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LONDON (Alliance News) - Solo Oil PLC Tuesday said it has signed a deal with Aminex PLC to buy up to 13% of the Kiliwani North Development Licence in Tanzania.
Solo said it would buy an initial 6.5% interest in the licence from Aminex-owned Ndovu Resources Ltd for USD3.5 million. The company also holds a 45-day option to increase its interest in the licence by a further 6.5% to 13%.
The field includes the Kiliwani North 1 well, which is forecast to produce at an approximate rate of 20 million cubic feet of gas per day in the first half of next year, Solo said. The deal would give Solo its first revenue from Tanzania, it said.
Ndovu is currently in advanced negotiations for a gas sales agreement with the Tanzanian authorities, and these talks are expected to conclude in coming weeks, Solo added.
"This acquisition significantly increases Solo's exposure to the rapidly developing Tanzanian gas sector and will provide valuable revenue for many years from the soon to be commissioned Kiliwani Gas Field on Songo Songo Island," said Solo Executive Director Neil Ritson.
"Solo and Aminex are continuing to work together to commercialise the exciting multi-tcf Ntorya discovery and participation in Kiliwani North provides valuable near-term revenue and insights into the Tanzanian gas market," Ritson added.
"This disposal of a minority interest in Kiliwani North to Solo, which expands on the existing close partnership between Solo and Aminex in the Ruvuma basin, is an important step towards the Company's objective of paying down all outstanding corporate debt," said Aminex Chief Executive Officer Jay Bhattacherjee.
"Once this objective has been achieved, Aminex will be in a strong position to expand its operations in Tanzania and elsewhere," Bhattacherjee added.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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