TIDMSOLO
RNS Number : 0301S
Solo Oil Plc
28 September 2017
For Immediate Release
28 September 2017
Solo Oil plc
("Solo" or the "Company")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHSED 30 JUNE 2017
Chairman's Statement
The Company continues to make significant progress with the
major investments in its portfolio. During the first half 2017
successful appraisal drilling and testing at Ntorya-2 in Tanzania
led to an upgrade in the gross in place gas resources to 1.34
trillion cubic feet ("tcf"). As a result of this substantial
resource upgrade and an independent engineering study, a 25-year
development licence has been applied for in the third-quarter. Gas
sales continued at Kiliwani North at an average rate of about 15
mmscfd in the year to June with net revenues of over GBP450,000
booked during the period.
Meanwhile in the UK the drilling success in several analogous
Weald Basin projects has further de-risked the Horse Hill-1 oil
discovery where long-term flow tests are now planned prior to a
development plan being submitted.
The period also saw the Company invest in a strategic helium
exploration project in Tanzania where technical studies will be
completed in early 2018 and where drilling is hoped to be carried
out next year.
Highlights:
Tanzania
-- Ntorya-2 appraisal well was drilled and successfully flow
tested during the period and has been suspended for future gas
production
-- At Ntorya-2 a total 51 metres gross sandstone reservoir
section was encountered 74 metres shallower than in Ntorya-1
-- A restricted test flowed at 17 mmscfd of gas (equivalent to approximately 2,830 boepd)
-- Unrisked gross resource estimates for the Ntorya appraisal
area increased to 1,344 bcf Pmean GIIP
-- Solo now holds net resources of approximately 335 bcf Pmean
GIIP in the Ruvuma Basin, which the Company estimates to be in
excess of 200 bcf (35 million barrels oil equivalent) of contingent
resources, net to its 25% interest
-- io oil & gas consulting, a Baker Hughes (a GE Company)
and McDermott joint venture, were appointed to prepare a gas
commercialisation study to assist with the development of the
Ntorya field
-- A Development Plan for the Ntorya gas condensate field was
submitted to the Tanzania Petroleum Development Corporation
("TPDC") for approval during September 2017
-- Average production from Kiliwani North-1 ("KN-1") was
approximately 15 mmscfd for the first half of 2017
-- KN-1 gas is sold and paid for in US Dollars and the current
gas price is $3.27 per mmscf, a contract price that is not affected
by movements in global markets for oil and natural gas
-- Solo acquired a 10% interest in Helium One Limited during the
period as an early entry opportunity into the what is estimated to
be a US$6bn/year global helium market
-- Helium One's Rukwa Project in Tanzania is independently
estimated by Netherland, Sewell and Associates Inc. ("NSAI") to
contain unrisked most likely prospective recoverable helium volumes
close to 100 bcf
United Kingdom
-- In late 2016 an application was submitted to Surrey County
Council for the further development of Horse Hill, including
long-term flow tests and further drilling and seismic data
acquisition, if appropriate. Determination of the planning consent
is anticipated in October 2017
-- UK Environment Agency has approved the proposed long-term
testing of HH-1 and further work as envisaged under the planning
application.
-- Following the successful testing at Horse Hill-1 ("HH-1")
various operators have drilled additional wells in the Kimmeridge
Limestone play in the Weald Basin and have demonstrated the
widespread occurrence of the play, further supporting the regional
significance of the naturally fractured oil bearing reservoir
Corporate & Financial
-- Revenues from the sale of gas at Kiliwani totalled
GBP451,000, exceeding the Company's G&A for the period
-- The Company issued GBP4.55 million in new equity during the
period to pay for Ntorya-2 well testing costs and acquisition of
10% in Helium One
-- Post period end shareholders approved a 20 for 1
consolidation of the Company's issued share capital.
Review of Investments:
1. Tanzania
Many of Solo's investments are in Tanzania, a stable democratic
republic in East Africa, where gas exploration efforts have been
highly successful in recent years. Solo, and its operating partner
Aminex plc ("Aminex"), currently produces gas that is sold to TPDC
under a gas sales agreement signed in 2016. This gas, from Kiliwani
North-1, is used domestically and is important to the development
of the local energy market in Tanzania. Gas produced and utilised
in Tanzania is largely unaffected by issues that have arisen with
resources destined for export following changes in the legislation
regarding hydrocarbon and mining law recently announced by the
Tanzanian government. The nationally significant onshore Ntorya gas
discovery made by Solo and Aminex is expected to be developed
solely for local consumption and therefore expected to continue to
have TPDC's full support as Tanzania seeks to grow its indigenous
energy provision.
Changes to the mining code that have recently been announced
will affect Helium One's project, however, the economics of natural
helium are compelling and Solo's view having taken independent
legal advice and in view of the phase of the project is that the
changes proposed will not materially influence the viability of the
project which, if confirmed by drilling, would represent a world
class source of helium.
