Final Results

RNS Number : 0700I

San Leon Energy PLC

28 June 2013

 



28 June 2013

San Leon Energy Plc

Final Results for the year ended 31 December 2012

San Leon Energy Plc ("San Leon" or the "Company"), the AIM listed company focused on oil and gas exploration in Europe and North Africa today announces its audited final results for the year ended 31 December 2012.

Highlights:

Poland:

· Successful completion of the Siciny-2 well in the SW Carboniferous Basin, encountering four potential unconventional producing zones

· Rogity -1 well, San Leon's second shale gas exploration well in the Baltic Basin, encountered continuous gas shows over more than 500 metres of the Lower Silurian, Ordovician and Middle Cambrian sections.

· Szymkowo-1, the Company's third shale gas exploration well in the Baltic Basin, encountered strong gas shows in the Lower Silurian and Ordovician shales

· Good progress made on the Main Dolomite Southern Permian Basin oil play:

-     Lelechow-SL1 and Czaslaw -SL1 successfully completed with encouraging  oil shows

· JV arrangement with Celtique Energy Poland to jointly develop Celtique's existing concessions in the Southern Permian/SW Carboniferous basin

· The Company's subsidiary, NovaSeis, successfully completed multiple 2D and 3D seismic acquisition programmes across eight concessions

· New Licences awarded:

-    Praszka concession in the Southern Permian/SW Carboniferous Basin covering 296,082 acres

-    Czersk concession in the Baltic Basin covering 173,584 acres

· Expansion of the Rawicz concession  in the Permian/SW Carboniferous Basin, which includes the existing Rawicz gas field

· Acquired a 75% working interest in three Polish concessions held by Hutton Energy

Morocco:

· Completed farm-outs of  the Company's interest in two offshore Morocco blocks:

- Cairn Energy acquired a 50% interest in the Foum Draa block in return for back costs and a gross carry of US$60m on the first well

- Genel Energy acquired a 60% interest in the Sidi Moussa block  in return for back costs and a carried interest in exploration costs, including one well, of up to US$50m

· Completed the acquisition of more than 2,280 km of 2D seismic across its Tarfaya and Zag licences, onshore Morocco

· A study performed by Enefit Outotec Technology ("EOT") on the Tarfaya Oil Shale acreage suggested that a commercial project is possible

· Awarded four additional shallow oil shale blocks in existing Tarfaya Oil Shale Acreage and received an extension of exclusivity period to March 2014

Albania:

· Interpretation of pre-stack depth migration has identified multiple significant and diverse oil and gas prospects in the Durresi Block, offshore Albania  

Ireland:

· A third party CPR  on the Barryroe field, where San Leon holds a 4.5% Net Profit Interest in the full field has estimated 2C Contingent Resources of 346 mmboe

Corporate:

· Announced the acquisition of Aurelian Oil & Gas in November 2012, completed post year-end

· Establishment of Advisory Committee

· Appointed FirstEnergy as Joint Broker

· Admission of ADR's onto OTCQX with Deutsche Bank appointed as the Company's depository bank

Financial:

· Revenue for the year amounted to €1.37m (2011: €1.04m)

· Profit before income tax for the year of €0.47m (2011: €15.64m)

· Net assets increased by €18.3m to €210.2m  at 31 December 2012

· Completion of Aurelian Oil & Gas acquisition in January 2013, resulting in a further increase in net assets of €62.1m (including €31.9m in cash).

