26 Nov 2018 07:00
Anglo African Oil & Gas PLC / Index: AIM / Epic: AAOG / Sector: Oil & Gas
ANGLO AFRICAN OIL & GAS PLC ('AAOG' or the 'Company')
26 November 2018
Resumption of Drilling
Compensation from the Drilling Contractor
Resumption of drilling
Anglo African Oil & Gas plc, an independent oil and gas developer, is pleased to announce that drilling operations have now recommenced on well TLP-103C ('TLP-103C' or 'the Well') at its Tilapia site in the Republic of the Congo.
Following an unscheduled rig inspection by AAOG staff on site where an issue was detected on the elmagco brake system, drilling was suspended to allow for the rig company (SMP) to remove these parts and for them to be repaired. These parts had met testing requirements during the pre-spud third-party rig inspection but performance had subsequently diminished. The parts in question have now been repaired and reconditioned in Paris by the drilling contractor and reinstalled to the rig.
The Company confirms that suspension occurred before intersection of any of the target horizons being the R1/R2, Mengo and Djeno. Had the parts failed further into the drilling programme then the effect could have been materially adverse.
Drilling recommenced at a depth of 660 metres, and AAOG expects to reach TD toward the end of December. The Company will provide periodic updates as it receives results from the target horizons in line with Congolese regulations.
Compensation from the Drilling Contractor
The drilling contractor, SMP, have accepted that this delay is entirely their fault and have agreed that, in addition to the rig being on zero rate during the delay, they will compensate AAOG for a substantial amount of AAOG's additional costs which have been incurred with respect to this delay. The mechanism for this compensation is through a significantly reduced day rate for the rig going forward.
David Sefton, Executive Chairman, commented: "This delay has been extremely frustrating not only for the Company but, more importantly, for its shareholders. However, it was clearly the right decision for AAOG to insist on a suspension of drilling pending these repairs rather than risk a serious incident should those parts have failed when intersecting a target horizon. We have had open and frank discussions with SMP and we are assured by them that we should not expect any further issues with the rig and look forward to announcing our results in due course."
**ENDS**
Market Abuse Regulation (MAR)
Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.
For further information please visit www.aaog.co or contact:
Anglo African Oil & Gas plc | Tel: c/o St Brides Partners +44 20 7236 1177 |
David Sefton, Executive Chairman James Berwick, Chief Executive Officer |
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finnCap Ltd (Nominated Adviser and Broker) |
Tel: +44 20 7220 0500 |
Christopher Raggett, Giles Rolls, Anthony Adams (Corporate Finance) |
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Camille Gochez (Corporate Broking) |
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St Brides Partners (Financial PR) | Tel: +44 20 7236 1177 |
Frank Buhagiar, Juliet Earl |
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Notes to Editors
Anglo African Oil & Gas (AAOG) is an AIM-listed independent oil and gas company that owns a 56% stake in the producing Tilapia oil field in the Republic of the Congo. The Company boasts a low-cost production story in a prolific hydrocarbon region with significant exploration upside, differentiating it substantially from its E&P peers. Additionally, management's remuneration is tied to hitting production milestones, reflecting their strong focus on cost control.