Ruvuma Basin (25% interest)
Solo holds a 25% interest in the Ruvuma Petroleum Sharing
Agreement ("Ruvuma PSA") in the south-east of Tanzania covering an
area of approximately 3,447 square kilometres of which
approximately 90% lies onshore and the balance offshore. The Ruvuma
PSA is in a region of southern Tanzania where very substantial gas
discoveries have been made offshore in recent years and where gas
has also been discovered onshore and along the coastal islands at
Ntorya, Mnazi Bay, Kiliwani North and Songo Songo.
The Ntorya gas-condensate discovery, made in 2012 and operated
by Aminex, represents the most immediate commercialisation
opportunity in the Ruvuma PSC. The Ntorya-1 well was flow testing
over a 3.5 metres zone at the top of the gross 25 metre gas bearing
interval produced at a maximum gross flow rate of 20.1 mmscfd and
139 bpd of 53 degree API condensate through a 1-inch choke. The
well is suspended as a discovery for subsequent additional testing
or production.
Based on an infill 2D seismic programme around Ntorya-1 a
re-estimation of the discovered and prospective resources in the
Likonde-Ntorya area was made and subsequently audited by LR Senergy
who issued a CPR in May 2015. LR Senergy estimated that Ntorya
contained a gross 153 bcf of proven gas in place, of which they
attributed a gross 70 bcf as best estimate contingent resources.
Overall in the Ruvuma PSA, LR Senergy estimated gross 4.17 tcf of
discovered and undiscovered gas in place.
In order to further appraise the Ntorya gas condensate discovery
made in the Ntorya-1 well it was decided to drill an up-dip well,
Ntorya-2, at a location approximately 1.5 kilometres east of the
discovery well. The location was prepared in late 2016 along with a
possible further appraisal site, Ntorya-3, located further up-dip
to the east. The Caroil-2 rig was moved to site in December and the
well spudded on 21 December 2016.
During early 2017 drilling continued on prognosis with 17-inch
casing set at 1,326 metres in early January and the well reached
the anticipated reservoir section at a depth of 2,593 metres in
early February 2017. A gross gas bearing sandstone reservoir
interval of 51 metres thickness was encountered and the well was
deepened to a final total depth of 2,795 metres, with a 7-inch
liner set prior to testing. A 34 metre interval of the gross
reservoir was perforated and flowed dry gas at a stabilised rate of
17 mmscfd through a 40/64-inch choke. Analysis of the well during
testing and interpretation of electric logs strongly suggests that
high mud weights, used to control gas influx during drilling, had
caused formation damage around the well bore and these effects were
reducing the test flows. Remedial operations prior to production
would be used to target higher flow rates.
As a result of the new data from Ntorya-2 and a reassessment of
all available data including a new seismic interpretation the gross
most likely in place gas in the Ntorya discovery was increased some
9-fold from 153 bcf in the LR Senergy report in May 2015 to 1,344
bcf. The Company is fully satisfied that such volumes, now
discovered, are commercially exploitable and along with the
operator has applied for a 25-year development licence covering the
entire Ntorya field area. An early production scheme involving
local use of the gas or its conversion to power or CNG is also
under consideration.
Once a development licence has been awarded, Solo and Aminex
will carry out an approved work programme, yet to be agreed with
the Tanzanian authorities, which may potentially include 3D seismic
acquisition and further drilling including the Ntorya-3 well at a
cost similar to the Ntorya-2 well drilled in 2017.
Solo is currently assessing its options with regards to its
future participation in the project. Amongst such considerations is
further proportionate investment, project financing of an early
production scheme, a possible farm-down, or sale of all or some of
its 25% interest in the discovery in order to monetise its
investment in the Ruvuma PSC and return funds to the Company to
deploy elsewhere.
The Ruvuma PSA comprises two licence areas: the Mtwara Licence
and the Lindi Licence. As well as the Ntorya wells, several further
prospects in the Ruvuma acreage on both Licences have been
identified from the 2014/2015 mapping, including potential
prospects at Likonde and Namisange. During 2016 formal ministerial
approval was obtained for a one-year extension to the Mtwara
Licence of the Ruvuma PSA, to 8 December 2017. Although the Lindi
Licence technically expired on 28 January 2017, negotiations are
ongoing for an extension to this licence to enable the work
commitments to be carried out in conjunction with the Mtwara
Licence area. The operator has also applied for a two-year
extension to the Mtwara Licence, which includes the Ntorya
appraisal licence, and Solo has a reasonable expectation that both
extensions will be granted.
Under the terms of the Ruvuma PSA, after the approval of a
development plan, TPDC may elect to contribute 15% of development
costs in order to obtain a participating interest of 15% in
production and revenues.
Kiliwani North (7.55% interest)
In 2014, Solo agreed with Aminex to acquire up to a 13% working
interest in the Kiliwani North Development Licence ("KNDL") on
Songo Songo Island. The Kiliwani North-1 ("KN-1") well was drilled
by Aminex and its partners in 2008 and discovered gas in a 60 metre
column in the Lower Cretaceous.
Solo acquired an initial 6.5% interest in the KNDL project for
US$3.5 million in 2015 and subsequently announced its intention to
increase its stake to up to 10% through the acquisition of three
additional tranches of project equity linked to project milestones
at the Company's option.