Operational Outlook:

· DFIT, currently underway, and possible frack on Siciny-2  by Halliburton

· Further acidisation and testing of Czaslaw-SL1

· Fracturing of Baltic Basin wells to be carried out by United Oilfield Services

· Preparations to drill one well in the Foum Draa Block are underway, expected to spud in late H2 2013

· The first well in the Sidi Moussa Block, offshore Morocco, to spud Q1 2014

· Tarfaya Oil Shale feasibility studies continuing with EOT

· Farm-out  discussions in process to fund drilling of first offshore well targeted for 2014 in the Durresi Block, Albania 

· A 3D seismic programme has commenced on the Group's Brodina Block in Romania to identify a drilling location on the Putna prospect

Oisin Fanning, Chairman of San Leon said:

"2012 was another progressive and successful year for San Leon when we continued to add value to our key exploration projects. We made significant progress across our portfolio with the drilling of five wells on our Polish concessions offering promising results, the completion of farm-outs on our two Moroccan offshore licences on attractive terms to well-known and respected operators, and we increased our understanding of our potentially high impact Albanian block. The Barryroe oil field, offshore Ireland, where we own 4.5% Net Profit Interest was also drilled with positive test results announced.

In November, we were pleased to announce San Leon's fourth major transaction in as many years, the merger with fellow European explorer Aurelian. The transaction comprised of a substantial injection of cash, with net assets at completion of around €62 million (including cash of €31.9 million), and significant acreage that was highly complementary to San Leon's existing holdings. Aurelian has operated in Poland for over a decade, and recently drilled two of the first multi-fractured horizontal wells in the country. Expertise and experience such as this will aid San Leon greatly in its quest to unlock unconventional resources across its portfolio.

 San Leon holds a remarkable acreage position for a company of its size, and the partners we have attracted to our projects in the last year are testament to the potential we believe exists on our licences. We now look forward to a successful 2013. We have a great portfolio with a talented team of individuals capable of exploiting these assets. The next twelve months will be the most important in the Company's history as we test our major plays and success in any of these projects could prove transformational for the Company."

For further information contact:

San Leon Energy Plc	Tel: [phone]
Oisin Fanning, Executive Chairman
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]
David Simonson
Alexandra Roper
Plunkett Public Relations	Tel: [phone]
Sharon Plunkett
Jennie Cotter

Chairman's review

2012 was another progressive and successful year for San Leon when we continued to add value to our key exploration projects. We made significant progress across our portfolio with the drilling of five wells on our Polish concessions offering promising results, the completion of farm-outs on our two Moroccan offshore licences on attractive terms to well-known and respected operators, and we increased our understanding of our potentially high impact Albanian block. The Barryroe oil field, offshore Ireland, where we own 4.5% Net Profit Interest was also drilled with positive test results announced.

Since the year end, the Company has pressed on, forming strategic relationships with Halliburton and United Oilfield Services to further appraise our unconventional licences in Poland. Following a change in Talisman's global strategic focus, we also reacquired Talisman's share of the highly prospective Baltic Basin blocks, while in the Southern Permian Basin we recently commenced the stimulation and testing of the Siciny-2 and Czaslaw-SL1 wells.

Our share price performance during 2012 was better than many of our peers but still disappointing. We would have liked to have seen stronger gains. We believe this lesser than expected performance partly reflects the market's current view of AIM-listed exploration and production companies, where asset portfolios are being risked significantly.

Our merger with Aurelian, completed in January this year, has increased the financial, operational and resource base of the Company and leaves us ideally placed to capitalise on our exciting and diverse portfolio in 2013 and beyond.

Aurelian

In November we were pleased to announce San Leon's fourth major transaction in as many years, the merger with fellow European explorer Aurelian by way of a scheme of arrangement under Part 26 of the UK Companies Act 2006.

The transaction comprised of a substantial injection of cash, with net assets at completion of around €62 million (including cash of €31.9 million), and significant acreage that was highly complementary to San Leon's existing holdings.

With the majority of Aurelian's assets concentrated in Poland the combined entity has become the leading independent licence holder in that country, second in acreage only to PGNiG, the national oil and gas company. Aurelian's Polish acreage further diversifies San Leon's interests across diverse play types and depths, giving maximum exposure to any success in the region.

Aurelian has operated in Poland for over a decade, and recently drilled two of the first multi-fractured horizontal wells in the country. Expertise and experience such as this will aid San Leon greatly in its quest to unlock unconventional resources across its portfolio.

