LONDON (Alliance News) - Solo Oil PLC on Tuesday said its loss was wider in 2015 after the majority of its costs rose compared to 2014 levels and said its investments in Tanzania continue to offer the best chance of returning value to the business.
The company reported a pretax loss of GBP2.8 million in 2015 compared to the GBP1.8 million loss in the previous year as finance costs, provisions and impairments all increased. Solo Oil made no revenue in either year.
Impairments amounted to GBP875,000 in 2015, up from GBP400,000 in 2014, whilst finance costs increased to GBP386,000 from GBP84,000. Provisions against financial instruments were higher at GBP606,000, compared to GBP261,000.
Costs related to administrative work was the only area to fall year-on-year, totalling GBP906,000 in 2015 compared to GBP1.1 million in 2014.
Solo Oil is involved in a series of projects, including the Kiliwani North development and the Ruvuma production sharing agreement, which homes the Ntorya gas-condensate discovery in Tazania, as well as the Horse Hill project near Gatwick Airport in the UK.
"The company's holdings in the Kiliwani North Development licence (KDNL) and its 25% stake in the Ruvuma PSA continue to represent the most significant investments the company has made and their further development is being actively pursued. Appraisal drilling of the Ntorya gas condensate discovery will potentially unlock substantial additional value, whilst the KNDL gas production will lead to revenues in the coming months," said Solo Chairman Neil Ritson.
"The Horse Hill-1 well has added significant additional value to the company, containing both a commercial conventional Portland Sandstone discovery and a major new play in the Kimmeridge Limestones that has very significant potential," he added.
Elsewhere in the portfolio, Solo has interests in an onshore licence in the Isle of Wight, a string of petroleum leases in Ontario, Canada, and also holds investments in Pan Minerals Oil & Gas AG, based in Nigeria, and Toronto-listed Maxim Resources, which operates in Morocco.
"This platform for future growth will be broadened and deepened in 2016 and 2017 as the company receives revenue from Kiliwani North and looks to further enhance its position in new plays and increased the diversity of the portfolio," said Ritson.
Fellow London-listed Aminex PLC is the operator of Kiliwani North, which is within the commissioning phase that will see production rise from current levels after the pair produced their first gas from the asset in early April.
The two London-listed companies began producing gas from Kiliwani North on April 6, and production from the asset is expected to increase up to 30.0 million standard cubic feet of gas per day during the commissioning phase, which is equal to around 4,000 to 5,000 barrels of oil equivalent per day.
Previously, the pair said production would rise to a range of 25.0 million to 30.0 million standard cubic feet. All production is currently coming from the Kiliwani North-1 well.
Solo Oil shares were trading down 4.3% to 0.220 pence per share on Tuesday.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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