The condition precedent for further acquisition of project
equity by Solo was the signature of a gas sales agreement ("GSA"),
which was achieved in January 2016. The subsequently agreed tranche
milestones were the commencement of gas production, which was
achieved in April 2016, the receipt of first cash revenue and the
declaration of commercial (post-commissioning) gas production under
the take-or-pay arrangements of the GSA. The first of these
milestones has been reached and Solo increased its direct
participation to 7.55%, which would reduce subject to TPDC back-in
rights to 7.175%. Since production has continued under the
commissioning terms of the Kiliwani North GSA and as the final
tranche required TPDC to confirm a commercial operations date
Aminex and Solo Oil have consequently not completed the final
tranche of the asset sale agreement and have mutually agreed to the
termination of the 2016 agreement
The GSA signed with TPDC for KN-1 gas contains payment
guarantees in US Dollars and is linked to a price escalation
formula commencing at US$3.00 per million British Thermal Units
("mmBTU") and rising from January 2016. Following commissioning
KN-1 has been produced at a rate of roughly 15 mmscfd being the
call on gas being made by TPDC. Overall gas market development
continues to lag supply in Tanzania, however, this is expected to
change to a supply shortage in future years as new power projects
and industrial usage increases. Due to a higher than specified
calorific value for the gas and an advantageous effect of the sales
contract's indexation allowance, gas has been sold during the
reporting period at approximately US$3.27 per mcf.
A resource report by LR Senergy, completed in May 2015,
attributed approximately 28 bcf gross best estimate contingent
resource to the Kiliwani North field. As a result of continued
production following a long period when the well was shut-in, the
wellhead pressure is now declining and Aminex is reviewing possible
alternatives for remediation in the future to maximise recoverable
resources. Aminex is planning to update its resource report for
this asset and has prepared a programme to re-enter the Kiliwani
North-1 well to gather downhole data, potentially as early as later
in the year.
As previously advised, TPDC has notified Aminex that it intends
to take up its 5% share of production in accordance with the Nyuni
East Songo Songo PSA which governs the Kiliwani North Development
Licence. However, it has not yet finalised its participation in the
joint operating agreement and Solo's working interest therefore
remains at 7.55%.
Helium One (10% interest)
Solo entered into a sale and purchase agreement with Helium One
Limited ("Helium One") to acquire an initial 10% stake in Helium
One with an option to acquire a further 10% stake. Helium One owns
exploration licences in a number of highly prospective and
extremely rare helium properties in Tanzania. Netherland &
Sewell Associates International has independently assessed the most
mature of the projects, at Rukwa, in the East African Rift Valley
as having the gross potential for close to 100 bcf of helium in
place. With current world helium demand of approximately 6 bcf per
annum the Rukwa project represents a material potential
contribution to future helium supply.
Originally identified by means of helium macro-seeps the
prospects under investigation have been mapped using soil
geochemistry anomalies and are in part mapped on legacy 2D seismic
data acquired previously during failed hydrocarbon exploration. The
identified macro-seepage indicates high concentrations of helium
(up to in excess of 10% by volume) in association with nitrogen
that may be trapped in the subsurface. Helium One recently acquired
an airborne gravity and magnetic survey and plans to integrate the
interpretation of that data into their subsurface modelling before
acquiring additional 2D seismic to further define traps for
drilling, potentially as early as 2018.
World helium demand has been growing at a rate of about 3 per
cent per annum over the last decade and is a vital component of
many modern technologies, notably Magnetic Resonance Imaging
("MRI") devices used in modern medicine. As a result of its unique
properties as a super fluid, it plays a vital role in devices which
use super conducting magnets; as in MRI machines. As an inert gas
helium is also vital in the production of many critical electronic
components such as disk drives and fibre optics and for industrial
testing, purging and leak detection. Helium, as a lifting gas in
hybrid air vehicles (and other forms of airship), has also begun to
have increased significance. Though relatively abundant in the
earth's atmosphere, helium is lighter than air and is progressively
being lost to space and it is extremely difficult to recycle
effectively.
The current supply of helium comes from several large deposits
in the USA and as an impurity removed from hydrocarbon gas in a
number of liquefied natural gas ("LNG") projects such as in Qatar
and Algeria. However, the US government has been selling its
strategic reserve and will close the facility for international
sales no later than 2021, after which there is projected to be a
significant shortage of helium available on world markets. In June
2017, several countries abruptly cut diplomatic relations with
Qatar and imposed trade and travel bans. The ramifications for
global helium supply were significant, with both Qatari plants
being turned off for a period of approximately 3 weeks, as exports
of helium could not pass the trade blocks. While only a temporary
aberration, it did highlight the fragility of the helium supply
chain, and reliance on Qatar (more so in 2021 when the USA
government ceases sales). Helium One is one of the only known
large, high-volume, standalone helium resource projects that if
successful, could provide much needed stability to global
supply.
