San Leon to Shed All But Two Polish Concessions

UK-listed San Leon Energy, the subject of a takeover bid by China Great United Petroleum, said September 19 it has reached definitive agreements to divest all but two of its remaining onshore Polish exploration licences.

After the disposal, San Leon will retain only the Gdansk West and Szczawno shale gas exploration concessions in Poland, both onshore the Baltic basin.

San Leon has now agreed to sell to Toronto-listed Horizon Petroleum 100% interests in a handful of Polish concessions, Cieszyn, Bielsko-Biala, Prusice and Kotlarka. Horizon will pay US$1mn, less a $0.1mn loan on the assets, for a net cash payment of US$0.9mn. San Leon separately agreed to sell 100% interests in two further oil & gas concessions in Poland known as the Gora and Nowa Sol Concessions to UK-based Gemini Resources for a nominal sum.

San Leon said both disposals represent a loss of some €400,000 over the book value of assets, after adjusting for reduced decommissioning liabilities.

These are not the first divestments by the company in Poland: in late 2016 it sold assets to US-based Palomar Natural Resources for $9mn. It also relinquished several more in September 2016. The company once boasted it was Europe's largest shale gas exploration acreage holder, but has since significantly scaled back, and shifted the focus of its operations to an interest in a small producing field onshore Nigeria.

Mark Smedley