Other assets included in the transaction were licences in Romania and Slovakia, and infrastructure and people in the UK, Poland, Romania, Slovakia and Bulgaria.

Since completion in late January 2013 we have been assessing the combined portfolio in order to rationalise and prioritise the most prospective licences. The combined entity will farm down or relinquish some licences as part of this process, and we are identifying synergies to streamline the operation of the merged company.

Poland

We made significant progress on our licences in Poland during 2012.

In February 2012 we completed drilling of the Siciny-2 well, which encountered four potential unconventional producing zones totalling more than 500 metres thickness. Work is on-going, and although Siciny is undoubtedly a complex system it has the potential to transform the Company and substantially change the energy equation in Poland. In 2013 we signed a memorandum of understanding with Halliburton whereby they will perform and fund a DFIT on the Siciny-2 well and then have the option to frack the well. Subject to the execution of a binding agreement, Halliburton can choose to earn up to 25% equity in the Carboniferous elements of the Wschowa, Gora and Rawicz licences by drilling two further exploration wells at their expense.

We believe that this provides a good indication of the scale and deliverability of Siciny, and we shall report on the results of the injection tests when completed in due course.

In July 2012 we announced the completion of our Szymkowo-1 well, the third in our Baltic Basin play, which encountered strong gas shows in the Lower Silurian and Ordovician intervals. Talisman's exit from the Baltic Basin in Poland to concentrate on its core areas has proven serendipitous for the Company. Talisman carried San Leon on three wells in the Baltic Basin where we believe material progress has been made on the shale gas play. We have regained operatorship, 100% ownership of the Gdansk W and Braniewo S concessions, and 50% ownership of the Szczawno concession. We also received cash and fixed assets together worth approximately €7.8 million. The recent framework agreement with United Oilfield Services, where the Company will receive competitive rates for fracturing services and can choose to pay for certain services in a combination of cash and equity, means fracture stimulation of the Baltic Basin wells can proceed in the near future. We expect to complete a vertical fracture in our Gdansk W Concession in July, the results of which could have a significant impact on our Company.

The arrangements with Halliburton and United Oilfield Services represent unique and innovative solutions to ensuring our licences are further appraised by world class companies whilst minimising our own capital exposure to exploration and development.

The Company progressed its Main Dolomite unconventional oil play in the Southern Permian Basin Nowa Sol concession considerably during 2012. The Lelechow-SL1 well encountered significant natural fracturing, which brought in surrounding formation water over the oil saturation in the matrix. The second well on Nowa Sol, Czaslaw-SL1, was spudded in October and encountered encouraging gas shows and oil. Results of our successful stimulation test indicate system permeability in line with the Bakken Formation in North America.

In the Southern Permian carboniferous play, the Company entered into a JV arrangement with Celtique in July 2012. We will earn a 50% interest in Block 243 by acquiring 3D seismic data and drilling a well in the licence area. In Laksi, we can earn a 50% interest by acquiring 3D seismic data and exercising an option to participate in an exploration well. We have the option to relinquish Laksi after completion of the seismic. We hope this work will add to the understanding of this evolving play and augment the knowledge gained over the past years.

Morocco

The Company was pleased to announce in August 2012 the completion of the farm-outs of two Moroccan offshore licences to two major E&P operators.

On the Foum Draa block, Cairn acquired 50% of the licence from existing partners in return for a payment of back costs and a gross carry of USD60 million on the first offshore well. San Leon's net interest post farm-out is 14.17%, which reduces our financial exposure whilst maintaining very attractive upside potential. Preparations to drill the well are underway and we expect the well to spud in the second half of 2013.

On the Sidi Moussa block, Genel acquired 60% of the licence for payment of back costs and a gross carry on the first exploration well of USD50 million. San Leon's net interest has been reduced to 8.5%, which is more appropriate for a company of our size on an offshore project of this nature. We hope the well will be drilled in the first half of 2014.

