San Leon Energy PLC an Oil and Gas firm has confirmed that Eroton, which operates the OML 18 project onshore Nigeria, in which it holds a 9.7 percent interest, has received USD7.0 million from the Nigerian National Petroleum Corporation, NNPC.
San Leon said the delay in payment had been having two impacts. The first was contributing to work programme delays, such as well workovers and the drilling of new wells, impacting the cash generating by Eroton.
The second effect was delaying the filling of the debt service reserve account attached to Eroton’s existing reserve-based lending facility, through three quarterly repayments. This is one of the conditions that must be met before lenders will allow the distribution of dividends to Eroton’s shareholders such as San Leon.
“NNPC has been paying operational expense and capital expenditure contributions throughout this year towards 2017 costs on OML 18. 2015 and 2016 were difficult years for the oil and gas industry and the receipt of this payment for arrears related to this period is a significant and welcome development which increases confidence for international independent oil and gas companies investing in Nigeria. For OML 18, this is an important step towards boosting production and targeting the beginning of dividend distributions to its shareholders by Eroton. We look forward to updating the market on further arrears payments,” said San Leon Chief Executive Officer Oisin Fanning.