Shares of San Leon Energy (LSE: SLE) increased by up to 8% in early trade after the oil and gas company acquired two licences in Morocco, one of the few underexplored regions in North Africa.
San Leon has acquired Petromaroc’s 1.5% working interest in the Sidi Moussa offshore licence, where Genel Energy is currently drilling.
Petromaroc has also transferred its 22.5% working interest in The Tarfaya Onshore licence. The deal means Petromaroc will pay San Leon its share of expenditure during the current exploration period.
Both transfers of interest are pending the approval of Morrocan authorities.
Oisin Fanning, San Leon’s executive chairman, commented:
“We are delighted to have acquired additional interests in our two highly prospective licences in Morocco at no additional costs to the Company. The excellent fiscal terms and high potential upside all contribute to make Morocco one of the last exploration frontiers.”
The company made a loss last year, and shareholders will hope for value creation through successful exploration projects.
Prospective investors should consider that the only competitive advantage among oil and gas businesses is to be the lowest cost producer. As such, close study of the balance sheet is essential prior to any trading decision.
