San Leon Energy Plc Adds Two New Licences In Morocco

San Leon Energy Plc (LON: SLE) sees Morocco as among “the last exploration frontiers”.

Mark Stones

Mark Stones (TMFMumbojumbones) joined The Motley Fool in 2014 and initially worked as a writer for Fool.co.uk, before joining the Fool’s analyst programme. Mark earned a BA in English from Loughborough University. Although he spends more time reading annual reports than Russian literature these days, he still appreciates a novelist’s antipathy toward the accepted view, which is a useful attitude when trying to sniff out hidden gems on the stock market. His approach to investing has been largely influenced by the principles of Warren Buffett and Peter Lynch. He also takes a special interest in the work of healthcare companies. Outside of investing, Mark plays guitar, enjoys good writing and has a guilty passion for combat sports.

Published 8 September, 2014 10:53 am BST

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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.