San Leon Raises Capital to Commercialise Portfolio

San Leon Energy, the AIM-traded oil and gas exploration and development company, has taken a step towards commercialising and developing its current portfolio by raising gross proceeds of approx. £59.6 million through a conditional placing of Ordinary shares.

The funds will be directed to the work programme targeting high impact shale gas and conventional plays in Poland and Morocco as well as a programme of low cost, early production Polish oil prospects that have the potential to provide cash flow for future exploration and appraisal programmes.

The Company stated that it has identified a fourteen to seventeen well programme targeting both unconventional and conventional leads and prospects in Poland and Morocco.

Three of these wells, which are targeting the Baltic Basin shale horizons in Poland, are already funded by Talisman Energy as part of the Company's previously announced farm-out transaction. Under this farm-out, Talisman Energy has the option to increase its interest in the Gdansk W, Braniewo S and Szczawno licences by drilling a further three wells in the Baltic Basin.

Partial details of how the Company intends to use the net proceeds of the shale placing include:

Poland:
(i) Funding of the Company's share of the seismic programme with Talisman Energy over the Baltic Basin acreage in preparation for a three to six shale gas well programme.
(ii) Drilling six lower-risk exploration wells in the Permian basin and Nida Trough targeting short-term oil production (under the Nida, Szczecinek and Nowa Sol licences).
(iii) Drilling three exploration wells to prove shale gas presence and prospectivity in the carboniferous horizon (under the Wschowa and Gora licences).

Morocco:
(i) Drilling two exploration wells in on-shore Morocco targeting conventional oil and gas plays (under the Zag and Tarfaya licences).
(ii) Testing and proving concept of the in-situ oil shale project in Morocco (under the Tarfaya oil shale agreement).

Oisín Fanning, Executive Chairman of San Leon Energy, commented:

'We are delighted with the high demand for this placing which shows strong support from both existing shareholders and new institutional investors in Europe and North America. Over the last two years the Company has built a highly attractive portfolio of assets across a number of exciting hydrocarbon regions. Our focus now turns to commercialising and developing these assets. The funds raised will support this stage of our growth strategy as we fast-track the drilling of up to 17 wells in the next 18 months in Poland and Morocco. This will be the busiest and most significant growth stage for the Company to date; one that will provide meaningful and high impact news flow over the next 18 months.'

Source: San Leon Energy