San Leon launches review of corporate governance

SAN Leon Energy is launching a review of its corporate governance procedures after the late filing resulted in its shares being suspended.

The oil and gas explorer, run by former Smart Telecom chief executive Oisin Fanning, said it is also looking to find a new independent non-executive director.

The company is looking to shore up its financial footing as it seeks to meet payments due on foot of a dispute with former partner Avobone.

It is awaiting payments from its stake in a Nigerian oil field — taken as part of a deal made last year, which was described by the company as transformational.

The project operator has run into difficulties making the payments.

San Leon has just under €1m in the bank and has to pay Avobone €8m by next month and a further €6,694,840 by November.

In San Leon’s recently published annual report, its auditors KPMG said there were “material uncertainties, which may cast doubt” over San Leon’s ability to continue in business. In a statement this week, the company said it “has well established loan relationships with various parties in addition to committed financing facilities in place, which may be required to help fulfil the Group’s immediate cash flow requirement”.

“The directors have assumed that additional loan facilities of €12m will be obtained in October 2017 and a further €7m will be obtained in November 2017 to meet the group’s payment commitments,” the company said.

Meanwhile, a formal offer from a Chinese company that expressed an interest in buying San Leon has not materialised.

San Leon had said the company, China Great United, had expected to be in a position to make a formal offer within 45 days at an indicative price of 67p-76p per share.

That time period has now passed and San Leon shares are currently trading around 20p.

“San Leon anticipates an update from China Great United in the near-term and will update shareholders in due course,” the company added.