Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information for the purposes of Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the publication of this announcement, this information is now considered to be in the public domain.

1 December 2022

San Leon Energy plc

("San Leon" or the "Company")

Further update on the proposed transactions with Midwestern and ELI

San Leon, the independent oil and gas production, development and exploration company focused on Nigeria, announces a further update in relation to the Proposed MLPL Reorganisation, the ELI Reorganisation and the Further ELI Investments, details of which were set out in the Company's AIM Admission Document published on 8 July 2022 (the "Admission Document").

Proposed Transactions update

Further to the announcement made on 1 November 2022, the process of finalising the New Eroton Debt Facilities has continued during November 2022, but due to the complex nature and number of parties involved, further additional time is still needed to finalise the loan agreements and ancillary documentation.  Consequently, the timeline for the satisfaction of the condition relating to the New Eroton Debt Facilities being entered into, which had already previously been extended to 30 November 2022, has now been extended to 31 December 2022 by agreement between the Company and Midwestern.

In addition to the requirement to enter into the New Eroton Debt Facilities, the MLPL Reorganisation Agreement required the Sahara OML 18 Acquisition Agreement (as defined in the Admission Document) to be entered into by all parties by 30 September 2022, which was previously extended to 30 November 2022. The Sahara OML 18 Acquisition Agreement will not be entered into until after the New Eroton Debt Facilities have been entered into and the funds to allow the Eroton OML 18 Transactions to proceed are available, and therefore this date has now been further extended to 31 December 2022 by agreement with Midwestern, in line with the extension agreed in relation to the New Eroton Debt Facilities.

For the reasons outlined above, it is now apparent to the Board of San Leon that the Proposed Transactions are unlikely to complete in the final quarter of 2022 but are instead more likely to complete during the first quarter of 2023.

The longstop for completion of the MLPL Reorganisation Agreement has therefore been extended to 31 March 2023.  In addition, the deadline for the ELI Reorganisation, which is conditional (amongst other things) upon completion of the MLPL Reorganisation, has also been extended to 31 March 2023.

San Leon US$50 million loan facility

As announced by the Company on 1 November 2022, whilst the Company has a loan facility available to it of US$50.0 million from MM Capital Holding Limited for the purposes of funding its working capital requirements and financing the Further ELI Investments (as set out in the Admission Document), the Company has been discussing alternative financing with a new lender on terms that are better aligned with the Company's overall strategic and financing objectives. During November 2022 good progress has been made on agreeing full loan documentation in respect of this alternative financing facility which is expected to be concluded by mid-December 2022 and drawdown of the funds will occur immediately thereafter.  The drawdown of funds will enable the Company to pay its outstanding creditors (details of which were set out in the Company's interim results announcement on 30 September 2022) and fund the Further ELI Investments (details of which are set out in the Admission Document).

Oisin Fanning, CEO of San Leon, commented: 

"Against a backdrop of challenging macro-economic conditions and working with multiple different entities to conclude the arrangements described in our Admission Document, I am pleased that considerable progress has been made on a number of fronts. We continue to move closer to finalising the Proposed Transactions, including alternative financing facilities, which, when completed, will be truly transformational for the Company and will deliver value to our shareholders. 

"The longer timetable than originally anticipated is of course frustrating. However, all parties are working hard and I look forward to updating shareholders in the coming weeks."

Unless otherwise defined herein, the capitalised defined terms used in this announcement have the same meaning as those used in the Admission Document.

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