Moroccan government assumes control of San Leon bank guarantee

Africa and Europe-focussed oil and gas developer and appraiser San Leon Energy announced on Wednesday that the Office National des Hydrocarbures et des Mines in Morocco had written to the company regarding the non-performance of the work programme on its Zag Licence, onshore Morocco.

The AIM-traded firm said ONHYM assumed control of the existing bank guarantee, of which San Leon's share was $1.4m - an amount listed in the company's accounts as restricted cash, and requested a penalty of the same amount again to be paid.

“The company is in negotiations with ONHYM regarding the future of the licence, including the work programme,” San Leon’s board said in a statement.

“The Zag licence is in a geographical area which the company believes justifies a declaration of force majeure due to the regional security situation.

“San Leon will update the market in due course.”