Update on Oza field, Nigeria

RNS Number : 9326Z

San Leon Energy PLC

20 September 2022

 

20 September 2022

San Leon Energy plc

("San Leon")

Update on Oza field, Nigeria

San Leon, the independent oil and gas production, development and exploration company focused on Nigeria, notes the announcement made on 19 September 2022 by Decklar Resources Inc. ("Decklar") in Canada.  San Leon has a 11% shareholding in Decklar Petroleum Limited ("DPL"), the local subsidiary of Decklar operating in Nigeria, and has also made a US$5.5 million loan to DPL, via 10% per annum unsecured subordinated loan notes.

Part of the text of Decklar's announcement is set out below:

"Calgary, Alberta -- Decklar Resources Inc. (TSX-V: DKL) (OTCQX: DLKRF) (FSE: A1U1) (the "Company" or "Decklar")

is pleased to provide an update on operational activities relating to the transportation and export of crude oil produced from the Oza Oil Field in Nigeria.

Decklar and its co-venturer Millenium Oil & Gas Company Limited ("Millenium") are pleased to announce that the 7,800 barrels of crude oil ("bbls") previously delivered to the Umugini Pipeline Infrastructure Limited crude handling facilities has now been delivered to the Forcados crude oil export terminal. The 7,800 bbls are ready for export pending the completion of certain repairs to the offshore loading system. In the meantime, an additional 30,000 bbls has been produced from the Oza Oil Field and is currently being stored in tanks at the Oza-1 wellsite. These 30,000 bbls will be the initial barrels transported to the new export facilities, as detailed below. Once part of this crude has been shipped from the Oza Oil Field tanks, the Oza-1 well will be brought back onto production, with the ultimate goal being the provision of a stable, ongoing supply of crude oil into new alternative export facilities.

Decklar and Millenium are also pleased to announce that an agreement has also been reached to transport and sell Oza Oil Field crude oil to a company that owns and operates a small crude oil refinery in Edo State, Nigeria. The agreement provides for an initial sale of 10,000 bbls. The parties are also in discussions to increase the sale quantity to 30,000 bbls and to possibly agree a minimum monthly quantity of barrels of Oza Oil Field crude to be sold to the oil refinery. It is anticipated that all required government permits will be finalized and in place in the next 3-4 weeks.

Separately, agreements have been executed to truck crude oil from the Oza Oil Field to a 45,000 barrel tank farm located in Akwete. The short-term goal is to transport approximately 1,100 barrels of oil per day from the Oza Oil Field to the storage tanks at Akwete. Once the volumes at the Akwete oil tank exceed 15,000 barrels, barges will load and transport the crude to an offshore floating storage and offloading unit ("FSO").

The barging to an FSO will provide Decklar and Millenium with the ability to produce and transport larger and more stable volumes of crude oil from the Oza Oil Field and avoid the use of pipelines in areas that continue to have problems with availability, delays and losses. While the trucking and barging of crude oil involves more complex logistics, it is expected to be more reliable and cost effective than trucking and pipelines. It is anticipated that the required government permits can be finalized and in place for oil to start being transported to the Akwete oil storage tank in the next four to five weeks. All efforts are being made to expedite and complete the necessary arrangements and obtain the required approvals."

Enquiries:

San Leon Energy plc	[phone]
Oisin Fanning, Chief Executive Julian Tedder, Chief Financial Officer
Allenby Capital Limited (Nominated adviser and joint broker to San Leon)	[phone]
Nick Naylor Alex Brearley Vivek Bhardwaj
Panmure Gordon & Co (Joint broker to San Leon)	[phone]
James Sinclair-Ford
Tavistock (Financial Public Relations)	[phone]
Nick Elwes Simon Hudson
Plunkett Public Relations	[phone]
Sharon Plunkett

 

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