San Leon Edges Close To Deal Completion with Midwestern Oil &Gas
San Leon Energy and a Nigerian firm, Midwestern Oil and Gas are at the final stages of their agreement over the acquisition and financing of Mart Resources. Under the terms of agreement, San Leon would assist Midwestern Oil & Gas to finance the C$89.2mln takeover of Mart Resources.
As a result of the transaction, San Leon will be own just less than 10% of the Nigerian oil field that currently produces more than 30,000 barrels per day.
The Toronto based oil firm told investors that funds for the deal have now been received by the lawyer for the acquisition vehicle – 1038821 B.C. Ltd. (Acquireco), though Mart said it expects the funds will be paid into the depositary before the deadline for the deal March 24, 2016. The company agreed last month to support a takeover of Toronto Mart Resources by the Nigerian oil firm, Midwestern Oil and Gas.
MidWestern also agreed in January to acquire all of the issued share capital of Mart by way of a plan of arrangement. Mart shareholders are set to receive 25 Canadian cents per share, valuing Mart at C$89.2mln.
Under the terms of the deal, San Leon will initially receive a 4.05% indirect economic interest in OML 18, which hosts the operating oil fields. Its interest in the project can increase to 9.72%, subject to securing further funds as part of a larger overall deal.
San Leon would also benefit from a minimum of 65% ‘enhanced cash sweep’, which would see expeditious repayment of the debt financing. The company also secured the right to provide oil field services, such as work over and drill rigs, to the operator of OML 18.