AAOG.L Share News (AAOG)

(Sharecast News) - Independent oil and gas developer Anglo African Oil & Gas updated the market on its operations at well TLP-103C on Wednesday, which was currently being drilled on the Tilapia field in the Republic of the Congo.It also announced that it has entered into a conditional £5m convertible loan note financing facility with Sandabel Capital.As it had previously reported, well TLP-103C spudded on 8 October at a newly constructed pad about 95 metres north-west of TLP-103.The first section of TLP-103C was drilled successfully, with the casing set and cemented.Drilling of the second section of TLP-103C had now commenced.Anglo African said the well did not encounter any of the shallow unconsolidated formations intersected in the TLP-103 well, but the the additional mitigation procedures and measures put in by the company still remained in place.Drilling of TLP-103C was currently performing in line with the schedule previously announced, with the company saying it expected to have reached all three principal target horizons before the end of November."At this stage, the formations encountered are consistent with the company's geological model," the board said in its statement.Anglo African also completed an assessment of the current rig market and, as a result, held discussions with the current drilling contractor - Société de Maintenance Pétrolière (SMP) - in order to secure an option to keep the current rig, SMP-102, on site at Tilapia to drill a potential further well, TLP-104.That would be the second well in the anticipated six-well development plan."This plan will be reviewed following the completion of TLP-103C and informed by the results of that well," the board explained."SMP has agreed in principle for SMP-102 to remain on site, which would result in significant mobilisation/demobilisation cost savings for the company."Anglo African said it would continue to inform the market of drilling progress.On the financial front, the company announced on 7 September that it had received several offers of debt facilities to provide future funding flexibility where needed for the TLP-103C well and for working capital.It said the new financing facility provided it with an unsecured facility of up to £5m which, subject to certain limited restrictions, could be drawn down at any time over the next 12 months.The timing and value of any drawdown was at the agreement of the company and Sandabel, with the principal amount of each drawdown required to be £50,000, or a multiple thereof."I am very pleased that the drilling of TLP-103C continues to proceed well, and in particular that the geological conditions are as expected in the geological model and drilling plan," said Anglo African executive chairman David Sefton."The team are making excellent progress and it will not be long before the initial results will be known."Sefton said he was also pleased that SMP had agreed in principle to keep its rig on site and work with the company on TLP-104."The team has worked tirelessly in order to break in a new crew and iron out the technical issues encountered as a result of the rig being cold stacked."It is also positive that we have been able to finalise a financing facility in line with the terms previously disclosed and, in particular, that the company has been able to secure debt finance without the need to issue warrants and, furthermore, with the flexibility that will likely allow some of this facility to be repaid as conventional debt."