Update on proposed transaction

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information for the purposes of Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the publication of this announcement, this information is now considered to be in the public domain.

12 July 2021

San Leon Energy plc

("San Leon" or the "Company")

Update on proposed transaction with Midwestern Oil and Gas Company Limited

Further to the Company's announcements made on 24 June 2021 and 7 July 2021, San Leon, the independent oil and gas production, development and exploration company focused on Nigeria, is pleased to announce that heads of terms have been signed in respect of, inter alia, the proposed reorganisation to consolidate Midwestern Oil and Gas Company Limited's ("Midwestern") holdings in the Company and Midwestern Leon Petroleum Limited ("MLPL") into a single holding in the Company (the "Potential Transaction"). Following the Potential Transaction, the Company will own 100% of the equity in MLPL. San Leon currently owns 40% of the equity in MLPL and Midwestern owns the remaining 60% of the equity in MLPL.

The heads of terms, which are subject, inter alia, to due diligence, agreement of final contracts, Nigerian regulatory approvals and the approval of San Leon's shareholders, sets out the structure of the Potential Transaction and includes, inter alia, the proposed further debt and equity investments to be made by San Leon in Energy Link Infrastructure (Malta) Limited ("ELI"). The parties are now engaging with their respective advisers to prepare the necessary transaction documentation (including publishing an AIM admission document, given that the Potential Transaction will be classified as a reverse takeover under the AIM Rules for Companies (the "AIM Rules")) and to carry out due diligence.

In accordance with Rule 14 of the AIM Rules, the Company's ordinary shares will remain suspended from trading on AIM until such time as either an AIM admission document is published or an announcement is released confirming that the reverse takeover in contemplation is not proceeding.

There can be no guarantee at this stage that the Potential Transaction or the proposed debt and equity investments in ELI will complete. The Company will release further announcements as and when appropriate.

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