Completion of Foum Draa Farm-Out, Offshore Morocco

RNS Number : 7432W

San Leon Energy PLC

31 January 2013

 



31 January 2013

San Leon Energy Plc

("San Leon" or the "Company")

Completion of Foum Draa Farm-Out

Highlights

·      San Leon Finalises farm-out to Cairn Energy PLC (Cairn)_of Foum Draa Block, Offshore Morocco

·      Exploration well targeted for Q4 2013

Following the Company's announcement of the farm-out agreement with Cairn Energy Plc ("Cairn") on 28 August 2012, San Leon is pleased to announce that all parties have now received full Moroccan Authorities approval of the assignment of interest in the Foum Draa farm-out agreement..

Cairn has now assumed operatorship of the Foum Draa block, offshore Morocco ("Foum Draa" or "Block") and plans to drill an exploration well targeting a Lower Cretaceous objective in Q4 2013.

Cairn has acquired a net 50% operated equity interest in Foum Draa, pro rata from each of San Leon, Serica Energy plc ("Serica") and Longreach Oil and Gas Ventures Limited ("Longreach") (together the "Partners"). In return, Cairn will now pay its equity interest share of past costs, being US$1.5 million (US$850,000 net to San Leon) and pay the first US$60 million towards the drilling of the commitment exploration well.

San Leon Energy now holds a net operated interest of 14.17%, Serica holds 8.33% and Longreach holds 2.5% in the Foum Draa Block. ONHYM, the National Bureau of Petroleum and Mines will continue to hold 25%.

Executive Chairman, Oisin Fanning commented:

"We would like to thank the Moroccan Authorities for their approval of this transaction which now clears the way for the drilling of our first exploration well offshore Morocco. Depending on rig availability the current target is to drill the well this year. This Block contains mapped prospects and the farm-out agreement reduces our financial exposure but keeps our interest at a level which still offers attractive upside for our shareholders."

For further information contact:

San Leon Energy Plc	Tel: [phone]
Oisin Fanning, Executive Chairman
John Buggenhagen, Exploration Director
Macquarie Capital (Europe) Limited	Tel: [phone]
John Dwyer
Fox Davies Capital	Tel: [phone]
Daniel Fox-Davies
Richard Hail
FirstEnergy Capital LLP	Tel: [phone]
Hugh R. Sanderson
David van Erp
Westhouse Securities (Nominated Advisor)	Tel: [phone]
Richard Johnson
Antonio Bossi
College Hill Associates	Tel: [phone]
Rupert Trefgarne
Alexandra Roper

www.sanleonenergy.com

Qualified person

John Buggenhagen, who has reviewed this update, has over 15 years experience in the oil & gas industry. He has a Ph.D. and M.Sc. in Geophysics from the University of Wyoming and a B.Sc. in Geophysics from the University of Arizona. He is currently the Director of Exploration for the San Leon Energy Group and based in San Leon's Warsaw office in Poland.

 

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