Iraqi Joint Venture

RNS Number : 1550F

San Leon Energy PLC

07 January 2010

 



 San Leon Energy Plc

("San Leon" or the "Company")

Joint Venture Agreement with Al Meinaa Oil Services of Iraq

San Leon is delighted to announce that it has entered into a joint venture with Al Meinaa Oil Services Limited ("Al Meinaa") for the reciprocal referral and joint evaluation of Oil and Gas projects in the Republic of Iraq (the "Joint Venture").

Al Meinaa is based in Baghdad, Iraq and was established in 2003 to work with international resources and engineering companies and rapidly expanded into the area of reservoir modelling and geological and geophysical studies, providing its services as a local partner to international companies. It has compiled information on numerous fields around Iraq, including the Ajeel, West Qurnah, Mansouria, Akkas and Bani Hassan fields. In February 2009, Al Meinaa, in a joint venture with Petronor Group, signed a 40 year lease for a large land site in Basrah, with South Oil Company for the development of an oil and gas supply base. Its management consists of senior Iraqi engineers. More information is available on their website www.almeinaa-energyresources.com.

Under the terms of the Joint Venture, once a potential project is identified by one party, the other party has a right of first refusal to evaluate that project. If such party wishes to review the project further, it shall have a 60 day period of exclusivity to do so, following which the parties shall act in good faith to agree the terms of their joint participation in the project and enter into a shareholders' agreement to further govern that project (and any further projects they agree to jointly participate in) (the "SHA"). The other party has no obligation to review or evaluate any particular project and in those circumstances, or if the parties are unable to agree the terms of their joint participation in a project, the introducing party is entitled to continue with the project without the involvement of the other party (which itself shall be prohibited from participating in the relevant project for a 2 year period).

Following agreement of the parties' joint participation in a project and the execution of the SHA referred to above, San Leon has agreed to issue to Al Meinaa warrants to subscribe for 10 million ordinary shares in San Leon at a price of 22 pence per share. In addition, following the first execution of a production sharing agreement or long term service agreement, San Leon has agreed to issue to Al Meinaa warrants to subscribe for 10 million ordinary shares in San Leon at a price of 22 pence per share. Following exercise of these warrants, Al Meinaa shall not sell its shares for a period of one year. Thereafter any sales shall be conducted through the Company's broker for the time being.

Oisín Fanning, Chairman of San Leon commented

"Iraq represents an incredibly exciting opportunity for San Leon as the country's potential is well documented. With this in mind Iraq has been a region that we have been looking to enter for some time.  

As such we are delighted that we have been able to secure this exclusive partnership with such an excellent local resource in Al Meinaa. This partnership will help provide access to and evaluation of, the suitable opportunities available to us in Iraq.  

This partnership is part of a carefully managed strategy to access this market and will enable us to bring our expertise and seismic resource to bear in conjunction with Al Meinaa's local expertise.  

We look forward to working with them and maximising the opportunities available to both parties."

7 January 2010

For further information contact:

San Leon Energy Plc                                                     Tel: + 353 1291 6292

Oisin Fanning, Chairman

Philip Thompson, Chief Executive Officer

Almeinaa                                                                     Tel: + 964 1 5433167 

Akram Akrawi, CEO

Arbuthnot Securities                                                    Tel: [phone]

Nick Tulloch

Andrew Fairclough

College Hill Associates                                                  Tel: [phone]

Nick Elwes

Qualified person

Philip Thompson has over twenty five years experience in the oil & gas industry. He has an M.Sc. in Geophysics from Southern Methodist University and a B.Sc. in Geophysics from Texas A&M University.

Information on Iraq: 

As reported by The Oil Exploration Company (OEC-Iraq) which is the national state company responsible for all oil and gas exploration activities in Iraq, and is one of the petroleum service companies of the Iraqi Ministry of Oil;  

"Petroleum exploration activities in Iraq, which started in 1902, have led to the discovery of (64) oil fields and (9) gas fields with a total proven reserves of some 115 billion barrels of oil and 3080 BCM of gas, while in the mean time 543 structures and structural anomalies have been identified which contain some 214 billion barrels of possible oil reserves and 9250 BCM of potential gas reserves."  www.iraqioec.com

 

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