing Shares under the Placing and no failure by any other Placee to meet any of its obligations in respect of the Placing will affect any of your obligations in respect of the Placing.

11.         Placees' additional US representations, warranties and undertakings

In addition to the foregoing, if you are located in the United States, by agreeing to subscribe for Placing Shares under the Placing, you must duly execute and deliver to the Company and Macquarie Capital U.S.A., a US Purchaser Letter in which you will irrevocably acknowledge, represent, confirm, warrant and undertake to, and agree with, each of the Company and Macquarie Capital U.S.A., in each case as a fundamental term of your application for Placing Shares and of the Company's obligation to allot and/or issue any Placing Shares to you or at your direction, that:

(a)       you understand that no offering document or prospectus has been prepared;

(b)      you acknowledge that: (i) you may not rely on any investigation that Macquarie Capital U.S.A., any of its affiliates or any person acting on its or their behalf may have conducted, and none of such persons has made any representation to you, express or implied, with respect to the Placing Shares or the Company; (ii) you have conducted your own investigation with respect to the Placing Shares and the Company; and (iii) you have had access to such financial and other information and have been afforded the opportunity to ask such questions of representatives of the Company, and receive answers thereto, as you deem necessary in connection with your decision to purchase the Placing Shares;

(c)       you are a sophisticated investor having such knowledge and experience in financial and investment matters as to be capable of evaluating the merits and risk of an investment in the Placing Shares, and you are (or any account for which you are purchasing the Placing Shares is) a "qualified institutional buyer" as defined in Rule 144A under the Securities Act.  You have made an independent investigation and reached your own independent conclusions regarding the nature of the Placing Shares and the risks relating thereto, in general and in relation to your particular circumstances.  The decision to purchase the Placing Shares was based upon this independent appraisal and the advice of your own counsel and other advisers, to the extent you considered it appropriate to seek such advice;

(d)      you are acquiring the Placing Shares for your own account (or for accounts as to which you exercise sole investment discretion and have authority to make, and do make, the statements contained herein and in the US Purchaser Letter) for investment purposes and not with a view to any distribution of the Placing Shares;

(e)      you understand that: (i) the Placing Shares are not being, and will not be, registered under the Securities Act; (ii) the Placing Shares are being offered and sold to you in a transaction that is exempt from the registration requirements of the Securities Act; and (iii) the Placing Shares are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act;

(f)       you agree:

(i)       that in the event that you wish to dispose of any of the Placing Shares, you will not do so except:

(A)      in an offshore transaction meeting the requirements of Rule 904 of Regulation S under the Securities Act; or

(B)      in accordance with Rule 144A under the Securities Act; or

(C)      pursuant to an exemption from registration under the Securities Act provided by Rule 144 (if available); and in each case in accordance with all applicable securities laws of the states of the United States and other jurisdictions;

(ii)       not to deposit the Placing Shares in an unrestricted depositary receipt facility for so long as the Placing Shares are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act; and

(iii)      to notify any transferee to whom you subsequently reoffer, resell, pledge or otherwise transfer the purchased securities of the foregoing restrictions on transfer;

(g)      you are entitled to purchase the Placing Shares under the laws of all relevant jurisdictions which apply to you and agree that you will comply with applicable law with regard to any resale of any Placing Shares;

(h)      you confirm that, to the extent you are purchasing the Placing Shares for the account of one or more other persons: (i) you have been duly authorized to sign the US Purchaser Letter and make the confirmations, acknowledgements and agreements set forth herein and in the US Purchaser Letter on their behalf; and (ii) the provisions of the US Purchaser Letter constitute legal, valid and binding obligations of you and any other person for whose account you are acting; and

(i)        you acknowledge that the Company, Macquarie Capital U.S.A. and others will rely upon your confirmations, acknowledgments and agreements set forth herein and in the US Purchaser Letter, and you agree to notify the Company and Macquarie Capital U.S.A. promptly in writing if any of your representations or warranties herein or in the US Purchaser Letter ceases to be accurate and complete.  In this connection, you irrevocably authorize the Company and Macquarie Capital U.S.A. to produce the US Purchaser letter and any related documentation as may be required in any administrative or legal proceeding, official inquiry or in any other circumstances where this may be necessary or desirable with respect to the matters covered hereby.

