Arbitration Award and Appeal

RNS Number : 1674O

San Leon Energy PLC

26 May 2015

 

26 May 2015

San Leon Energy PLC

("San Leon" or "the Company")

Arbitration Award and Appeal

San Leon Energy plc ("the Company" or "San Leon"), the AIM listed company focused on oil and gas exploration in Europe and North Africa, provides an update on the proceedings in the International Court of Arbitration of the International Chamber of Commerce, regarding the assets of Energia Zachód Sp. z o.o.("EZ").

As announced on 11 April 2013, the Company received notice from the Secretariat of the International Court of Arbitration of the International Chamber of Commerce ('ICC') confirming the submission of a Request for Arbitration ("Request") by Avobone N.V. and Avobone Poland B.V. (together, "Avobone") in relation to the purchase by Aurelian Oil & Gas, San Leon's subsidiary, of Avobone's 10% shares and loans in Energia Zachód Sp. z o.o. - the titleholder of the Siekierki asset.

At the time San Leon reviewed the Request with counsel and believed the claims to be substantially without merit.  San Leon contested these claims robustly at the hearing of the Court of Arbitration and believed it had a material advantage in the case.

The findings of the Court of Arbitration were received by the Company on Saturday 23rd May 2015, and provide for a total payment by Aurelian Oil & Gas (a subsidiary of San Leon plc) of approximately £13 million including costs.  Two-thirds of the main award relates to the repayment of a loan provided by Avobone to Aurelian.  In Aurelian's view, this loan was a standard industry-practice mechanism that was used to fund Avobone's share of the drilling and other field-related costs in a tax-efficient manner, and should only have been repayable had Avobone exited after the field had generated sufficient cashflow to repay the loan.  As of the timing of Avobone's exit in early 2013, the field had yet to generate cashflow.

Following consultation with counsel, the Company remains convinced that Avobone's case is substantially without merit, and that the findings of the Court of Arbitration constitute a "serious procedural irregularity", as set forth by the UK Arbitration Act 1996 for challenging an arbitral award, and therefore provides grounds for appeal. The Company is thus filing an immediate appeal with the UK Commercial Court and will defend its position vigorously.  The Company understands that such an appeal would likely take at least nine months.

The Company will provide a further update in due course.

For further information contact:

San Leon Energy plc  Oisin Fanning, Executive Chairman	[phone]
finnCap Ltd  Corporate Finance Matt Goode Christopher Raggett Corporate Broking Joanna Weaving	[phone]
Brandon Hill Capital Oliver Stansfield Jonathan Evans	[phone]
Macquarie Capital (Europe) Limited Jon Fitzpatrick Nicholas Harland	[phone]
Westhouse Securities Ltd Nominated Adviser Richard Johnson Antonio Bossi	[phone]
Vigo Communications Financial Public Relations Chris McMahon Alexandra Roper	[phone]
Plunkett Public Relations Sharon Plunkett	[phone]

 www.sanleonenergy.com 

 

END

 

 

MSCKMGZKMKFGKZZ