San Leon, the independent oil and gas production, development and exploration company focused on Nigeria, notes the announcement made on 19 January 2023 by Decklar Resources in Canada. San Leon has a 11% shareholding in Decklar Petroleum Limited ('DPL'), the local subsidiary of Decklar operating in Nigeria, and has also made a US$5.5 million loan to DPL, via 10% per annum unsecured subordinated loan notes.
Further to the announcement made by the Company on 20 December 2022, San Leon remains in advanced negotiations in respect of the proposed sale of the Company's non-core investments in DPL, although the completion of this proposed sale will be subject to the purchaser finalising its own funding arrangements.
Part of the text of Decklar's announcement is set out below:
Decklar Resources and its co-venturer Millenium are pleased to provide updates regarding oil production and delivery operations at the Oza Oil Field in Nigeria.
- Decklar and its co-venturer Millenium Oil & Gas Companyhave received the first payment for the sale of crude oil from the Oza Oil Field since recommencement of operations.
- Decklar and Millenium have now increased production from the Oza Oil Field to a total rate of approx. 1,300 barrels of oil per day ('bopd') following the restart of production at approx. 900 bopd from the Oza-1 well and new production at approx. 400 bopd following minor repairs to the Oza-4 well.
- Trucking of oil has continued from the Oza Field to the Edo Refinery and Petrochemicals Company Limited ('ERPC') in Edo State, Nigeria.
- Decklar and Millenium have issued another invoice for delivery of 5,000 barrels of crude oil to ERPC under the recently signed 30,000 bbls crude sale agreement., and initial payment for previous deliveries totaling 10,000 bbls has now been received.
Restart of Production from the Oza-4 Well
Decklar and Millenium have recommenced production from the Oza Oil Field at a total production rate of approx. 1,300 bopd. The Oza-1 well is currently producing approx. 900 bopd of 22 API crude oil on a 20/64 inch choke with wellhead pressure of 400 psi and 2.5% BS&W. Following successful minor repairs, the Oza-4 well has been opened and restarted with current production averaging approx. 400 bopd on a 24/64 inch choke at wellhead pressure of 1,300 psi with 0.01% BS&W.
Trucking of Crude Oil to Edo Refinery
Trucking of oil from the Oza Field is ongoing to the ERPC facility in Edo State, Nigeria. Ten trucks are currently in operation and are capable of delivering approximately 2,500 bbls every four days. Additional trucks are expected to be contracted over the next few weeks to increase delivery capacity.
Receipt of Funds for First Oil Sale
Decklar and Millenium have received payment on the first invoice for delivered crude under the 10,000 bbls sale agreement with ERPC. The Company has now issued an invoice for delivery of the first 5,000 bbls as part of the 30,000 bbl sale agreement with ERPC with payment expected in approx. three weeks. With continued production and delivery of crude oil it is expected that regular billing and receipts of sales proceeds will occur.
Source: San Leon Energy