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UPDATE 1-San Leon makes 13.6 mln stg offer for Island Oil

Thu Oct 15, 2009 2:47am EDT

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* Possible offer would value each Island share at 10 pence

* San Leon received an irrevocable undertaking for 18.4 pct

(Adds more detail)

LONDON, Oct 15 (Reuters) - San Leon Energy (SLEN.L) said on Thursday it made a 13.6 million pound ($21.7 million) offer for Island Oil & Gas (IOG.L), to build a strong Irish-based oil and gas exploration and development business.

Island is considering the proposal which offers one new San Leon share for every 2.3 Island shares, valuing each Island share at 10 pence.

"We believe the combination of our two companies would create a strong Irish based oil and gas exploration and development business with the management skills and financial resources to develop the asset portfolio," said San Leon Chairman Oisin Fanning.

San Leon said it has received an irrevocable undertaking from Platinum Petroleum, the largest shareholder in Island, for about 18.4 percent of Island's issued share capital.

San Leon said combining the companies would provide the resources to develop Island's Celtic Sea assets, combine technical skills, extend San Leon's seismic programme and combine the two companies' Moroccan assets for enhanced returns.

San Leon shares closed at 23 pence and Island shares closed at 7.6 pence on Wednesday. (Reporting by Sharon Lindores; Editing by Dan Lalor) ($1=.6259 Pound)



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