TIDMSOLO
RNS Number : 6093F
Solo Oil Plc
19 May 2017
FOR IMMEDIATE RELEASE, Embargoed until 7 am 19 May 2017
SOLO OIL PLC
("Solo" or the "Company")
Notice of General Meeting
and Investment Update
Solo Oil plc (AIM: SOLO), the natural resources investment
company focused on acquiring and developing a diverse global
non-operated portfolio of strategic oil and gas assets, today
posted to Shareholders a circular, notice and related documents
("the Documents") convening a General Meeting of the Company to be
held at the offices of Buchanan; 3(rd) Floor, 107 Cheapside,
London, EC2V 6DN on 8 June 2017 at 10.00 am. The Documents are
available on the Company's website www.solooil.co.uk and copies of
the Document will be available free of charge during normal
business hours on any weekday (except public holidays) from the
registered office of the Company at Suite 3B, Princes House, 38
Jermyn Street, London, SW1Y 6DN, UK from the date of this
announcement until the date of the General Meeting.
The meeting has been called to seek Shareholder approval for (i)
an update of the Company's Investing Policy in line with the
clarity prescribed by the current market guidelines, and (ii)
authority for the allotment of shares necessary to make the second
stage investment into Helium One Limited and to raise further
capital as appropriate to pursue investments potentially available
in the current market.
A letter from the Chairman extracted from the circular and
outlining the background to the resolutions is
attached in Appendix II below. Details of the resolutions can be found on the Company's website.
Investment Update
Helium One Limited
On 22 March 2017 Solo announced an agreement to acquire a 10%
interest in Helium One Limited ("Helium One or HE1"), the pure play
helium explorer in Tanzania, with an additional call option to
acquire a further 10% interest ("Second Investment") within 90
days. The first investment of 10% has been completed and in the
light of market conditions the parties have reassessed the terms of
the Second Investment. The Second Investment is intended to close
on or before 30 June 2017 with a long stop date of 31 July 2017 to
provide for any delays in certain regulatory approvals in
Tanzania.
The Second Investment exercise price has been reduced from
GBP4.0 million (GBP2.0 million in cash and GBP2.0 million by the
issue to Helium One of ordinary shares in Solo) to GBP3.0 million
in cash. Upon exercising the Second Investment Helium One will
grant to the Company the further right to subscribe for 1/4 of a
share in Helium One for every one share subscribed for under the
Call Option exercisable for a period expiring 31 December 2017 with
an exercise price of US$0.40 per share.
As announced on 9 May 2017, Helium One has completed the
acquisition of an airborne gravity and magnetics survey and has
approved the continuation of the soil and groundwater sampling
surveys, following the successful results of the first phase
sampling. Work is progressing on track for the 2018 drilling of the
Rukwa project area, where there are independently certified most
likely prospective gross in place helium volume of approximately 99
billion cubic feet ("bcf"). Current global Helium demand is
approximately 6 bcf, therefore the scale of this resource makes the
Rukwa project of strategic global importance to the future supply
for Helium over the coming decades. With limited new Helium supply
coming on stream and the shut down of the US Federal helium reserve
in 2021, Helium One is well placed to potentially become a
significant player in the global Helium market.
Ruvuma PSC, Tanzania
Following the drilling and successful testing of the Ntorya-2
appraisal well in the onshore Ruvuma Petroleum Sharing Contract
("PSC") area in Tanzania the gas associated with the Ntorya
appraisal area has been substantially increased to a most likely
discovered gross gas in place of 466 bcf. Based on this, a 25-year
development license is being sought from the Tanzanian authorities
and Solo plans to seek a partner for its future involvement in the
development so as to fund the Solo share of the development
costs.
Solo owns a 25% non-operating interest in the Ruvuma PSC, and
the Ntorya-1 and Ntorya-2 wells, which are operated by Aminex
plc.
Horse Hill Discovery, UK
As previously announced on 4 April 2017, an application for long
term production testing and further appraisal drilling was
submitted to Surrey County Council in October 2016, and is now
scheduled to be decided at the Council's planning committee meeting
in July 2017. Solo continues to anticipate that these operations
will therefore commence in the second half of 2017 upon grant of
the necessary remaining regulatory permissions.