The Helium One Tanzania projects have excellent supply economics
and, once liquefied, the helium could be transported to world
markets via the deep-water port at Dar es Salaam. Given the
competitive demand for crude helium on world markets Solo and
Helium One would expect to sell helium at the wellhead through an
off-take agreement with a large industrial gas company who would
liquefy and transport the helium to market. With weak supply-demand
fundamentals helium prices, which are currently approximately
US$145 per million cubic feet (crude helium), are expected to rise
significantly.
Solo completed its acquisition of an initial 10% interest in
Helium One on 22 March 2017 through the payment of GBP1.2 million
in cash and the issue to Helium One of 236,842,105 shares at an
issue price of 0.54p in Solo Oil plc.
Since Solo's investment, Helium One have been focussing on
evolving its subsurface technical data set and preparing its
prospect database ready for possible drilling in 2018. Subsequent
to period end Helium One has also engaged SRK Consulting to prepare
a scoping study on the Songwei prospect; one of 28 prospects within
the Rukwa area. Plans have also been made to start to reprocess the
existing legacy 2D seismic data with Solo's technical
assistance.
2. United Kingdom
Solo's principal investments to date in the UK have been in the
Weald Basin, south of London, where the Horse Hill-1 ("HH-1") was
drilled and identified a thick section of oil bearing naturally
fractured Kimmeridge Limestones. A well drilled recently at
Broadford Bridge ("BB-1") some 30 kilometres to the southwest of
HH-1, has revealed the continuation of similar naturally fractured
and oil saturated Kimmeridgian age limestones and shales as were
seen at HH-1. Logs and cores from the BB-1 well as reported show
extensive natural fracturing throughout the entire Kimmeridge
section, including a previously unidentified potential oil bearing
fracture-zone below the lowest Kimmeridge Limestone, KL1, now
designated KL0 and that results indicate a possible gross vertical
thickness of the Kimmeridge continuous oil deposit of up to around
1,200 feet. Solo remains confident that with additional drilling a
regionally significant new oil play will emerge and the Company is
assessing its future investment strategy in this new play.
Horse Hill, Weald Basin (6.5% interest)
In 2014, the Company acquired a 10% interest in a special
purpose company, Horse Hill Developments Limited ("HHDL"), which
became the operator and 65% interest holder in two Petroleum
Exploration and Development Licences, PEDL 137 and 246, in the
northern Weald Basin between Gatwick Airport and London. PEDL 137
covers 99.29 square kilometres (24,525 acres) to the north of
Gatwick Airport in Surrey. PEDL 246 covers an area of 43.58 square
kilometres (10,769 acres) and lies immediately adjacent and to the
east of PEDL 137.
The HH-1 well commenced drilling operations in September 2014
and reached total depth at 8,870 feet MD in November 2014.
Evaluation of electric logs and other data collected from the well
resulted in the announcement on 24 October 2014 of a conventional
Upper Portlandian Sandstone oil discovery. Subsequent analysis of
the Kimmeridge, Oxfordian and Liassic sections in the well
indicated that there was also substantial in place oil in the
naturally fractured Kimmeridge Limestones and associated
mudstones.
Approval for the testing of all three oil bearing zones was
granted in late 2015 and the tests commenced in early February
2016. Tests lead to naturally flowing oil rates of the Kimmeridge
Limestones at a gross rate of 460 bopd from the Lower interval and
900 bopd from the upper interval. The Portland Sandstone was placed
on pump to stimulate flow and achieved a maximum gross stable rate
in excess of 320 bopd. These flow rates substantially exceeded the
expectations for the well and rank alongside some of the highest
rates ever achieved on test for any UK onshore well.
Following the testing of the Portland Sandstone, where higher
productivity and a lower than expected water cut were observed,
further analysis on the electric logs has led to a 200% increase in
the anticipated gross oil in place at this stratigraphic level.
Previous estimates of oil in place within the Portland Sandstone
were 7.7 mmbbls per square mile and were increased to 22.9 mmbbls
per square mile. Based on the original closure estimated by Xodus
in 2015 this would increase the overall gross oil in place within
the Horse Hill Portlandian discovery to 62.5 mmbbls.
The relevant licences have been extended to permit further work
and UK Oil and Gas Investments plc ("UKOG") has indicated that it
hopes to perform long term testing on all hydrocarbon bearing zones
as part of a wider appraisal program that includes 3D seismic and
further drilling. In September 2017 the Environment Agency granted
the necessary permits to HHDL to carry out extended well tests,
drill a side-track well from the existing HH-1 and drill and test a
new borehole at the HH-1 site. A planning application in relation
to the proposed activities has been submitted to Surrey County
Council ("SCC"). We have been informed by HHDL that SCC has
confirmed that the planning application is now scheduled to be
determined at the October 2017 meeting of its planning
committee.
Isle of Wight, PEDL 331 (30% interest)
An application was made jointly with UK Oil and Gas Investments
plc ("UKOG") and Angus Energy Limited ("Angus") for a 200 square
kilometre onshore block in the south and central portion of the
Isle of Wight in the UK 14(th) Landward Licensing Round. Solo holds
a 30% interest in the joint venture.
