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Decklar Resources Inc. Announces Closing of Funding Transaction With San Leon Energy

In This Article:

  • Decklar Petroleum and San Leon have agreed to new terms on financing arrangements whereby San Leon will advance US$4,750,000 immediately and an additional US$2,000,000 by April 30, 2022 (or San Leon will accept a pro rata reduction in its shareholding in Decklar Petroleum).

  • Terms of previously announced agreements between Decklar Petroleum and San Leon have been modified in order to complete the transaction.

  • The Option Agreement that would have entitled San Leon to additional participation in the Oza Oil Field and additional ownership in Decklar Petroleum has been terminated.

  • San Leon will be involved in planning and location of the first new well to be drilled on the Oza Oil Field.

CALGARY, Alberta, Jan. 27, 2022 (GLOBE NEWSWIRE) -- Decklar Resources Inc. (TSX-V: DKL) (OTCQX: DLKRF) (FSE: A1U1) (the “Company” or “Decklar”) is pleased to announce the closing of a funding agreement with San Leon Energy Plc (“San Leon”) whereby the previously announced Subscription Agreement will be completed for gross proceeds of US$7,500,000 (of which US$750,000 was previously paid as a refundable deposit) with US$4,750,000 paid immediately and US$2,000,000 to be paid by April 30, 2022.

As detailed below, in 2020, the Company announced that San Leon had conditionally agreed to advance US$7,500,000 by way of a loan to Decklar’s wholly-owned subsidiary, Decklar Petroleum Limited (“Decklar Petroleum”). San Leon also announced that it was subscribing for a 15% equity interest in Decklar Petroleum in order to participate in the Oza Oil Field in Nigeria. San Leon advanced an initial deposit of US$750,000 at the time of the agreement, with US$6,750,000 of San Leon’s proposed loan remaining in escrow and to be released upon satisfaction (or waiver) of certain conditions precedent. Delays were experienced in concluding conditions precedent to the San Leon transaction, and Decklar proceeded to complete the re-entry and testing of the Oza-1 well. Based upon the Oza-1 well test, which indicated positive oil results from two zones and gas in a third zone, San Leon has agreed to advance the additional funds and to proceed with its investment in Decklar Petroleum. Decklar has agreed to modified terms to proceed with the arrangement with San Leon and to involve San Leon in future development planning.

Accordingly, the parties have agreed to amendments by way of a binding letter of intent (“Binding LOI”) and have committed to implement the amendments to the definitive documents. The principal terms of the Binding LOI are as follows:

1. San Leon has agreed to proceed with its 15% equity investment in Decklar Petroleum, waiving the remaining conditions precedent.