The company has signed and completed sales agreements for its interests in two Polish onshore assets, principally the Rawicz and Siekierki fields in the Permian Basin, to Palomar Natural Resources.
San Leon has sold its 35 per cent. interest in the Rawicz gas field for a cash consideration of US$9 million, and the release of certain San Leon liabilities. These liabilities include loans which were advanced by Palomar to the Company as a temporary carry of the drilling and testing costs of the Rawicz-12 and Rawicz-15 wells, and amount to approximately US$3.0 million.
The Company has sold its 35%. interest in the Poznan assets (largely the Siekierki field) for a consideration of €1 plus a 10%. Net profit interest (NPI) in the Poznan assets. The NPI removes any further cost exposure to San Leon, while providing an interest in any future profits made by Palomar on the Poznan assets.
The first US$2.2 million will be payable on closing, the next US$2.3 million by 30 November 2016 and the remaining US$4.5 million is due to paid to San Leon on or before 01 October 2017. An interest charge of LIBOR plus 5% will be applied to any sum not paid by February 1 2017.
The current book value of the assets being disposed of is approximately €12.1 million. The losses attributable to the assets in the last financial year were €0.
Chief Executive Officer, Oisin Fanning, commented:
"The sale of certain Polish assets is a natural further step in focusing the Company's financial and management resources on the world-class OML 18 asset in Nigeria, as per the Company's stated strategy. The sale price achieved is very similar to the carrying value of those assets in the latest audited financial statement, after the liabilities release is applied, and is considered by the Board to be full and fair. It also reduces overheads costs through a downsizing of the Polish office, and no further licence fees or overheads on the assets sold."
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