San Leon Energy fracking company placing to raise €40m from shareholders

San Leon Energy, the fracking company owned by Oisín Fanning, the former chief executive of Smart Telecom, has announced a fundraising round at a share price of 0.8p.

The company has conditionally agreed to raise £29m (€40.35m) from existing and new shareholders by agreeing to place 36,250,000 new ordinary shares at 80p per share (or 0.8p per existing share). The share placing will therefore effect an increase in the issued share capital (adjusted for the share capital reorganisation) of about 143%.

Among the company’s main reasons for the fundraising is to enable it to retain the Barryroe oil field off the Cork coast rather than monetising it to fund operations.

As a result of the raise, Toscafund Asset Management will increase its holding to 41.5% from 22% of total shares having entered into a conditional placing commitment for £16m as part of the placing.

Commenting on the share placing, Mr Fanning described the increase in Toscafund’s holding as a sign of its belief in the company.

“We are very grateful for the strong support of the existing and new investors in the placing,” Mr Fanning said. “The funds will help transform San Leon into a cash-generating producer, and will bring other assets towards development.

“The three existing assets expected to generate cash in the coming years [Rawicz, Siekierki, and Barryroe] will be the foundation for significant growth and the creation of shareholder value.”

San Leon also continues to undertake a significant review of its portfolio and costs, with the intention of materially lowering its cost base, and further details will be provided. This review will not affect the company’s core business.