Proposed Acquisition

RNS Number : 4091N

San Leon Energy PLC

17 February 2009

 



San Leon Energy Plc

('San Leon' or 'the Group') 

Proposed Acquisition of Gold Point Energy

Transaction Highlights:

• Proposed acquisition of TSX Venture Exchange listed Gold Point Energy ('Gold Point' or 'GPE')

• Multi asset portfolio will enhance San Leon's current portfolio - potential high value development and exploration assets in Poland, and the USA
  
• All share payment: 1 San Leon share issued at 16.5 GBp per share for 6 Gold Point shares, valuing Gold Point at $1.5m
  

San Leon Energy, the AiM listed international oil and gas company with assets in Morocco, the Netherlands and the USA is very pleased to announce that it has entered into an agreement with the Board of Gold Point Energy to acquire the entire share capital of Gold Point.

Rationale for the transaction:

Gold Point's portfolio will add significant value to San Leon, mixing potentially high impact exploration in Poland, with development assets in both Poland and the United States

• Poland: 50% of Block 106, Szczecinek northwest Poland, operated by Gas Plus. Targeting the previously discovered Czarne gas field, in addition to 10 million barrels and 15 BCF of potential oil and gas reserves. Estimated recoverable P50 reserves at the Czarne field 12.4 BCF.  The field tested 10.1 MMCFGD from the Rotleigend sandstone at a depth of 3,100m (10,200 ft), but remains to be produced.

• United States: 480 acres, Hettinger County, North Dakota. Field rehabilitation aimed at targeting stranded reserves. The Urlacher #1-24 well previously produced 227,000 barrels of 40° API oil, 309,000 MCF of gas. 2-D seismic reinterpretation and shooting new 3-D seismic surveys are designed to further evaluate the field and design a drilling programme.

In addition to the value enhancing physical assets, San Leon's management team will also be greatly strengthened through the acquisition of a team of talented petroleum geologists, led by Dr John Buggenhagen.

Transaction terms

It is proposed that San Leon Energy shall complete the Transaction such that shareholders of GPE shall receive one San Leon Share in exchange for six GPE shares.  Payment will be made in two tranches. The first will be made when Gold Point shareholders accept the offer. The second will be made 12 months after. Both payments are subject to a lock in agreement of 12 months following the payment whereby shareholders will not be able to trade their shares. 

All, or a portion of these shares may be cancelled in the event of a material breach of any representations, warranties or covenants of GPE under the Agreement. It is expected that the Transaction will complete in April, 2009. Upon completion of the Transaction, the GPE shares will be de-listed from TSXV and the SLE Shares will be listed for trading on AIM.

GPE has agreed that it will make a proposal to those shareholders and employees owning warrants and options such that these securities will be cancelled prior to closing of the Transaction. The directors and officers of GPE have agreed to vote their shares , which in aggregate represent 6% of GPE, in favour of the Transaction and recommend the offer to shareholders.  A fee equal to 4% of the value of the Transaction, payable in shares, will be paid to Green Corporate Finance Limited upon completion of the Transaction.

Phil Thompson, CEO of San Leon Energy Plc, commented:

'We are very pleased with this success. It is in keeping with our overall strategy to develop a balanced portfolio of exploitable assets that provide value to our shareholders. 

With the clear need for Poland to develop domestic energy resources, we are confident that there is a terrific opportunity to deliver significant value. 

We are looking forward to developing the Szczecinek Concession block 106 with Gas Plus as our partners by year end, creating what could be a highly valuable project. It is an exciting time for us all.'

17 February 2008

For further information, please contact:

San Leon Energy Plc
Oisin Fanning, Chairman	Tel: + 353 1291 6292
Phil Thompson, Chief Executive Officer	www.sanleonenergy.com
Daniel Stewart & Co. Plc
Graham Webster/Stewart Dick	Tel: [phone]
	www.danielstewart.co.uk
College Hill Associates
Paddy Blewer/Nick Elwes	Tel: [phone]
	www.collegehill.com

In accordance with the guidelines of the AIM Market of the London Stock Exchange, Phil Thompson, M.Sc. in Geophysics and B.Sc. in Geophysics, Chief Executive Officer of San Leon Energy Plc, who has been involved in the Oil & Gas industry for over 25 years, is the qualified person that has reviewed the technical information in this press release.

 

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