Solo Oil Plc SPA Signed, Kiliwani North, Tanzania (9631T)
April 04 2016 - 2:00AM
UK Regulatory
TIDMSOLO
RNS Number : 9631T
Solo Oil Plc
04 April 2016
FOR IMMEDIATE RELEASE, 7 am 4 April 2016
SOLO OIL PLC
("Solo" or the "Company")
SPA Signed, Kiliwani North, Tanzania
Solo today announces that further to the agreements previously
announced with Aminex plc ("Aminex") to acquire a further interest
in the Kiliwani North Development Licence ("KNDL") Solo has now
executed a Sale and Purchase Agreement ("SPA") for the acquisition
of a 3.825% interest in Kiliwani North Development Licence ("KNDL")
to Solo Oil plc ("Solo") for a total cash consideration of US$2.16
million.
Under the terms of the SPA Solo's interest will increase through
three payment tranches to Aminex, linked to project milestone, for
the total agreed cash consideration:
-- Initial investment of US$566,802 for an additional 1%
interest on signature of the SPA, increasing Solo's total interest
from 6.175% to 7.175%
-- A second investment of US$708,502 for a further 1.25%
interest within 15 days of the first US dollar payment being
received for gas from Kiliwani North-1 ("KN-1"). Solo's total
interest will increase to 8.425%
-- A third investment for the balance of US$892,712 for an
additional and final 1.575% interest within 15 days of the
commercial operations date being declared, taking Solo's total and
final interest to 10%.
If any payment is missed then that payment option, and only that
option, will be automatically cancelled. Payment of the second and
third investments will require further funding from cash flow or
otherwise to be arranged by Solo.
Following full payment of the consideration, Solo's interest
will increase from its current 6.175% to a 10% interest in KNDL. As
announced on 11 February 2016, the transaction represents the part
exercise of its pre-existing option to acquire a further 6.175%
interest. The remaining entitlement under the option agreement has
now expired.
The KN-1 well, which is now ready to begin production, has been
ascribed gross contingent resources (2C) of gross 28 billion cubic
feet by LR Senergy and the Company expects to book reserves from
this well by the year-end. Gas from KN-1 will be sold to the
Tanzania Petroleum Development Corporation ("TPDC") under a gas
sales agreement ("GSA") at the wellhead for an agreed price of
US$3.00 mmBTU (approximately US$3.07 per mscf), payable in US
dollars. The gas price is not linked to any commodity price so is
unaffected by current commodity market conditions.
Gas will be processed at the new Songo Songo Island gas plant
and will ultimately be transported by pipeline to Dar es Salaam,
where it will be sold into the local Tanzanian market.
Neil Ritson, Solo's Chairman, commented:
"Solo is delighted to increase its exposure to the KNDL project
with commencement of production imminent. The project offers a
revenue stream that will increase through the commissioning process
and into commercial production under the GSA which has take-or-pay
provisions and is paid in US Dollars guaranteed by a consortium of
banks. By linking the acquisition of our additional interest to
project milestones we have been able to further de-risk the
investment."
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 9.5% and TPDC 5%. On completion of the payments
envisaged by 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
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
--------------------- -----------------------------------------------------------------------------------------------
SPA sale and purchase agreement
--------------------- -----------------------------------------------------------------------------------------------
US$ United States of America dollars
--------------------- -----------------------------------------------------------------------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
AGRUGUWPCUPQGAG
(END) Dow Jones Newswires
April 04, 2016 02:00 ET (06:00 GMT)
Scirocco Energy (LSE:SCIR)
Historical Stock Chart
From Apr 2024 to May 2024
Scirocco Energy (LSE:SCIR)
Historical Stock Chart
From May 2023 to May 2024