Oisín Fanning, the former stockbroker and telecoms entrepreneur turned leader of oil and gas explorer San Leon Energy, has declared that the Africa-centric firm is on the brink of securing a fresh financial backer. This measure comes following the failure of an American financial institution, which had committed $187 million (€171 million) in 2023, to deliver the preliminary funds.
In the last eight weeks, San Leon has secured favourable commercial conditions from two potential financial supporters. The company is nearing the end of its negotiations, expecting to finalise the paperwork with one of these potential supporters in the near term. If the necessary loan documents are completed soon, San Leon anticipates the receipt of funds by the finale of March 2024.
Previously, Tri Ri Asset Management (TRAM), which resides in New York, had committed to a transformative financial agreement in October. The transaction consisted of investment via convertible loans, stakes and warrants in San Leon, which, though situated in Dublin, is listed in the UK.
Despite San Leon’s declaration on November 2nd that $125 million was being transferred by TRAM, constituting the convertible loan portion of the deal, the funds never arrived in the account of the Irish enterprise.
The intention behind this refinancing operation is to enable San Leon to secure majority ownership in Energy Link Infrastructure (Malta), or ELI, which supplies crude oil transport and storage systems within Nigeria’s Niger Delta region, as well as other assets. Moreover, San Leon currently possesses a 10% stake in a significant Nigerian offshore oilfield known as OML 18, a complicated acquisition made in 2016 through a firm named Midwestern Leon Petroleum Ltd (MLPL), based in Mauritius.
San Leon is planning for a section of the profit from the refinancing deal to be invested in the new ELI pipeline along with a floating storage and offloading terminal. The company believes this will substantially increase OML 18’s output and promote the commercialisation of crude oil for other regional producers. In addition, San Leon’s trade creditors, who are owed $25 million, have been putting increasing pressure on the company, forcing it to act quickly and decisively.
The Environment, Climate and Communications Department is a prominent creditor involved in a $7.7 million settlement with San Leon, in relation to the decommissioning liabilities of the Seven Heads gasfield located off Cork’s coast. A decade prior, San Leon had sold the gasfield’s company, which ceased commercial operation in 2020, yet it continued to cover the decommissioning liabilities. San Leon has intimated that it will seek reimbursement from its former subsidiary, Island (Seven Heads) Ltd.
Since July, trading of San Leon’s shares has halted due to the unavailability of their 2022 records. Mr Fanning, expressing optimism, stated that the struggles of the past year would soon be over. He continued to say that the forthcoming refinancing would position them as ELI’s majority shareholders, a move that aligns with their long-standing strategy. Additionally, Mr Fanning remarked that the proposed ELI floating terminal will revolutionise not only OML 18, but also the entire regional industry.
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