AAOG.L Share News (AAOG)

(Sharecast News) - Independent oil and gas developer Anglo African Oil & Gas has entered into a rig option agreement with Société de Forage Pétroliers (SFP) for the provision of a rig to carry out drilling operations on well TLP-103C-ST at the Tilapia field, in which it has a 56% interest, it announced on Tuesday.
The AIM-traded firm said the rig agreement gave it the right to contract the rig for TLP-103C-ST and a further four wells at its call.

It said the SFP #1 rig was the subject of contractual commitments to an unnamed super-major, which would expire on 30 December.

SFP could extend such contractual commitments until, but not beyond, 30 March, and would notify Anglo African on or before 30 November as to whether its contractual commitments had been extended.

As a result, drilling operations at TLP-103C-ST could begin in either the first or second quarters of 2020, dependent on the rig's current commitments.

Anglo African said it would update shareholders and the market once there was more certainty on timing.

The operational plan was to re-enter the existing TLP-103C well and drill the new sidetrack just below the Mengo formation, to test the Upper Djeno and explore the Middle Djeno formations, the board explained.

It said the objective was to determine whether the Djeno could be brought into production from either horizon.

Anglo African cautioned that drilling activity "is never without risk, but explained that it believed the sidetrack operations had an attractive risk-reward profile.

TLP-103C had already proven the geological model, and confirmed the presence of the Djeno at Tilapia.

The fallback plan was to produce TLP-103C from the Mengo formation, the board said.

"We are very pleased to have entered into the rig agreement, and look forward to commencing operations at TLP-103C-ST as soon as the rig becomes available," said chief executive officer James Berwick.

"The rig is the most suitable rig available in country and will come to TLP-103C-ST directly from drilling operations for a super-major.

"The board of AAOG appreciate that drilling operations will commence later than we had hoped but, following the problems encountered in drilling TLP-103C, it was important that we found the right rig for this drilling campaign to avoid any similar issues."

At 1604 GMT, shares in Anglo African were down 4.76% at 3p.