San Leon Energy updates on Polish asset sale

San Leon Energy said it 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% interest in the Rawicz gas field for a cash consideration of $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 $3.0 million.

The Company has sold its 35 per cent. 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 $2.2m will be payable on closing, the next US$2.3 million by 30 November 2016 and the remaining $4.5m 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.

At 9:07am: (LON:SLE) San Leon Energy PLC share price was +0.01p at 43.63p