The Horse Hill-1 well ("HH-1") Kimmeridge Limestone and Portland
Sandstone conventional oil discovery is located within onshore
exploration Licence PEDL137, on the northern side of the Weald
Basin, approximately 3 kilometres north of Gatwick Airport. As
previously reported in February and March 2016, two
naturally-fractured limestone members within the Kimmeridge
section, known as KL3 and KL4, flowed dry, 40 degree API oil, at an
aggregate stabilised natural flow rate of 1,365 barrels per day
("bopd") with no indication of depletion. The overlying Portland
flowed dry, 35-37 degree API gravity crude at a stable pumped rate
of 323 bopd. The Portland was produced at the rod-pump's maximum
achievable rate and thus flow was constrained by the pump's
mechanical capacity.
Licence PEDL137 is operated by Horse Hill Developments Limited
("HHDL") which holds a 65% interest and is the licence's operator.
Solo has a 10% ownership of HHDL which represents a 6.5% working
interest in HH-1 and PEDL137.
Neil Ritson, Solo's Chairman commented:
"Solo's original Tanzanian gas portfolio is maturing and we are
reviewing our various options with regards to monetising a portion
of the Ruvuma PSC during the development of the Ntorya gas
condensate discovery in order to fund future participation in the
licence and in doing so, extract maximum value on behalf of our
shareholders.
Ruvuma is the model case study for Solo's investment strategy in
terms of building a material position in an exciting early stage
project and then leveraging our technical capabilities to progress
the asset to a monetisation point. We are hoping to replicate this
model with the exciting opportunity with Helium One and wish to
accumulate a material interest now at an attractive pricing point.
We see very significant upside potential from the Helium One
investment and are pleased to have renegotiated the call option on
more favourable terms and hope shareholders share our excitement
for this unique investment opportunity.
The balance of this year is likely to also present several
further investment opportunities as traditional hydrocarbon markets
stabilise and additional international assets become available at
favourable valuations."
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 oil
industry. Mr. Ritson is a member of the Society of Petroleum
Engineers (SPE), an Active Member of the American Association of
Petroleum Geologists (AAPG) and is a Fellow of the Geological
Society of London (BGS).
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 +44 (0) 20 7628 3396
Shore Capital
Joint Broker
Jerry Keen
Beaufort Securities
Joint Broker
Jon Belliss
Buchanan (PR) +44 (0) 20 7408 4090
Ben Romney / Chris +44 (0) 20 7382 8300
Judd / Henry Wilson +44 (0) 20 7466 5000
Glossary
API gravity a measure of oil density. API
gravity is the inverse measure
of a petroleum liquid's density
relative to that of water, which
is designated with a value 10.
If one petroleum liquid is less
dense than another, it has a
greater API gravity
------------- ----------------------------------------
bcf billion cubic feet
------------- ----------------------------------------
bopd barrels of oil per day
------------- ----------------------------------------
discovery a discovery is 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
------------- ----------------------------------------
gas in place gas in place is the quantity
(OIP) of gas that is estimated to exist
originally in naturally occurring
accumulations before any extraction
or production
------------- ----------------------------------------
limestone a sedimentary rock predominantly
composed of calcite (a crystalline
mineral form of calcium carbonate)
of organic, chemical or detrital
origin. Minor amounts of dolomite,
chert and clay are common in
limestones. Chalk is a form of
fine-grained limestone
------------- ----------------------------------------
most likely the most likely estimate of a
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)
------------- ----------------------------------------
PEDL Petroleum Exploration and Development
License, in the UK
------------- ----------------------------------------
PSC Petroleum Sharing Contract
------------- ----------------------------------------
reservoir a subsurface rock formation containing
an individual natural accumulation
of moveable petroleum
------------- ----------------------------------------
sandstone a clastic sedimentary rock whose
grains are predominantly sand-sized.