The UK Oil and Gas Authority ("OGA") have now issued the
licence, PEDL 331, to the UKOG-Solo-Angus partnership. Based on
work by UKOG and confirmed by independent work by Solo Arreton-2,
originally drilled in 1974 but never tested, is now considered to
be an oil discovery on the Arreton Main Field. When taken together
with the adjacent prospects Xodus has calculated a P50 gross oil in
place estimate of 219 mmbbls in conventional reservoirs within the
Purbeck, Portland and Inferior Oolite limestone reservoirs at
Arreton. Arreton Main is considered by Xodus to contain most likely
(P50) contingent resource net to Solo's interest in PEDL 331 of 4.7
mmbbls.
UKOG will become operator of PEDL 331 and has commenced
discussions with the local planning authorities and expects to seek
regulatory consents to appraise the Arreton Main oil discovery in
the coming years.
3. Other investments
The Company holds two other investments that remain under active
review, but have had only minimal expenditure in the reporting
period.
Burj Africa, Nigeria, West Africa (20% interest)
Between 2013 and 2015 Solo made an investment into various
ventures aimed at accessing known reserves in fields in Nigeria.
These have resulted in a 20% interest in Burj Petroleum Africa
Limited ("Burj Africa") a company which had applied for various
undeveloped fields in the 2014 Nigerian Marginal Fields Bid Round
("Marginal Fields Round") along with joint venture partners Global
Oil and Gas and Truvent Consulting.
Recent developments in the world oil markets and specific to
Nigeria have significantly delayed the issue of new licences under
the envisaged Marginal Fields Round. The Company continues to
monitor developments in Nigeria and looks forward to further news
in due course.
Ontario, Canada (28.56% interest)
Solo holds an interest in 23,500 acres of petroleum leases in
southern Ontario, which contain a number of Ordovician reefal
structures that contain variously oil, gas and condensate. The
operator, Reef Resources Inc., has been unable to raise the
necessary funds to continue the development of the Ausable gas
condensate field and no alternative has so far been found to unlock
the potential. Solo's management continues to seek ways to advance
or monetise the investment made in the Ausable and the adjacent
Airport fields, and hopes to report progress in due course.
Financial Results
The Company's operating loss for the period was GBP306,000 (30
June 2016: GBP373,000 loss). Revenue from Kiliwani North gas sales
of GBP451,000 covered Solo's G&A expenditure for the interim
period. In addition, further charges of GBP197,000 related to the
expensing of share based director options as announced in October
2016, which are treated as a non-cash accounting entry.
The Company issued GBP4.55 million in new equity during the
period to pay for Ntorya-2 well testing costs and acquisition of an
initial 10% in Helium One. The Helium One acquisition was made at
an average share price of 0.56p (equivalent to 11.1p post the
recent Share Consolidation).
At the Company's AGM in July a 20 for 1 share consolidation was
approved by shareholders. The numbers of shares in issue were
reduced on the basis of 20 existing ordinary share being
consolidated into one new ordinary share of 0.20p. Following the
Share Consolidation the Company had 392,337,801 shares in
issue.
Immediate Outlook
Solo has made significant advances in its investments in
Tanzania in the last reporting period, especially in the Ntorya
gas-condensate discovery which has been further appraised by the
Ntorya-2 well with a resultant 9-fold increase in the estimated in
place gas resources. A new Competent Persons Report for these in
place resources and likely contingent resources will be
commissioned shortly. Receipt of the requested 25-year development
licence for Ntorya, which is expected in late 2017, will allow the
finalisation of plans to commercialise Ntorya; which in Solo's case
may involve the full or partial sale, or farmout, of the Company's
equity position depending on negotiating advantageous commercial
terms with a third-party.
Production from the Kiliwani North-1 well has averaged
approximately 15 mmscfd in the half-year to June 2017 and revenues
from this underpin the Company's G&A expenditure, allowing all
new funding to be directed to the Company's investment portfolio.
Observed pressure decline in the well, if appropriately managed, is
not expected to markedly affect revenues in 2017.
The Horse Hill discovery made in 2016 yielded exceptionally high
flow rates at all three productive levels on test and is shortly
expected to receive further longer-term testing in order to help
design a commercial development. Solo is currently reviewing the
recent drilling and testing by other operators in the Weald Basin
with a view to assessing future investment potential within the
basin.
The Company has made an initial investment in a natural helium
exploration opportunity in Tanzania which it sees as a potentially
world class helium deposit with very compelling economics and
market dynamics. Further technical work in the next year is
expected, subject to the availability of financing, anticipated to
be from new strategic partners, to lead to initial drilling on
these helium prospects in 2018.
Neil Ritson
Executive Chairman
27 September 2017
Competent Person's statement:
The information contained in this document has been reviewed and
approved by Neil Ritson, Chairman for Solo Oil Plc. Mr Ritson is a
member of the Society of Petroleum Engineers, a Fellow of the
Geological Society, an Active Member of the American Association of
Petroleum Geologists and has over 39 years relevant experience in
the oil industry.
