Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information for the purposes of Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the publication of this announcement, this information is now considered to be in the public domain.

2 October 2023

San Leon Energy plc

("San Leon" or the "Company")

Update on Proposed Transactions

Update in relation to Loan from the Company's largest shareholder

Interim results update

San Leon, the independent oil and gas production, development and exploration company focused on Nigeria, provides the following updates in relation to a further extension to the longstop dates for the proposed transactions with Midwestern Oil & Gas Company Limited ("Midwestern") and the Company's further conditional investments in Energy Link Infrastructure (Malta) Limited ("ELI") (together the "Proposed Transactions"), an extension of the loan repayment date of the Company's secured US$5.0 million loan (the "Loan") from funds managed by Toscafund Asset Management LLP ("Toscafund") and the publication of the Company's interims results for the six months ended 30 June 2023.

Update on Proposed Transactions

All longstop dates in relation to the Proposed Transactions have, in agreement with Midwestern and the other relevant parties, now been extended to 31 December 2023. The longstop dates are in relation to the New Eroton Debt Facilities, the Sahara OML 18 Acquisition Agreement, the MLPL Reorganisation Agreement and the ELI Reorganisation Agreement (the "Agreements"). Details of the Proposed Transactions and the Agreements were announced by the Company on 8 July 2022 and set out in an admission document published by the Company on the same day (the "Admission Document"). 

The Company continues discussions with Midwestern on whether a potential revision to the Proposed Transactions can be agreed to allow completion to occur whilst the New Eroton Debt Facilities and the Sahara OML 18 Acquisition continue to be delayed for reasons outside of the Company's control. There can be no guarantee that any such revised terms will be agreed.

Update in relation to loan from the Company's largest shareholder

On 8 August 2023, the Company announced, amongst other matters, that it had entered into the Loan with the Company's largest shareholders, certain funds managed by Toscafund. The Loan carries a coupon of 10 per cent. per annum.  The Loan was originally repayable by no later than 7 September 2023 and on 8 September 2023 was subsequently extended to 30 September 2023 (as announced on 8 September 2023). As part of the Loan, San Leon entered into security arrangements with funds managed by Toscafund that comprise both a debenture issued by the Company as well as assignments and pledges over all of its group companies' loan and equity interests in ELI (the "Security Arrangements").  The Security Arrangements will be released upon full repayment of the Loan. 

To allow San Leon to conclude discussions which are at an advanced stage with a third party in relation to securing an alternative loan facility (as mentioned in previous announcements), which once concluded is anticipated to be used towards, amongst other purposes: the repayment of the Loan; the making of the further investments in ELI; and the satisfaction of the Company's outstanding obligations to its creditors, Toscafund and San Leon have agreed to a further extension of the Loan repayment date to 6 October 2023. All other terms of the Loan remain unchanged. The board of San Leon (the "Board") continues to remain optimistic that a conclusion on an alternative loan facility will be reached in the near term and will provide an update to shareholders and creditors at that time.

Related party transaction

The extension of the repayment date of the Loan issued by funds managed by Toscafund (which own over 75 per cent. of San Leon's issued shares) is classed as a transaction with a related party under the AIM Rules for Companies.  The Board (with the exception of Kolapo Ademola and Joel Price who are also both directors of ELI, the ultimate beneficiary of the Loan), having consulted with the Company's nominated adviser, Allenby Capital Limited, considers that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned. 

San Leon's accounts for the six months ended 30 June 2023 

On 3 July 2023, San Leon announced that it had not published its audited accounts for the year ended 31 December 2022 (the "2022 Accounts") by 30 June 2023, as stipulated by Rule 19 of the AIM Rules for Companies, and accordingly the Ordinary Shares were suspended from trading on AIM pending publication of its 2022 Accounts.

The publication of San Leon's unaudited interim results for the six months ended 30 June 2023 (the "2023 Interim Accounts") is contingent on the finalisation and publication of the 2022 Accounts. While San Leon remains committed to publishing its 2022 Accounts, publication has not occurred before 30 September 2023. Accordingly, San Leon has not been able to publish its 2023 Interim Accounts by 30 September 2023, as stipulated by Rule 18 of the AIM Rules for Companies. Consequently, San Leon's ordinary Shares will remain suspended from trading on AIM pending publication of both its 2022 Accounts and 2023 Interim Accounts.

Unless otherwise defined herein, the capitalised defined terms used in this announcement have the same meaning as those used in the Admission Document.

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