We continue to make progress on our onshore assets. We have mapped new prospects on our Zag and Tarfaya licences while a study performed by Enefit on the Tarfaya oil shale has suggested an oil yield of 72 litres of oil per ton of extracted material is achievable and a commercial operation is possible. The Company is now evaluating the optimal configuration for any production facility.

Albania

Following the 840 km2 3D seismic survey performed on the Durresi block in 2011, we continued our appraisal of the block by carrying out a prestack depth migration in 2012. The interpretation of this data has identified the 'Alban Complex', with estimated prospective recoverable resources of 3.2 TCF of gas and 145 mmbbls of condensate. This interpretation and analysis is on-going.

In 2013, a two-year extension to the licence was signed and is awaiting Council of Ministers approval. This will allow us additional time to find a partner to fund the drilling of our first offshore well in Albania. The centre of the Alban Complex involves significantly high pressures which will increase well costs and require specialised farm-in expertise.

Ireland

The Company was pleased to note throughout the year a steady stream of resource updates on the Barryroe oil field, where we hold a 4.5% Net Profit Interest on the full field.

The most recent update, a third party CPR performed by Netherland Sewell & Associates Inc., indicated that 2C Contingent Resources stand at 346 mmboe. This is proving to be a very valuable asset for San Leon and the decision to negotiate a Net Profit Interest in the field means that we have an asset with significant upside but no capital requirements.

Our other territories

The Company was recently granted two further onshore licences in Spain. The Aquiles and Cronos licences, respectively situated in the Zaragoza and Almazan Basins, both contain unconventional Paleozoic resource potential and potentially shallower conventional targets. In Romania, we have agreed to shoot a 300 km2 3D seismic survey over an exciting prospect on our Brodina block with our partner S.N.G.N. Romgaz S.A. Preparations for the survey have commenced.

Seismic data

San Leon established NovaSeis in 2011 to acquire onshore seismic data at significantly reduced costs. NovaSeis offers the Company the flexibility to optimise acquisition parameters in any terrain while using the latest wireless seismic acquisition technology to reduce surface footprint.

The crew commenced acquisition in Morocco in 2011, completing more than 2,280km of 2D seismic across the Company's Tarfaya and Zag licences by Q1 2012.

NovaSeis then mobilised to Poland where it has successfully completed multiple 2D and 3D programmes across eight concessions, including concessions with joint venture partners. To date in Poland, NovaSeis has acquired 350 km of 2D data and 695 km2 of 3D data in very complex and demanding rural and urban environments.

Financial Review

2012 was another year of strong financial management which saw the Group finance a significant exploration programme with a combined investment of over €44 million on its exploration assets. This was achieved through a combination of cash resources, realisation of asset value through the disposal of its Amstel royalty, farm-outs to diversify risk and reduce capital requirements and the selective use of short term debt facilities to strategically manage its financial and operational position.

Turnover for the year increased to €1.37 million (2011: €1.04 million) primarily due to the completion of the first third party seismic operation revenues generated by our seismic company, NovaSeis. This revenue stream has the capacity to be increased in future periods as we complete the Group's short-term seismic obligations on concession areas with the option to engage in additional third party projects.

The profit for the year was €0.47 million (2011: €15.6 million). In 2012, San Leon disposed of its Amstel Royalty Interest for €9.9 million realising a gain of €5.34 million. The decrease in profit is primarily due to the disposal of our 30% licence interest in Barryroe in exchange for a 4.5% Net Profit Interest in the licence, which resulted in a gain of €22 million in 2011. Administration expenses have decreased to €6.01 million (2011: €7.22 million). The resulting Earnings Per Share was 0.04 cent in 2012 compared to 1.84 cent in 2011.

Group net assets increased by €18.3 million to €210.2 million at 31 December 2012 (2011: €191.9 million). This net asset base has been augmented by the completion of the Aurelian acquisition in January 2013 which increased our net assets by a further €62.1 million, including €31.9 million in cash.