The term is commonly used to
imply consolidated sand or a
rock made of predominantly quartz
grains
------------- ----------------------------------------
Appendix I
Expected Timetable of events
Publication of this document 19 May 2017
and posting to Shareholders
Latest time and date 10 am on 6 June 2017
for receipt of Forms
of Proxy
General Meeting 8 June 2017
Appendix II
18 May 2017
Dear Shareholders
1 Introduction
The Company has today announced the convening of a General
Meeting to propose the Resolutions in order to grant authority to
the Board to allot shares and to do so for cash on a non
pre-emptive basis and to seek Shareholders' approval for an update
to the Company's investing policy to include any oil or gas assets
and any subsurface gas assets of potential commercial significance.
The Resolutions to be proposed at the General Meeting will enable
the Board to complete the Second Stage Investment in HE1 and raise
future funds for working capital and investment.
2 Background to the Resolutions
Further to the announcement made by the Company on 22 March
2017, the General Meeting is being called in connection with the
equity investment being made in HE1. In exchange for the First
Stage Investment the Company acquired a 10 per cent interest in
HE1.
The Second Stage Investment has now been modified and will give
the Company an additional 9 per cent shareholding in HE1,
increasing its stake to 19 per cent in aggregate The modified
consideration payable is GBP3,000,000 in cash rather than
GBP4,000,000 (GBP2,000,000 in cash and GBP2,000,000 in shares) as
originally agreed. This Second Stage Investment is intended to
close on or before 30 June 2017 with a long stop date of 31 July
2017 to provide for any delays in certain regulatory approvals in
Tanzania.
3 Updated Investing Policy
The Company's current Investing Policy, adopted in July 2009, is
to acquire a diverse portfolio of direct and indirect interests in
exploration, development and production oil and gas assets, which
are based in the Americas, Europe or Africa.
To more closely reflect current market opportunities and
portfolio interests the Board propose to include investments in any
oil or gas assets and any subsurface gas assets of potential
commercial significance within its investing policy and propose the
following updated investing policy wording:
The Company's Investing Policy is to acquire a diverse portfolio
of direct and indirect interests in exploration, development and
production oil and gas assets, and any other subsurface gas assets
of potential commercial significance, located worldwide but
predominantly in the Americas, Europe or Africa.
4 The Second Stage Investment in HE1
On completion of the First Stage Investment the Company was
granted the Call Option to subscribe for such number of shares in
HE1 as will give the Company a fully diluted percentage
shareholding in HE1 on the date of exercise of the option of 19 per
cent (being 9 per cent in addition to its existing 10 per cent
shareholding in the issued share capital of HE1). The Call Option
exercise price is now GBP3,000,000 in cash exercisable on or before
30 June 2017.
Upon exercising the Call Option HE1 shall grant to the Company
the further right to subscribe for 1/4 of a share in HE1 for every
one share subscribed for under the Call Option exercisable for a
period expiring 31 December 2017 with an exercise price of US$0.40
per share.
Following completion of the First Stage Investment, the
authorities granted by the Shareholders at the Company's last
annual general meeting for the Directors to allot Shares and to do
so for cash on a non pre-emptive basis have been utilised.
Accordingly, to proceed with the proposed Second Stage Investment,
the Company is seeking to be granted new authorities as set out
below.
Section 551 of the Act (as amended) prohibits Directors from
allotting any Ordinary Shares in the Company without prior
authority from shareholders. Section 561 of the Act gives
shareholders of the Company certain rights of pre-emption on the
issue for cash of new equity securities.
The Company is therefore seeking a new section 551 authority in
respect of an aggregate nominal amount of GBP250,000 and a
disapplication of section 561 in respect of the allotment of equity
securities for cash up to an aggregate nominal amount of GBP250,000
in order to facilitate the raising of capital necessary to make the
Second Stage Investment and give the Company headroom for the
future issue of new Ordinary Shares on a non pre-emptive basis. If
such authority were to be granted, the shares would represent 31.9%
per cent of the existing issued share capital.
These Resolutions will give the Board the flexibility to raise
additional funds or make acquisitions as and when suitable
opportunities arise. In light of the current market conditions such
opportunities may arise in the near term and the authorities
requested will allow the Board the scope to act expeditiously to
take advantage of any opportunities presented. The Board seeks to
make acquisitions that are accretive to the value of the Company
and will at all times seek to avoid any unwarranted dilution in its
pursuit of the approved Investment Policy.
