TIDMSOLO

RNS Number : 7189O

Solo Oil Plc

11 February 2016

FOR IMMEDIATE RELEASE, 7am 11 February 2016

SOLO OIL PLC

("Solo" or the "Company")

Further Investment, Kiliwani North, Tanzania

Solo today announces that further to the various agreements previously announced with Aminex plc ("Aminex") to acquire a further interest in the Kiliwani North Development Licence ("KNDL") Solo has agreed to increase its interest to 10%. Solo currently holds a 6.175% interest in the KNDL where the Kiliwani North-1 well is located and will pay Aminex US$2.16 million to increase its holding by 3.825% to 10%.

The Gas Sales Agreement ("GSA") with the Tanzanian Petroleum development Corporation ("TDPC") was signed in early January and commissioning of the Kiliwani North-1 well ("KN-1") has been underway over the last few weeks with gas production expected to commence shortly. KN-1 gas will initially be used to commission the new Songo Songo gas treatment plant before being transported by pipeline to Dar es Salaam where it will be sold into the local Tanzanian market at an agreed price of approximately US$3.07 per mscf.

Aminex obtained approvals, including those from the Tanzanian authorities, for a disposal of up to 13% in KNDL to Solo in early 2015. No further approvals are expected in relation to this transaction.

In 2015 LR Senergy ascribed gross 28 billion cubic feet best estimate contingent resources to Kiliwani North-1, which was contingent on completion of the GSA, which has now occurred. It is therefore Solo's expectation that reserves at Kiliwani North will be booked later this year.

Neil Ritson, Solo's Chairman, commented:

"In order to balance various opportunities to deploy cash in the Solo business we have elected to increase our interest in Kiliwani North by just under 4 percent, slightly less than the maximum of 6 percent available to us under the option agreement signed last year. Solo will receive 10% of the KNDL revenue once the purchase is completed. Gas production at KN-1 is expected to commence shortly."

The key terms of the proposed KNDL acquisition are set out below:

1. Solo has agreed to reduce its option to acquire a further 6.175% in the KNDL in the Second Tranche Acquisition as originally announced 14 October 2014 and modified by TPDC Back-in announced on 5 October 2015.

2. The Second Tranche Acquisition will now consist of Solo acquiring a further 3.825% of the KNDL from Aminex for a consideration of US$2,168,000.

3. The parties have agreed to enter into a formal sale and purchase agreement ("SPA") within 30 days.

4. Solo will pay US$500,000 on signature of the SPA and the balance on or before 30 April 2016, unless otherwise agreed between the parties.

Current participants in the Kiliwani North Development Licence, following TPDC back in, are: Ndovu Resources Ltd (Aminex) 55.575% (operator), RAK Gas LLC 23.75%, Solo Oil plc 6.175%, Bounty Oil & Gas NL 9.05% and TPDC 5%. On completion of the SPA Aminex will hold 51.75% and Solo will hold 10%.

Qualified Person's Statement:

The information contained in this announcement has been reviewed and approved by Neil Ritson, Chairman and Director for Solo Oil Plc who has over 38 years of relevant experience in the energy sector. Mr. Ritson is a member of the Society of Petroleum Engineers, an Active Member of the American Association of Petroleum Geologists and is a Fellow of the Geological Society of London.

For further information:

 
 Solo Oil plc 
  Neil Ritson 
  Fergus Jenkins             +44 (0) 20 3794 9230 
 
 Beaumont Cornish Limited 
  Nominated Adviser and 
  Joint Broker 
  Roland Cornish             +44 (0) 20 7628 3396 
  Shore Capital 
   Joint Broker 
   Pascal Keane 
   Jerry Keen (Corporate 
   Broker) 
   Bell Pottinger 
   Public Relations 
   Henry Lerwill 
   Cassiopeia Services 
   LLP                        +44 (0) 20 7408 4090 
   Investor Relations          +44 (0) 20 3772 2500 
   Stefania Barbaglio          +44 (0) 79 4969 0338

Glossary:

 
 bcf                    billion cubic feet 
---------------------  ----------------------------------------------------------------------------------------------- 
 contingent resources   those quantities of petroleum estimated, as of a given date, to be potentially recoverable 
                         from known accumulations, but the applied project(s) are not yet considered mature enough 
                         for commercial development due to one or more contingencies 
---------------------  ----------------------------------------------------------------------------------------------- 
 GSA                    gas sales agreement 
---------------------  ----------------------------------------------------------------------------------------------- 
 mscf                   thousand standard cubic feet 
---------------------  ----------------------------------------------------------------------------------------------- 
 mmscfd                 million standard cubic feet of gas per day 
---------------------  ----------------------------------------------------------------------------------------------- 
 reserves               reserves are defined by the SPE as those quantities of petroleum, here oil and gas, which 
                        are anticipated to be commercially recovered from known accumulations from a given date 
                        forward 
---------------------  -----------------------------------------------------------------------------------------------

This information is provided by RNS

The company news service from the London Stock Exchange

END

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February 11, 2016 02:00 ET (07:00 GMT)

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