San Leon Energy, a London-based oil and gas firm, is nearing a $185m agreement with US investor Tri-Ri Asset Management that would allow it to assume control over a significant Nigerian pipeline asset.
This deal’s first stage is valued at nearly double the suspension price of San Leon’s shares.
Reports suggest that San Leon, whose shares have been on hold since July awaiting the release of its annual results, might disclose the Tri-Ri investment as early as this week.
https://soundcloud.com/zak-mir-32494497/oisin-fanning-ceo-san-leon-energy?utm_source=clipboard&utm_campaign=wtshare&utm_medium=widget&utm_content=https%253A%252F%252Fsoundcloud.com%252Fzak-mir-32494497%252Foisin-fanning-ceo-san-leon-energy
Oisin Fanning, Chief Executive Officer of San Leon, commented:
“It is no secret that the past few months have been difficult for San Leon, as they have been for many businesses, but it is a testament to the determination and commitment of our team that we have secured one of the largest fundraisings by an AIM oil & gas company in recent years. In addition, and in line with our announcements over the past year, we have aligned San Leon with a strategic funding partner who has been able to commit a greater level of support than our previous proposed lender, through an innovative investment arrangement which includes them becoming a major shareholder of our Company.
Inside banking circles, there’s talk that Tri-Ri’s deal will initially give them about a 10% stake in San Leon. This investment comes at a 30p-per-share rate, which is almost double the suspension rate of the shares.
The sources also hint at Tri-Ri’s intention to eventually own roughly 25% of the company, with further options to increase its stake through new company warrants.
Toscafund Asset Management, which holds a 75% stake in San Leon, reportedly supports this transaction. Industry insiders anticipate that, given these developments, San Leon might be on track for a $1bn valuation.
There’s also speculation about a potential additional listing in Abu Dhabi being in the pipeline for San Leon.
Funds from the Tri-Ri deal will likely be directed towards acquiring a majority stake in ELI, a pipeline designed to manage daily outputs of up to 100,000 barrels of oil.
It’s worth noting that an earlier investment structure with San Leon was abandoned by the firm’s board, as declared in a recent stock exchange announcement.
