Ireland-based oil and gas company San Leon Energy has signed and completed sales agreements with Palomar Natural Resources for its interests in two Polish onshore assets located in the Rawicz and Siekierki fields of Permian Basin.
San Leon Energy principally focuses on Europe and Africa and sold its 35% interest of Rawicz gas field against a cash consideration of $9m. The deal also includes the release of certain San Leon liabilities.
These liabilities comprise a $3m loan advanced by Palomar to San Leon to carry out drilling and testing of the Rawicz-12 and Rawicz-15 wells.
San Leon also had a 35% interest in the Poznan assets (largely the Siekierki field), which it sold for €1m with a 10% net profit interest in the Poznan assets.
The net profit interest eliminates further cost exposure to San Leon, while providing an interest in any future profits made by Palomar on the Poznan assets.
Palomar needs to pay the first $2.2m upon deal-closure, the next $2.3m by 30 November and the remaining $4.5m is to be paid before 1 October 2017.
An interest charge of LIBOR with 5% will be applied to any sum not paid by 1 February 2017.
San Leon CEO Oisin Fanning said: “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.”