Glossary and Notes
2D seismic seismic data collected using
the two-dimensional common depth
point method
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3D three-dimensional
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AIM London Stock Exchange Alternative
Investment Market
---------------------- -----------------------------------------
API American Petroleum Institute
---------------------- -----------------------------------------
barrel or bbl 45 US gallons
---------------------- -----------------------------------------
bbls barrels of oil
---------------------- -----------------------------------------
bcf billion cubic feet
---------------------- -----------------------------------------
best estimate the most likely estimate of a
or P50 parameter based on all available
data, also often termed the P50
(or the value of a probability
distribution of outcomes at the
50% confidence level)
---------------------- -----------------------------------------
billion 10 to the power 9
---------------------- -----------------------------------------
bopd barrels of oil per day
---------------------- -----------------------------------------
boepd barrels of oil equivalent per
day
---------------------- -----------------------------------------
Bpd barrels per day
---------------------- -----------------------------------------
contingent resources those quantities of petroleum
estimated, at a gin date, to
be potentially recoverable from
known accumulations, but the
associated projects are not yet
considered mature enough for
commercial development due to
one or more contingencies
---------------------- -----------------------------------------
CPR Competent Persons Report
---------------------- -----------------------------------------
discovery a petroleum accumulation for
which one or several exploratory
wells have established through
testing, sampling and/or logging
the existence of a significant
quantity of potentially moveable
hydrocarbons
---------------------- -----------------------------------------
electric logs tools used within the wellbore
to measure the rock and fluid
properties of the surrounding
formations
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G&A general and administrative expenditure
---------------------- -----------------------------------------
GIIP gas initially in place
---------------------- -----------------------------------------
GSA gas sales agreement
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HH-1 Horse Hill-1 well
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HHDL Horse Hill Developments Limited
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KN-1 Kiliwani North-1 well
---------------------- -----------------------------------------
KNDL Kiliwani North Development Licence
---------------------- -----------------------------------------
m thousand (ten to the power 3)
---------------------- -----------------------------------------
mm million (ten to the power 6)
---------------------- -----------------------------------------
mmbbls million barrels of oil
---------------------- -----------------------------------------
mmscf million standard cubic feet of
gas
---------------------- -----------------------------------------
mmscfd million standard cubic feet of
gas per day
---------------------- -----------------------------------------
MD measured depth
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OGA UK Oil and Gas Authority (formally
the Department of Energy and
Climate Change)
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oil in place stock tank oil initially in place,
or STOIIP those quantities of oil that
are estimated to be in known
reservoirs prior to production
commencing
---------------------- -----------------------------------------
pay reservoir or portion of a reservoir
formation that contains economically
producible hydrocarbons. The
overall interval in which pay
sections occur is the gross pay;
the portion of the gross pay
that meets specific criteria
such as minimum porosity, permeability
and hydrocarbon saturation are
termed net pay
---------------------- -----------------------------------------
PEDL Petroleum Exploration and Development
License
---------------------- -----------------------------------------
permeability the capability of a porous rock
or sediment to permit the flow
of fluids through the pore space
---------------------- -----------------------------------------
petrophysics the study of the physical and
chemical properties of rock formations
and their interactions with fluids
---------------------- -----------------------------------------
play a set of known or postulated
oil or gas accumulations sharing
similar geologic properties
---------------------- -----------------------------------------
porosity the percentage of void space
in a rock formation
---------------------- -----------------------------------------
prospective resources those quantities of petroleum
which are estimated, at a given
date, to be potentially recovered
from undiscovered accumulations
---------------------- -----------------------------------------
proven reserves those quantities of petroleum,
which, by analysis of geoscience
and
engineering data, can be estimated
with reasonable certainty to
be commercially recoverable (1P),
from a given date forward, from
known reservoirs and under defined
economic conditions, operating
methods, and government regulations
---------------------- -----------------------------------------
probable reserves those additional reserves which
analysis of geoscience and engineering
data indicate are less likely
to be recovered than Proved Reserves
but more certain to be recovered
than Possible Reserves. It is
equally likely that actual remaining
quantities recovered will be
greater than or less than the
sum of the estimated Proved plus
Probable Reserves (2P)
---------------------- -----------------------------------------
possible reserves those additional reserves which
analysis of geoscience and engineering
data suggest are less likely
to be recoverable than Probable
Reserves. The total quantities
ultimately recovered from the
project have a low probability
to exceed the sum of Proved plus
Probable plus Possible (3P) Reserves,
which is equivalent to the high
estimate scenario
---------------------- -----------------------------------------
PSA petroleum sharing agreement
---------------------- -----------------------------------------
PRMS Petroleum Resources Management
System
---------------------- -----------------------------------------
reserves those quantities of petroleum
anticipated to be commercially
recovered by application of development
projects to known accumulations
from a given date forward under
defined conditions
---------------------- -----------------------------------------
reservoir a subsurface rock formation containing
an individual natural accumulation
of moveable petroleum
---------------------- -----------------------------------------
Share Consolidation on 24 July 2017 the numbers of
Company shares in issue were
reduced on the basis of 20 existing
existing ordinary share being
consolidated into one new ordinary
share of 0.20p
---------------------- -----------------------------------------
SPE numbers of shares in issue were
reduced on the basis of 20 existing
existing ordinary share being
consolidated into one new ordinary
share of 0.20p
---------------------- -----------------------------------------
tcf trillion cubic feet
---------------------- -----------------------------------------
trillion 10 to the power 12
---------------------- -----------------------------------------
unconventional widely accepted to mean those
reservoir hydrocarbon reservoirs that are
tight; that is have low permeability
---------------------- -----------------------------------------
The estimates provided in this statement are based on the
Petroleum Resources Management System ("PRMS") published by the
("SPE") and are reported consistent with the SPE's 2011 guidelines.