Corporate

Besides the Aurelian acquisition, the Company announced in June 2012 the sale of its overriding royalty interest in the Amstel field in the Netherlands to GDF Suez E&P for €9.9 million.

In August, we announced the appointment of FirstEnergy to the position of joint broker, and in September we were pleased to announce the appointment of Con Casey to the Board as a Non-Executive Director. He brings with him a wealth of financial experience and knowledge.

Outlook

Despite a challenging 2012 environment the Company has many reasons to be prudently optimistic. The Aurelian acquisition resolved short-term cash requirements and added some very interesting and prospective acreage.

San Leon holds a remarkable acreage position for a company of its size, and the partners we have attracted to our projects in the last year are testament to the potential we believe exists on our licences.

We now look forward to a successful 2013. We have a great portfolio with a talented team of individuals capable of exploiting these assets. The next twelve months will be the most important in the Company's history as we test our major plays and success in any of these projects could prove transformational for the Company.

Highlights of the program for 2013 include:

Poland

·    Halliburton DFIT, currently underway and frac on Siciny -2

·    Czaslaw-SL1 acidisation and test, currently underway

·    Fracturing of Baltic Basin Wells by United Oilfield Services

·    2D Seismic acquisition across SW Carboniferous Basin

Morocco

·    Foum Draa exploration well, offshore Morocco

·    Sidi Moussa exploration well, offshore Morocco (Q1 2014)

·    Tarfaya Oil Shale feasibility studies continuing with Enefit

Albania

·    Management of potential farm-out process on Durresi Block

·    Preparation for drilling off-shore well in 2014

Romania

·    3D Seismic on San Leon's Brodina block to identify a drilling location on the Putna prospect

Consolidated income statement

for the year ended 31 December 2012

		2012	2011
		€	€
Continuing operations
Revenue		1,370,590	1,039,654
Cost of sales		(816,900)	(566,469)
Gross profit		553,690	473,185
Other income		5,339,031	25,990,204
Administrative expenses		(6,012,944)	(7,225,224)
Exploration costs written-off		-	(2,684,290)
(Loss)/profit from operating activities		(120,223)	16,553,875
Finance expense		(2,549,620)	(1,258,186)
Finance income		3,170,110	344,255
Share of loss of equity-accounted investments		(29,403)	(4,715)
Profit before income tax		470,864	15,635,229
Income tax expense		(10,197)	(35,344)
Profit for the year attributable to equity holders of the Group		460,667	15,599,885

Consolidated statement of comprehensive income 

for the year ended 31 December 2012

		2012	2011
		€	€
Profit for the year		460,667	15,599,885
Foreign currency translation differences - foreign operations		2,596,068	915,281
Fair value movements in available-for-sale financial assets		(436,721)	-
Total comprehensive income for the year		2,620,014	16,515,166

Earnings per share:
Basic earnings per ordinary share		0.04 cent	1.84 cent
Diluted earnings per ordinary share		0.04 cent	1.77 cent

Consolidated statement of changes in equity

for the year ended 31 December 2012

	Share capital	Share premium	Currency translation reserve	Share based payment reserve		Fair Value Reserve		Retained earnings				Attributable to equity holders of the Group			Non-controlling interest	Total equity
2011	€	€	€	€		€		€				€			€	€
Balance at 1 January 2011	39,099,780	91,589,215	382,768	3,417,145		-		(13,262,316)				121,226,592			-	121,226,592
Total comprehensive income for year
Profit for the year	-	-	-	-		-		15,599,885				15,599,885			-	15,599,885
Other comprehensive income
Foreign currency translation differences	-	-	915,281	-		-		-				915,281			-	915,281
Total comprehensive income for year	-	-	915,281	-		-		15,599,885				16,515,166			-	16,515,166
Transactions with owners recognised directly in equity
Contributions by and distributions to owners
Issue of shares related to business combination	14,204,217	24,912,101	-	-		-			-			39,116,318			-	39,116,318
Issue of shares	1,542,267	3,938,527	-	-		-			-			5,480,794			-	5,480,794
Share options and warrants exercised	663,921	437,243	-	-		-			-			1,101,164			-	1,101,164
Share based payment	-	-	-	2,792,554		-			-			2,792,554			-	2,792,554
Effect of share options exercised	-	-	-	(748,211)		-			748,211			-			-	-
Share to be issued on Realm acquisition on conversion of exchangeable shares	-	-	-	-		-			-			-			5,685,721	5,685,721
Shares issued to Realm shareholders on conversion of exchangeable shares	1,148,406	2,014,134	-	-		-			-			3,162,540			(3,162,540)	-
Total transactions with owners	17,558,811	31,302,005	-	2,044,343		-			748,211			51,653,370			2,523,181	54,176,551
Balance at 31 December 2011	56,658,591	122,891,220	1,298,049	5,461,488		-			3,085,780			189,395,128			2,523,181	191,918,309

