Leni oil and gas regrets $1 Maltese oil field stake sale as Genel pounces

Leni Gas & Oil directors and shareholders are feeling rather cheesed off after selling their stake in a Maltese licence to Mediterranean Oil & Gas (MOG) for a knock down price which later turned out to be worth rather more! In fact, it was worth much, much more, apparently within a month.

In early August, MOG bought the remaining 10% stake in the Malta licence for $1, plus $19,050 in past costs. Leni said it would write off £1.9m in costs related to the licence. But then on August 23 MOG said it had sold 75pc of its Maltese blocks for $10m to Genel Energy, meaning that Leni has lost out to the tune of several million dollars. Genel will also pay for 2 drilling wells. Genel’s CEO is ex-BP man, Tony Hayward.

Tony Hayward, Genel

Certainly it sounds a bit suspicious that the deal with Genel was consummated just 3 weeks after Leni’s exit and the company has demanded answers to questions on seismic data on the Maltese block as well as details of the timings of negotiations. On August 13, when MOG announced the Leni deal had been approved by Maltese authorities, it also revealed that seismic work had shown three leads in Cretaceous zones on the Maltese exploration block.

As often written, it’s a murky world in AIM and the Mediterranean directors seem to have played Leni. Ultimately the courts may decide whether it was illegal or not. Either that or the management team at Leni are rather incompetent!

Contrarian Investor UK