DEFINITIONS

"Admission" means the admission of the Placing Shares to trading on AIM in accordance with the AIM Rules.

"AIM" means AIM, a market operated by the London Stock Exchange.

"AIM Rules"means the AIM Rules for Companies published by the London Stock Exchange (as amended or reissued from time to time).

"Company" means San Leon Energy plc.

"Contract Note" has the meaning given to it in paragraph 4.2 of this Appendix.

"CREST"means the relevant system (as defined in the Regulations) in respect of which Euroclear is the Operator (as defined in the Regulations).

"Directors" means the directors of the Company.

"EGM" means the extraordinary general meeting of the Company at which the EGM Resolutions are to be considered, and if thought fit, passed.

"EGM Resolutions"means the resolutions numbered 1, 2 and 3 to be considered, and if thought fit, passed at the EGM.

"Euroclear" means Euroclear UK & Ireland Limited.

"FoxDavies" means Fox-Davies Capital Limited.

"FoxDavies Person"means any person being: (i) FoxDavies; (ii) an undertaking which is a subsidiary undertaking of FoxDavies; (iii) a parent undertaking of FoxDavies or a subsidiary undertaking of any such parent undertaking; or (iv) a director, officer, agent or employee of any such person.

"FSA" means the Financial Services Authority.

"FSMA" means the Financial Services and Markets Act 2000 (as amended) including any regulations made pursuant thereto.

"FSMA Qualified Investor"means a person who is a "qualified investor" as referred to at section 86(7) of FSMA and at or to whom any private communication relating to the Company that is a "financial promotion" (as such term is used in relation to FSMA) may lawfully be issued, directed or otherwise communicated without the need for it to be approved, made or directed by an "authorised person" as referred to in FSMA.

"Group" means the group of which the Company is the parent and its subsidiary undertakings are members.

"London Stock Exchange"means London Stock Exchange plc.

"Long-Stop Date"has the meaning given to it in paragraph 3.3 of this Appendix.

"Macquarie Capital"means Macquarie Capital (Europe) Limited.

"Macquarie Capital U.S.A." means Macquarie Capital (U.S.A.) Inc.

"Macquarie Person"means any person being: (i) Macquarie Capital; (ii) an undertaking which is a subsidiary undertaking of Macquarie Capital; (iii) a parent undertaking of Macquarie Capital or a subsidiary undertaking of any such parent undertaking; or (iv) a director, officer, agent or employee of any such person.

"Ordinary Shares"means the ordinary shares of €0.05 in the issued share capital of the Company.

"Placees" has the meaning given to it in paragraph 1(a) of this Appendix.

"Placing" means the proposed conditional placing of the Placing Shares to Placees pursuant to the Placing Agreement and on and subject to the terms and conditions set out or referred to in this announcement (including this Appendix).

"Placing Agreement"means the conditional placing agreement relating to the Placing between the Company, the Directors, Macquarie Capital and FoxDavies to be dated the same date as this announcement and as further described in paragraph 7 of this Appendix.

"Placing Price"means 18 pence per Placing Share.

"Placing Shares"means 331,313,333 new Ordinary Shares to be made available to Placees for subscription under the Placing.

"Prospectus Rules"means the Prospectus Rules of the UK Listing Authority made under Part VI of FSMA.

"Regulations"means the Uncertificated Securities Regulations 2001 (SI 2001/3755) (as amended).

"Securities Act"has the meaning given to it in paragraph 2 of this Appendix.

"Shareholders" means holders of Ordinary Shares, from time to time.

"United Kingdom"means the United Kingdom of Great Britain and Northern Ireland.

"UK Listing Authority" means the FSA acting in its capacity as the competent authority in the United Kingdom under Part VI of FMSA.

"United States"means the United States of America, its territories and possessions, any state of the United States and the District of Columbia.

"US Purchaser Letter"has the meaning given to it in warranty (w) found in paragraph 10 of this Appendix.

 

END

 

 

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