??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.

9 October 2023

San Leon Energy plc

("San Leon" or the "Company")

Termination of the proposed transactions with Midwestern

San Leon, the independent oil and gas production, development and exploration company focused on Nigeria, announces the termination of its proposed transactions with Midwestern Oil & Gas Company Limited ("Midwestern") and the Company's further conditional investments in Energy Link Infrastructure (Malta) Limited ("ELI") (together the "Proposed Transactions"). The Proposed Transactions were announced by the Company on 8 July 2022 and set out in an admission document published by the Company on the same date (the "Admission Document"). The Company remains in early-stage discussions with Midwestern regarding a revised transaction in relation to Midwestern Leon Petroleum Limited ("MLPL") and Midwestern's indirect shareholding in ELI.

Termination of the Proposed Transactions and a new strategic direction for San Leon

As previously announced, the board of San Leon (the "Board") has, in recent weeks, been considering the Proposed Transactions and the Board has now concluded that it is no longer in the Company's best interest to proceed with the MLPL Reorganisation Agreement and ELI Reorganisation Agreement (both as defined in the Admission Document). The Company has, with the consent of Midwestern, terminated both these agreements and as a consequence the Proposed Transactions will now not proceed.

The Board's reasons for terminating the Proposed Transactions are as follows: i) the New Eroton Debt Facilities and the Sahara OML 18 Acquisition (both as defined in the Admission Document) continue to be delayed for reasons outside of the Company's control; and ii) the legal challenges in Nigeria to Eroton Exploration & Production Company Limited's ("Eroton") ongoing operation of the Oil Mining License (OML) 18 ("OML 18") in Nigeria, which the Board believe will not be resolved in the short term. Details of these legal challenges were announced by San Leon on 7 March 2023 and 13 March 2023.

In light of the Proposed Transactions being terminated the Company and Midwestern are discussing suitable alternative transaction structures to align the interests of Midwestern, San Leon and Eroton, noting the US$120 million of outstanding loan notes (the "MLPL Loan Notes") due from Midwestern Leon Petroleum Limited to San Leon (the "Potential Transaction"). Although the discussions are at an early stage at this time the Board anticipates that the Potential Transaction may involve swapping a proportion of the MLPL Loan Notes into new assets in MLPL. In addition, San Leon remains interested in acquiring Midwestern's indirect interests in ELI. The Board believe that, due to the amount outstanding on the MLPL Loan Notes, the Potential Transaction, as with the previous agreements with Midwestern, would constitute a reverse takeover under Rule 14 of the AIM Rules for Companies and will therefore be subject, inter alia, to the publication of a new AIM admission document by the Company and the approval of San Leon's shareholders before binding contracts are entered into. At this time there can be no certainty that any agreement will be reached with Midwestern in relation to the Potential Transaction. Should no agreement be reached on the Potential Transaction San Leon will seek the repayment of the outstanding US$120 million of loans from MLPL (which have been guaranteed by Midwestern). A further announcement in this regard will be made in due course.

The Company's ordinary shares of ?0.005 each in the Company (the "Ordinary Shares") are currently suspended from trading on AIM because the Company has not published: i) its audited accounts for the year ended 31 December 2022 (the "2022 Accounts"), as required by Rule 19 of the AIM Rules for Companies; and ii) its unaudited interim results for the six months ended 30 June 2023 (the "2023 Interim Accounts"), as stipulated by Rule 18 of the AIM Rules for Companies.

San Leon remains committed to publishing the 2022 Accounts and the 2023 Interim Accounts as soon as it is able to do so and the Board believes that the investments being made in ELI, and described below, will enable this process to be accelerated. The Board currently expects that, following the publication of the 2022 Accounts and the 2023 Interim Accounts, trading in the Ordinary Shares on AIM will remain suspended until such time as either a new AIM admission document in connection with the Potential Transaction is published or an announcement is released confirming that the Potential Transaction is not being progressed and the Company is no longer contemplating undertaking a reverse takeover.

Discussions with the Company's major shareholders

Over the last couple of months, the Board has reappraised the strategic opportunities for the Company. This exercise has resulted in the Company terminating the Proposed Transactions and entering to discussion with Midwestern on the Potential Transaction. The Board believe that the Company's existing and proposed further investment in ELI has potential to generate significant value for shareholders, as announced on 8 August 2023, but it will only do so once ELI is refinanced. This will be achieved by using the proceeds of an alternative loan facility which, as announced earlier this morning, the Company is putting in place and is now at a very advanced stage.

The Board has engaged with the Company's three largest shareholders, being: i) funds managed by Toscafund Asset Management LLP (75.00 per cent. shareholding in the Company); ii) Midwestern (13.18 per cent. shareholding); and iii) Oisin Fanning, the Company's Chief Executive Officer (2.11 per cent. shareholding). All three shareholders (who together own 90.29 per cent. of the Company's issued shares) have confirmed in writing that they are supportive of the Company's revised strategy, and they support the renegotiation of the transaction with Midwestern, including the termination of the Proposed Transactions and the Company exploring the Potential Transaction with Midwestern.

The Company will make further announcements as required.

Enquiries: