San Leon Settles Polish Claims

San Leon is to pay Avobone €23.3mn ($25.7mn) plus interest in settlement of a number of disputes over payments that Avobone made to San Leon or its subsidiaries in Poland, including Aurelian Oil & Gas, Energia Zachod Holdings and AOG Finance.

Avobone successfully sought the return of the money through the International Court of Arbitration of the International Chamber of Commerce, which San Leon unsuccessfully appealed in the UK Commercial Court in October 2015. The following February, announcing the defeat, it said it was taking further legal advice.

San Leon is to pay the debt in instalments, the last being December 30, 2017. Interest will accrue at a rate of 5%/yr until paid.

The provision made in the 2015 audited accounts for the Avobone dispute was about €20.6mn but the sum has gone up owing to interest, exchange rate fluctuations, and further legal costs, San Leon said in a London Stock Exchange announcement.

San Leon said it was confident that this settlement will not affect the previously-announced capital distribution policy, whereby 50% of free cash flow from San Leon's interest in the OML 18 asset in Nigeria will be returned to shareholders via either share buybacks or dividends for five years.

William Powell