All definitions used in the announcement have the meaning given to
them in the PRMS.
Unless otherwise stated all figures are net to Solo's
interest.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
For further information:
Solo Oil plc
Neil Ritson / Dan Maling +44 (0) 20 3794 9230
Beaumont Cornish Limited
Nominated Adviser and
Joint Broker
Roland Cornish/Rosalind
Hill Abrahams +44 (0) 20 7628 3396
Shore Capital
Joint Broker
Jerry Keen +44 (0) 20 7408 4090
Beaufort Securities
Joint Broker
Jon Belliss +44 (0) 20 7382 8300
Buchanan (PR)
Ben Romney / Chris
Judd / Henry Wilson +44 (0) 20 7466 5000
CONDENSED INTERIM INCOME STATEMENT
Six months Six months Year ended
ended ended
Notes 30 June 30 June 31 December
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
GBP 000's GBP 000's GBP 000's
Revenue 451 - 501
Administrative expenses:
G&A 450 357 725
Share based expense 197 - 49
Exchange loss / (gain) 110 16 (53)
------------ ------------ ------------
Loss from operation (306) (373) (220)
Amortisation costs (310) - (275)
Finance costs - (2) (29)
Provision for losses on - (37) -
financial instrument
------------ ------------ ------------
(Loss) on ordinary activities
before taxation (616) (412) (524)
Income tax - - -
------------ ------------ ------------
Retained (Loss) for the
period attributable to
equity holders of the
Company (616) (412) (524)
------------ ------------ ------------
Loss per share (pence)
Basic and diluted 2 (0.008) (0.010) (0.010)
------------ ------------ ------------
CONDENSED INTERIM STATEMENT OF OTHER COMPREHENSIVE INCOME
Six months Six months Year ended
ended ended
30 June 30 June 31 December
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
GBP 000's GBP 000's GBP 000's
Loss for the period (616) (412) (524)
Decrease in value of Available
for sale assets (3) (14) (34)
Total comprehensive income (619) (426) (558)
------------ ------------ ------------
CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION
As at As at As at
30 June 30 June 31 December
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
GBP 000's GBP 000's GBP 000's
Non-current assets
Intangible assets 14,868 11,783 10,231
Oil & gas properties 2,173 - 2,483
Available for sale assets 1,176 1,203 1,181
Total non-current assets 18,217 12,986 13,895
Current assets
Trade and other receivables 1,151 791 1,336
Cash and cash equivalents 526 362 600
------------ ------------ ------------
Total current assets 1,677 1,153 1,936
------------ ------------ ------------
Total assets 19,894 14,139 15,831
------------ ------------ ------------
Current liabilities
Trade and other payables (603) (183) (444)
Derivative financial - (351) -
instrument
Total liabilities (603) (534) (444)
------------ ------------ ------------
Net assets 19,291 13,605 15,387
============ ============ ============
Equity
Share capital 785 588 699
Deferred share capital 1,831 1,831 1,831
Share premium reserve 31,799 25,805 27,559
Share-based payments 1,130 884 933
AFS reserve (119) (96) (166)
Retained loss (16,135) (15,407) (15,519)
------------ ------------ ------------
Total equity attributable
to equity holders of
the parent 19,291 13,605 15,387
============ ============ ============
CONDENSED INTERIM STATEMENT OF CASH FLOWS
Six months Six months Year ended
ended ended
30 June 30 June 31 December
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
GBP 000's GBP 000's GBP 000's
Cash outflow from operating
activities
Operating loss (306) (373) (220)
Adjustments for:
Share-based payments 197 - 49
Decrease/(increase) in
receivables 185 (268) (813)
Increase/(decrease) in
payables 159 (51) 210
Foreign exchange loss 2 (9) 93
------------ ------------ ------------
Net cash (outflow) from
operating activities 237 (701) (681)
------------ ------------ ------------
Cash flows from investing
activities
Payments to acquire intangible
assets (4,637) (391) (1,597)
Payments to acquire available
for sale investment - (8) (450)
Net cash outflow from
investing activities (4,637) (399) (2,047)
------------ ------------ ------------
Cash flows from financing
activities
Repayments of borrowings - (122) (119)
Finance costs - - (2)
Proceeds on issuing of
ordinary shares 4,550 800 2,800
Cost of issue of ordinary
shares (224) (40) (175)
------------ ------------ ------------
Net cash inflow from
financing activities 4,326 638 2,504
------------ ------------ ------------
Net (decrease) in cash
and cash equivalents (74) (462) (224)
Cash and cash equivalents
at beginning of period 600 824 824
Cash and cash equivalents
at end of period 526 362 600
============ ============ ============
CONDENSED STATEMENT OF CHANGES IN EQUITY
Share capital Deferred Share premium Share based AFS Accumulated Total
share capital payments reserve losses
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
Balance at 31
December
2015 556 1,831 25,077 884 (82) (14,995) 13,271
