San Leon Energy has announced plans to raise not less than $200 million via a share placing priced at a significant premium, so as to fund the procurement of an indirect interest in OML 18 oilfield in Nigeria.

OML 18 is an onshore producing oilfield located in the Southern Delta region. Formerly operated by Shell, the field covers an area of 1,035 km². The company at the moment has 61.8 million shares in issue. This represents about 75.5% of San Leon’s issued share capital as it plans to raise the money from 105.0 pence per share placing.

The OML 18 deal, according to the Board, is a transformational transaction for San Leon which anticipates to generate significant revenues from the field. San Leon had initially signed an agreement in January to acquire a 9.72% indirect economic interest in OML 18, which will be beneficial as it plans to have a significant percentage of its oil hedged at $95 per barrel (more than a double of the market price for Brent crude) till December 2017.

Oil production from the field is currently at 50,000 bopd compared to the 10,000 bpd it produces in March 2015, while Gas production is at 50 Mmscf/d. The objective is to boost output to a surplus of 100,000 bopd which San Leon sees as a world-class onshore producing asset.

“I am pleased to confirm that production in OML 18 has continued to be strong and this is a function of the operational controls and expertise that have been implemented by Eroton, the operator of the asset, as well as the implementation of the first stages of the field redevelopment plan,” Oisin Fanning (photo), Executive Chairman of San Leon told Energy Voice.
 

Anita Fatunji