The Second Stage Investment is conditional, amongst other
things, on the passing of the Resolutions to be proposed at the
General Meeting and the Admission becoming effective on or before
8:00 a.m. on 30 June 2017 (but not later than 31 July 2017).
5 Business to be transacted at the General Meeting
Set out at the end of this document is a notice convening the
General Meeting of the Company to be held at 10 a.m. on 8 June 2017
at which the following Resolutions will be proposed:
5.1 an ordinary resolution to approve and adopt the updated
Investing Policy of the Company;
5.2 an ordinary resolution to authorise the Directors to allot
relevant securities pursuant to section 551 of the Act up to an
aggregate maximum nominal amount of GBP250,000; and
5.3 a special resolution to disapply the pre-emption provisions
contained in section 561 of the Act in respect of the allotment and
issue of equity securities in connection with offers to existing
Shareholders where such offer is made in proportion to existing
holdings and otherwise up to an aggregate nominal amount of
GBP250,000.
6 Action to be taken
Shareholders will find enclosed a Form of Proxy for use at the
General Meeting. Whether or not Shareholders propose to attend the
meeting, they are requested to complete and return the Form of
Proxy in accordance with the instructions printed thereon as soon
as possible and, in any event, so as to be received by not later
than 48 hours before the meeting. The completion and return of the
Form of Proxy will not prevent Shareholders from attending and
voting in person at the General Meeting should they so wish.
7 Recommendation and voting intentions
The Directors consider that the Resolutions are in the best
interests of the Company and accordingly the Directors unanimously
recommend all Shareholders to vote in favour of the Resolutions as
they intend to do in respect of their own shareholdings, amounting
in aggregate to 39,500,000 Ordinary Shares (representing 0.5 per
cent of the current issued share capital of the Company).
Yours faithfully
Neil Ritson
Chairman
Definitions used in the Chairman's Letter
"Act" the Companies Act 2006 (as amended)
"Admission" the admission of the new Ordinary
Shares to trading on AIM becoming
effective in accordance with the
AIM Rules
"AIM" AIM, a market of that name operated
by the London Stock Exchange
"AIM Rules" the AIM Rules for Companies published
by the London Stock Exchange from
time to time
"Board" or "Directors" the directors of the Company whose
names are set out overleaf
"Call Option" a call option agreement dated 21
March 2017 as amended on 18 May
2017 between HE1 and the Company
"Company" Solo Oil plc, a public limited company
with registered number 05542880
"Existing Ordinary the 7,846,756,009 ordinary shares
Shares" of 0.01p each in the Company in
issue as at the date of this document
"First Stage an investment of GBP2,550,000 for
Investment" a 10 per cent share interest in
HE1 pursuant to the Subscription
Agreement
"Form of Proxy" the form of proxy entitled "Solo
Oil plc Form of Proxy" enclosed
with this document
"General Meeting" the general meeting of the Company
convened for 8 June 2017 by the
notice set out at the end of this
document (and any adjournment thereof)
"HE1" Helium One Ltd, a company incorporated
in the British Virgin Islands with
company registration number 1888591,
whose subsidiaries hold helium prospecting
licences across a number of locations
in Tanzania
"Investing Policy" the investing policy approved by
the Shareholders
"London Stock London Stock Exchange plc
Exchange"
"Ordinary Shares ordinary shares of 0.01p each in
or Shares" the capital of the Company
"Resolutions" the resolutions to be proposed at
the General Meeting, which are set
out at the end of this document
"Second Stage an investment of GBP3,000,000 exercisable
Investment" by 30 June 2017 for an additional
9 per cent share interest in HE1
pursuant to the Call Option
"Shareholders" the holders of Ordinary Shares
"Subscription the subscription agreement dated
Agreement" 21 March 2017 between HE1 and the
Company as amended on 18 May 2017
between HE1 and the Company
This information is provided by RNS
The company news service from the London Stock Exchange
END
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