Placing

RNS Number : 2706Z

San Leon Energy PLC

18 September 2009

 



San Leon Energy Plc

('San Leon' or the 'Company')

£6m Placing and up to $50m agreement with PGS

• Placing of 41,866,666 Placing Shares at 15 pence per Placing Share to raise £6.3 million.

• Placing subscription by, and seismic services agreement entered into with, PGS Ventures AS, a subsidiary of Petroleum Geo-Services ASA, the Oslo-listed geophysical company.

San Leon is pleased to announce that it has conditionally placed 41,866,666 new ordinary shares of EUR 0.05 each par value (the 'Placing Shares') at a price of 15 pence per share (the 'Placing Price'), raising £6.3 million (before expenses) for the Company from a number of institutional and other investors (the 'Placing') through Arbuthnot Securities, Fox-Davies Capital and the Company.

In addition to funds raised from institutional and other investors, San Leon has entered into a seismic services agreement with PGS Ventures AS ('PGS Ventures'), a subsidiary of, Petroleum Geo-Services ASA ('PGS').  PGS is a focused geophysical company which provides a broad range of seismic and reservoir services, including acquisition, processing, interpretation, and field evaluation.  PGS also possesses the world's most extensive multi-client data library. PGS operates on a worldwide basis with headquarters at Lysaker, Norway.  PGS Ventures is the investment arm of PGS, with a remit to provide PGS data and services in return for equities and minority ownership positions in E&P assets (www.pgs.com).  PGS has also agreed to subscribe for 13,333,333 Placing Shares at the Placing Price.  

The funds raised from investors, together with the PGS seismic services agreement, provides San Leon with the capital and support to carry out the Company's exploration and development programme across its portfolio of projects in Morocco, Poland, Italy and the USA.

Under the terms of this agreement, the Company has agreed to provide the PGS group with the right, subject to applicable local tendering, procurement or similar laws and regulations, to provide the San Leon group with all of its seismic acquisition, data processing and interpretation requirements going forwards in all jurisdictions and regions other than onshore Morocco. All data and services are to be provided on demonstrable standard PGS pricing terms, and otherwise on PGS group terms and conditions. Under this agreement, the Company has the obligation to purchase a minimum work volume equating to the subscription of not less than $20 million of ordinary shares by PGS Ventures. The agreement also provides that PGS Ventures will be offered the opportunity to contribute at least 40%, and up to 50%, of the costs of purchase of such data and services, by way of subscription for new ordinary shares in the Company, up to a maximum contribution of $50 million. Of this, the first $10 million of such costs shall be paid by way of a subscription for further ordinary shares at the Placing Price and any further subscriptions in excess of that first $10 million shall be paid by way of a subscription for further ordinary shares at the lower of (i) 15% below the weighted average share price of the Company's ordinary shares as traded over the three month period last ended prior to the date upon which PGS Ventures is to subscribe for the new ordinary shares; (ii) the lowest placing price of any placing of ordinary shares by the Company, closed in the three month period last ended prior to the date upon which PGS Ventures is to subscribe for the new ordinary shares; and (iii) the placing price of any placing of ordinary shares by the Company current, or in progress on the date on which PGS Ventures is to subscribe for the new ordinary shares concerned. In addition, and without prejudice, to the other rights and remedies of PGS Ventures in respect of any breach of this agreement, should the subscription for ordinary shares be less than $20 million by 30 June 2011, the Company will pay PGS the sum of £1 million reduced by £100,000 for each $2 million which has been so contributed by such date, by no later than 10 September 2011. In the event that any subscription for ordinary shares by PGS Ventures would result in an obligation arising for PGS Ventures to make an offer to acquire all of the outstanding shares of San Leon, the Company shall provide PGS Ventures with the opportunity to subscribe instead for a convertible loan note or other such instrument to prevent such an obligation arising. Under the agreement, PGS Ventures also has the right to appoint a non-executive director to the board of the Company. The agreement may be terminated by either party giving notice to the other at any time after the fifth anniversary of the date of the agreement.

The Placing Shares have been conditionally placed with institutional and other investors by Arbuthnot Securities Limited, Fox-Davies Capital Limited and the Company. The Placing Shares will, when issued, rank pari passu with the Company's existing issued ordinary shares, and dealings are expected to commence in the Placing Shares on Wednesday, 23 September 2009 ('Admission'). Following Admission, the Company will have 373,290,447 ordinary shares in issue (fully diluted).

Oisín Fanning, Chairman of San Leon commented

'We are extremely encouraged by the support we have received from existing and new shareholders.  The funds raised through this placing and the technical services agreement will provide San Leon with the sufficient financial and technical backing to continue to develop the Company's exciting portfolio of exploration and development projects.'

18 September 2009

For further information contact:

San Leon Energy Plc                                    Tel: + 353 1291 6292

Oisin Fanning, Chairman

Philip Thompson, Chief Executive Officer

Arbuthnot Securities                                  Tel: [phone]

Nick Tulloch

Andrew Fairclough

Fox Davis Capital                                        Tel: [phone]

Jason Bahnsen

Oliver Stanfield

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.

 

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