San Leon agrees sale with John McKeown
Oisín Fanning’s oil and gas company to offload most of its Irish offshore assets
Oisín Fanning, founder of San Leon, said the company does not “have the time or energy” to maximise the potential of Island’s Irish exploration licences.
San Leon Energy, the oil and gas company founded by former stockbroker Oisín Fanning, has agreed to offload most of its Irish offshore assets to John McKeon, the veteran exploration investor. San Leon, which is backed by the billionaire currency trader George Soros and the investment company Blackrock, has agreed to sell its Island Oil & Gas subsidiary to Mr McKeon’s Ardilaun Energy for $3 million.
The deal does not include the 4.5 per cent net profit interest (NPI) held by San Leon in the Barryroe field, which is operated by Providence Resources.
San Leon paid more than £13 million for Island 3½ years ago in an all-share deal, although it has since sold off many of the company’s assets.
Mr Fanning said yesterday that San Leon does not “have the time or energy” to maximise the potential of Island’s Irish exploration licences.
“It needs someone with time and energy that we haven’t got to devote to it,” he said. He added that San Leon intends to focus on its assets in countries such as Morocco and Turkey.
Mr Fanning said San Leon is also exploring a sale of some of its other assets, such as its licence interests in Italy, including three exploration licences off the coast of Sicily; and Germany, where it has a licence in Lower Saxony.
It may also sell its interests in Slovakia. “We are talking to people about [selling] all of those,” said Mr Fanning.
West coast exploration
The Island sale includes its exploration licences on the Atlantic margin, in deep water off the west coast. Investors’ enthusiasm for exploration off the west coast dampened earlier this year when Exxon Mobil announced that it would be walking away from the Dunquin prospect, where it is in partnership with Providence, after a disappointing set of drilling results.
The sale announced yesterday also includes Island’s stake in the Seven Heads gas field off the southern coast. San Leon will be issued 20 per cent of the shares in Ardilaun, which will pay $1 million upfront for Island and a further $2 million in 12 months.
Earlier this week, San Leon announced it is to raise £31 million in a share placing, as well as the purchase of a 75 per cent stake in Turkish company Alpay Enerji, which has significant intersts in the Turkish oil and gas industry.
Mr Fanning said its cash-generating production assets were of particular attraction to San Leon, which until now has been heavily focused on exploration.
“By next October, we will be producing a net profit of £2 million a month,” said Mr Fanning. “We wanted to put some P [production] into our E&P activities.”
Mr McKeon did not respond to a request for comment last night.