Consolidated Statement of changes in equity For the year ended 31 December 2012
	Share capital	Share Premium	Currency translation reserve	Share based payment reserve	Fair Value Reserve	Retained earnings	Attributable to equity holders of the Group	Non-controlling interest	Total equity
2012
Balance at 1 January 2012	56,658,591	122,891,220	1,298,049	5,461,488	-	3,085,780	189,395,128	2,523,181	191,918,309
Total comprehensive income for year
Profit for the year	-	-	-	-	-	460,667	460,667	-	460,667
Other comprehensive income
Foreign currency translation differences - foreign operations	-	-	2,596,068	-	-	-	2,596,068	-	2,596,068
Fair value movements in available-for-sale financial assets	-	-	-	-	(436,721)	-	(436,721)	-	(436,721)
Total comprehensive income for year	-	-	2,596,068	-	(436,721)	460,667	2,620,014	-	2,620,014
Transactions with owners recognised directly in equity
Contributions by and distributions to owners
Issue of shares on acquisition of equity accounted investments	4,271,283	7,610,716	-	-	-	-	11,881,999	-	11,881,999
Share warrants exercised	148,500	319,648	-	-	-	-	468,148	-	468,148
Share based payment	-	-	-	3,436,353	-	-	3,436,353	-	3,436,353
Effect of share options cancelled	-	-	-	(944,519)	-	748,788	(195,731)	-	(195,731)
Effect of warrants issued on loan note	-	-	-	21,125	-	-	21,125	-	21,125
Shares issued by Realm shareholders on conversion of exchangeable shares	393,265	689,866	-	-	-	-	1,083,131	(1,083,131)	-
Total transactions with owners	4,813,048	8,620,230	-	2,152,959	-	748,211	16,695,025	(1,083,131)	15,611,894
Balance at 31 December 2012	61,471,639	131,511,450	3,894,117	7,974,447	(436,721)	4,295,235	208,710,167	1,440,050	210,150,217

Consolidated statement of financial position

as at 31 December 2012

		2012	2011
		€	€
Assets
Non-current assets
Intangible assets		165,390,968	140,263,276
Equity accounted investments		17,178,666	3,026,864
Property, plant and equipment		9,859,676	9,278,608
Other non-current assets		2,291,660	816,928
Financial assets - Net Profit Interest		38,761,256	39,197,977
		233,482,226	192,583,653
Current assets
Inventory		590,211	757,669
Trade and other receivables		6,293,870	8,064,400
Other financial assets		928,452	502,620
Cash and cash equivalents		1,824,799	26,197,963
		9,637,332	35,522,652
Total assets		243,119,558	228,106,305
Equity and liabilities
Equity
Called up share capital		61,471,639	56,658,591
Share premium account		131,511,450	122,891,220
Share based payment reserve		7,974,447	5,461,488
Currency translation reserve		3,894,117	1,298,049
Fair value reserve		(436,721)	-
Retained profit		4,295,235	3,085,780
Attributable to equity holders of the Group		208,710,167	189,395,128
Non-controlling interest		1,440,050	2,523,181
Total equity		210,150,217	191,918,309
Non-current liabilities
Derivative		1,884,251	-
Provisions		5,345,211	5,345,211
Loans and borrowings		-	2,671,219
Deferred tax liabilities		9,329,447	9,329,447
		16,558,909	17,345,877
Current liabilities
Trade and other payables		7,732,906	12,113,951
Loans and borrowings		7,117,293	5,177,144
Provisions		1,560,233	1,551,024
		16,410,432	18,842,119
Total liabilities		32,969,341	36,187,996
Total equity and liabilities		243,119,558	228,106,305

