Solo Oil Plc Update on Tanzania Acquisition (9776Z)
December 17 2014 - 2:00AM
UK Regulatory
TIDMSOLO
RNS Number : 9776Z
Solo Oil Plc
17 December 2014
17 December 2014
Solo Oil plc
("Solo" or the "Company")
Update - acquisition of interest in Kiliwani North Gas Field,
Tanzania
Solo Oil plc (AIM: SOLO) has been advised by Aminex PLC
("Aminex") that, further to the Company's announcement of 11
November 2014, Aminex has now received confirmation from the
Tanzanian Ministry of Energy and Minerals that the Minister has no
objection to the proposed assignment in the sale of up to a 13%
interest in the Kiliwani North Development Licence ('KNDL') to Solo
for a total consideration of $7 million.
Completion of the initial 6.5% interest now remains subject only
to a formal Deed of Assignment being signed by all participating
parties. Solo and Aminex have agreed to extend the deadline on the
purchase of the initial and additional 6.5% to 30 January 2015 as a
result of the longer than expected time taken to obtain the no
objection notification.
The KNDL contains the Kiliwani North-1 ("KN1") well, which is
expected to start production at approximately 20 mmcfd in early
2015. Once the Deed of Assignment is complete and if Solo elects to
take up its full 13% entitlement, the KNDL joint venture partners
will be Ndovu Resources Ltd. (Aminex) 52% (operator), RAK Gas 25%,
Bounty Oil 10% and Solo 13%.
Once producing, KNDL will represent a major milestone for Solo
by providing first revenues to the Company from its Tanzanian
assets. Independently verified resources at KNDL are estimated to
be 45 billion cubic feet of gas in place. Construction of a 2 km
pipeline from KN1 wellhead to the new Songo Songo processing plant
has now commenced and is expected to be completed by the end of
2014.
Aminex has also reported that a Gas Sales Agreement for KNDL is
largely complete and is expected to be signed prior to the
commissioning of the 2 kilometre pipeline and the Songo Songo
processing plant in early 2015.
Aminex and Solo are already partners in the Ruvuma Production
Sharing contract in Tanzania, with respectively 75% and 25%
interests, where gas was discovered in 2012 at Ntorya-1. Ndovu is
the operator of both the Ruvuma Production Sharing Agreement and
the KNDL.
Neil Ritson, the Company's Chairman, commented:
"The final step in the process of receiving approvals to our
acquisition of an interest in the soon to be producing Kilwani
North development has now been received and we look forward to
signature of the gas sales agreement and to the start-up of the
production in 2015."
The key terms of Solo's KNDL acquisition are set out below:
1. The Initial Acquisition, as announced on 14 October 2014,
consisted of a cash payment of US$3.5 million for 10% of Aminex's
65% interest in KNDL, representing a 6.5% interest in the entire
KNDL, payable initially as a refundable deposit of US$250,000
within 7 days of 13 October 2014, which has been paid. The balance
of US$3.25 million becoming payable upon completion of the formal
acquisition agreement. Aminex and Solo have mutually agreed to
extend the deadline on the Initial Acquisition to 30 January
2015.
2. The Second Acquisition will consist of an option by Solo to
acquire a further 10% of Aminex's 65% interest in KNDL (a further
6.5% interest in the entire KNDL) on the same terms as the Initial
Acquisition. Aminex and Solo have mutually agreed to extend the
deadline on the Second Acquisition of 6.5% to 30 January 2015.
Competent 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 35 years of relevant experience in the oil industry.
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.
Glossary:
mmscfd - million standard cubic feet of gas per day
For further information:
Solo Oil plc
Neil Ritson +44 (0) 20 7440 0642
Beaumont Cornish Limited
Nominated Adviser and Joint
Broker
Roland Cornish +44 (0) 20 7628 3396
Old Park Lane Capital Plc
Joint Broker
Michael Parnes +44(0) 20 7493 8188
Shore Capital
Joint Broker
Pascal Keane +44 (0) 20 7408 4090
Jerry Keen (Corporate Broker)
Bell Pottinger
Public Relations
Henry Lerwill +44 (0) 20 3772 2500
This information is provided by RNS
The company news service from the London Stock Exchange
END
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