Genel Energy to farm-in to Sidi Moussa Block

RNS Number : 6014K

San Leon Energy PLC

23 August 2012

 



23 August 2012

San Leon Energy Plc

("San Leon" or the "Company")

Genel Energy to farm-in to San Leon's Sidi Moussa Block, offshore Morocco

San Leon is pleased to announce that it has signed a farm-in agreement with Genel Energy Plc ("Genel") under which Genel has committed to drilling an exploration well in the Sidi Moussa Block, offshore Morocco ("Sidi Moussa" or "Block").

Under the agreement, Genel will acquire a 60% equity interest in Sidi Moussa, pro rata from each of San Leon, Serica Energy plc ("Serica") and Longreach Oil and Gas Ventures Limited ("Longreach") (together the "Partners").  In return, Genel will pay its equity interest share of past costs, being US$1.3 million (US$736,667 net to San Leon) and pay for the drilling and exploration well up to a cap of US$50 million. The agreement is subject to necessary Moroccan Authorities approvals.

Genel has also committed to providing the $16.5 million bank guarantee required by the Moroccan Authorities to enter the First Extension Period.

Pre completion of the farm-in agreement, San Leon Energy held a 42.5% net operated interest in the block, Serica held 25% and Longreach held 7.5%. ONYHM, the National Bureau of Petroleum and Mines holds Morocco (25%).

Post farm-in, Genel will hold a 60% net operated interest, San Leon Energy will hold 8.5%, Serica will hold 5% and Longreach will hold 1.5%. ONYHM, the National Bureau of Petroleum and Mines will continue to hold 25%.

The Partners have already informed the Moroccan authorities of their intention to proceed into the First Extension Period, which contains a commitment to drill an exploration well.

Executive Chairman, Oisin Fanning commented:

"We are delighted to welcome Genel Energy into this Block. San Leon committed itself to carrying out extensive work offshore Morocco in the past two and a half years and this farm-in agreement is the next step up. Sidi Moussa, while underexplored, contains very large mapped prospects and we look forward to drilling an exploration well, which will most likely be in 2014 as per the licence commitments.

This is deep water exploration and this deal 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]
Paul Connolly
John Dwyer
Fox Davies Capital	Tel: [phone]
Daniel Fox-Davies
Oliver Stansfield
FirstEnergy Capital LLP	Tel: [phone]
Hugh R. Sanderson
David Van Erp
Westhouse Securities (Nominated Advisor) Richard Johnson	Tel: [phone]
Antonio Bossi
College Hill Associates	Tel: [phone]
Nick Elwes
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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