Consolidated statement of cash flows

for the year ended 31 December 2012      

		2012	2011
		€	€
Cash flows from operating activities
Profit before tax		470,864	15,635,229
Adjustments for:
Depletion and depreciation		135,930	522,726
Finance expense		2,549,620	1,258,186
Finance income		(3,170,110)	(344,255)
Share based payments charge		765,909	866,038
Foreign exchange		1,431,437	(1,283,211)
Gain on assignment of Barryroe licence		-	(22,408,037)
Gain on disposal of Amstel Royalty Interest		(5,336,923)	-
Exploration costs written-off		-	2,684,290
Increase in other non-current assets		(1,478,683)	-
Decrease/(Increase) in stocks		167,458	(757,669)
Decrease/(Increase) in trade and other receivables		2,888,703	(6,030,610)
(Decrease)/Increase in trade and other payables		(2,209,583)	3,111,101
Share of loss of equity-accounted investments		29,403	4,715
Tax repaid/(paid)		31,970	(37,979)
Net cash (used) in operating activities		(3,724,005)	(6,779,476)
Cash flows from investing activities
Expenditure on exploration and evaluation assets		(26,459,867)	(39,440,563)
Joint venture partner share of exploration costs		719,951	8,999,859
Purchases of property, plant and equipment		(1,086,639)	(7,353,565)
Interest received		128,868	318,206
Net cash acquired with subsidiary		-	5,216,546
(Increase)/Release of restricted cash		(533,956)	941,883
Acquisition of Equity Accounted Investments		(1,872,778)	-
Advances to Equity Accounted Investments		(571,507)	-
Proceeds of Amstel Royalty disposal		9,898,125	-
Net cash (used) in investing activities		(19,777,803)	(31,317,634)
Cash flows from financing activities
Proceeds from issue of share capital, net of costs		279,688	6,302,541
Repayment of convertible loan		-	(2,150,000)
Proceeds from drawdown of other loans		3,186,024	-
Repayment of other loans		(3,918,569)	(7,360,572)
Interest paid		(572,113)	(370,798)
Net cash (used) in financing activities		(1,024,970)	(3,578,829)
Net (decrease) in cash and cash equivalents		(24,526,778)	(41,675,939)
Effect of foreign exchange fluctuation on cash and cash equivalents		153,614	705,243
Cash and cash equivalents at start of year		26,197,963	67,168,659
Cash and cash equivalents at end of year		1,824,799	26,197,963

Notes to the Financial Statements

General

San Leon Energy plc ("the Company") is a company incorporated in Ireland. The Group financial statements consolidate those of the Company with those of its subsidiaries (together referred to as "the Group").

The financial information presented in this report has been prepared using accounting policies consistent with International Financial Reporting Standards ("IFRS") as adopted by the European Union and as set out in the Group's annual financial statements in respect of the year ended 31 December 2012. The financial information herein does not include all the information and disclosures required in the annual financial statements, however the full financial statements are included within the Annual Report which are being distributed to shareholders and which are available on the Company's website www.sanleonenergy.com. It will also be filed with the Company's Annual Return in the Companies Registration Office.

The financial information herein for the prior year ended 31 December 2011 represents an abbreviated version of the Group's statutory financial statements and the financial statements for the year ended 31 December 2011 have been filed with the Companies Registration Office.

 

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