San Leon Sees Gas up, Oil down in Nigeria

Nigeria-focused producer San Leon reported a $20.3mn loss from continuing operations for the first half of 2020, compared with $6.8mn lost in the first half of 2019. But it nevertheless returned $35.3mn to shareholders during the first half of 2020 delivering on the company's commitment, it said September 25. It has been receiving loan repayments exceeding that amount.

Drilling contractor Eroton completed its three well drilling programme in early 2020, with the final completion and flow of these wells impacted by Covid-19. The recent lower oil price has led Eroton to improve capital discipline and the prudent deferral of the next drilling campaign, now expected to commence towards the end of 2021, San Leon said.

The amount of oil delivered to Bonny terminal for sales was about 25,200 barrels/day, down from 32,000 b/d in H1 2019, and continues to be affected by combined losses and downtime of about 32%. The 2020 figure was also affected by Opec+ quota restrictions.

Gas sales however averaged 39.1mn ft³/d after downtime, compared with 34.3mn ft³/d in H1 2019. Production downtime of 15% in H1 2020 was caused by third party terminal and gathering system issues. However it said "such issues in the third-party export system are expected to be substantially resolved by the implementation of the new ACOES for the purpose of transporting, storing and evacuating crude oil from OML 18 export pipeline.”

CEO and 24% shareholder Oisin Fanning said the company's position and outlook remains strong: “Whilst the world and the industry has been through turbulent times, we have taken advantage of the opportunities presented by this as well as utilising our cash position to further build our portfolio in Nigeria in line with our strategy.... Our strong position is expected to continue in the year ahead as we receive further loan note payments and deliver upon our strategy."