-------------- --------------- -------------- ------------ --------- ------------ ---------
Loss for the
period - - - - - (524) (524)
Decrease in
value of
Available for
sale assets - - - - (34) - (34)
-------------- --------------- -------------- ------------ --------- ------------ ---------
Total
comprehensive
income - - - - (34) (524) (558)
Share issue 143 - 2,657 - - - 2,800
Cost of share
issue - - (175) - - - (175)
Share-based
payment
charge - - - 49 - - 49
Share options - - - - - - -
expired
-------------- --------------- -------------- ------------ --------- ------------ ---------
Total
contributions
by and
distributions
to owners of
the Company 143 - 2,482 49 - - 2,674
Balance at 31
December
2016 699 1,831 27,559 933 (116) (15,519) 15,387
-------------- --------------- -------------- ------------ --------- ------------ ---------
Loss for the
period - - - - - (616) (616)
Decrease in
value of
Available for
sale assets - - - - (3) - (3)
-------------- --------------- -------------- ------------ --------- ------------ ---------
Total
comprehensive
income - - - - (3) (616) (619)
Share capital
issued 86 - 4,464 - - - 4,550
Cost of share
issue - - (224) - - - (224)
Share-based
payment
charge - - - 197 - - 197
Total
contributions
by and
distributions
to
owners of the
Company 86 - 4,240 197 - - 4,523
Balance at 30
June 2017 785 1,831 31,799 1,130 (119) (16,135) 19,291
-------------- --------------- -------------- ------------ --------- ------------ ---------
NOTES TO CONDENSED INTERIM FINANCIAL INFORMATION
1 BASIS OF PREPARATION
The financial information has been prepared under the historical
cost convention and on a going concern basis and in accordance with
International Financial Reporting Standards and IFRIC
interpretations adopted for use in the European Union ("IFRS") and
those parts of the Companies Act 2006 applicable to companies
reporting under IFRS.
The condensed interim financial information for the period ended
30 June 2017 has not been audited or reviewed in accordance with
the International Standard on Review Engagements 2410 issued by the
Auditing Practices Board. The figures were prepared using
applicable accounting policies and practices consistent with those
adopted in the statutory accounts for the period ended 31 December
2016. The figures for the period ended 31 December 2016 have been
extracted from these accounts, which have been delivered to the
Registrar of Companies, and contained an unqualified audit
report.
The condensed interim financial information contained in this
document does not constitute statutory accounts. In the opinion of
the directors the financial information for this period fairly
presents the financial position, result of operations and cash
flows for this period.
This Interim Financial Report was approved by the Board of
Directors on 27 September 2017.
Statement of compliance
These condensed company interim financial statements have been
prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union with the
exception of International Accounting Standard ('IAS') 34 - Interim
Financial Reporting. Accordingly the interim financial statements
do not include all of the information or disclosures required in
the annual financial statements and should be read in conjunction
with the Company's 2016 annual financial statements.
2 LOSS PER ORDINARY SHARE
The calculation of earnings per share is based on the loss after
taxation divided by the weighted average number of share in issue
during the period:
Six months to Six months to Year ended
30 June 2017 30 June 2016 31 December 2016
(Unaudited) (Unaudited) (Audited)
Net loss after taxation (GBP 000's) (616) (412) (524)
Weighted average number of ordinary shares used in calculating
basic earnings per share (millions) 7,537.5 5,780.4 6,091.4
Basic loss per share (pence) (0.008) (0.010) (0.010)
As the inclusion of the potential ordinary shares would result
in a decrease in the loss per share they are considered to be
anti-dilutive and, as such, a diluted loss per share is not
included.
3 EVENTS AFTER THE REPORTING DATE.
On 24 July 2017 at the Company's AGM, it was approved via an
ordinary resolution to consolidate every 20 existing ordinary
shares into one new ordinary share.
The consolidation has been structured in such a way so that each
of the new ordinary shares created shall have a nominal value of
0.20p each. This was achieved by a consolidation of every 20
existing ordinary shares into 1 new ordinary share. Such new
ordinary shares will have the same rights and be subject to the
same restrictions (save as to par value) as the existing ordinary
shares. As a result the Company now has 392,337,801 New Ordinary
Shares in issue.
4 A copy of this interim statement is available on the Company's
website www.solooil.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PGUQUBUPMGBM
(END) Dow Jones Newswires
September 28, 2017 02:01 ET (06:01 GMT)
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