SOLO.L Regulatory News (SOLO)

FOR IMMEDIATE RELEASE, Embargoed until 7 am 22 March 2017

SOLO OIL PLC

("Solo" or the "Company")

Investment in Helium Project, Tanzania

and Subscription

Solo Oil plc (AIM: SOLO), the natural resources investment company focused on acquiring and developing a diverse global non-operated portfolio of strategic oil and gas assets is pleased to announce that it has agreed to acquire a 10% interest in Helium One Limited ("Helium One") for a total consideration of £2.55 million (the "Initial Investment"). Solo has also been granted a 90-day call option to increase its investment in Helium One by a further 10%, for an additional investment of £4 million, which would increase its stake to 20%.

The Company has additionally raised £1.2 million (gross) by means of a Company arranged subscription (the "Subscription") with institutional and private investors.

Highlights:

· Initial Investment of £2.55 million for a 10% interest in Helium One, by way of £1.2 million in cash and £1.35 million through issuing new Ordinary Shares

· Call option to increase interest in Helium One to 20% by a further investment of £4 million by way of £2 million in cash and £2 million through issuing new Ordinary Shares ("Call Option")

· Early entry into the global helium market estimated to be worth US$6 billion annually

· Positive macro drivers for helium markets, driven by a depleting supply and simultaneous demand growth, result in strong pricing dynamics

· Helium One's Rukwa Project in Tanzania has independently estimated by Netherland, Sewell and Associates Inc. ("NSAI") to contain unrisked most likely prospective recoverable helium volumes close to 100 billion cubic feet ("bcf")

· Expands Solo's existing presence in Tanzania which includes gas production from Kiliwani North and a 25% working interest in the Ntorya gas-condensate discovery

Neil Ritson, Solo's Chairman commented:

"Solo has successfully invested in bringing several gas projects to market in Tanzania which are now reaching maturity from an investment viewpoint. Given the related pricing of petroleum gas and helium, which is globally in short supply, Solo has for some time been investigating opportunities in the helium sector. Helium One's portfolio of prospective helium projects in Tanzania provide Solo with a unique early stage investment into a potentially world-scale helium resource. The Company believes that Rukwa, together with Helium One's additional project areas at Eyasi and Balangida, represent an attractive strategic investment, especially given the helium market's weak supply dynamics and continued demand growth."

The global helium market is anticipated to see a sharp drop in supply in the next five years as the US Strategic Reserve ceases sales, and with helium's increasing use in modern life, such as MRI scanners, Solo has identified Helium One's world-class assets in Tanzania as a compelling and complementary investment for Solo's portfolio of oil and gas investments. This transaction is consistent with Solo's investing policy, utilises Solo's existing skills base and further diversifies Solo's portfolio in Tanzania where Solo has a proven track record.

Helium One is an independent specialist explorer focussed on being a major supplier into the global helium markets estimated to be worth approximately US$6 billion annually. The company benefits from an experienced Board with extensive in-country and industry experience. Helium One holds twenty-three Helium Prospecting Licences in Tanzania, including licences over the Rukwa Project with a most likely unrisked prospective recoverable helium volume of 98.9 bcf (as reported by NSAI)."

Helium Markets 

Global demand for helium is growing at a rate that is outstripping supply, which presents a significant pricing opportunity for future producers.

Helium supply is concentrated in only a few markets globally, mainly Algeria, Australia, Russia, Qatar and the USA. The USA dominated the market throughout the twentieth century, however, with the US government's decision to relinquish control of its assets, the majority of global helium production will come as a by-product from other gas producing streams. Naturally occurring helium rich assets present considerable advantages in meeting growing market demand. Tanzania has been identified as a key country for helium exploration based on the evidence of surface gas seeps in the geological rift valleys adjacent to the Tanzanian Craton, as well as its strategic location for global exports through its deep-water port at Dar es Salaam.

The use of helium is essential in many modern industries, ranging from cryogenics (including use in MRI scanners), to lifting and electronic applications. As these industries grow, in conjunction with many others, the demand for helium which has been rising rapidly for the last decade is set to continue. Helium cannot be readily substituted due to its unique properties being inert, non-toxic, and lighter than air and with an incredibly low boiling point of minus 269 degrees centigrade (just 4 degrees above absolute zero).

Details of Investment

Initial Investment

The Initial Investment is for 10% of the post-money issued capital of Helium One. The consideration totalling £2.55 million is comprised £1.2 million in cash and £1.35 million payable by the issue to Helium One of such number of fully paid ordinary shares in Solo ("Consideration Shares") at a Solo share price equal to the five trading day VWAP immediately prior to the issue of those shares. The Consideration Shares will be issued subject to the terms of a standard orderly market agreement and admission to trading on AIM. The cash element payable by Solo is being funded by the Subscription as set out below.

Upon closing of the Initial Investment the Company shall grant to Solo the right to subscribe for one share for every one share subscribed for under the Initial Investment at a price of US$0.40 per share for a period of 2 years from the date of grant.

Call Option

On completion of the Initial Investment, Solo will be granted a 90 day call option to subscribe for such number of shares as will give to Solo, in addition to its existing 10% shareholding, a fully diluted percentage shareholding in Helium One on the date of exercise of the option of 10% of its issued share capital (the "Call Option"). The Call Option exercise price shall be payable as to £2.0 million in cash and £2.0 million by the issue to Helium One of such number of fully paid ordinary shares in Solo ("Option Consideration Shares") at a Solo share price equal to the five trading day VWAP immediately prior to the issue of those shares. The Option Consideration Shares will be issued subject to the terms of a standard orderly market agreement and approval by general meeting of shareholders for appropriate share authorities.

Upon exercising the Call Option Helium One shall grant to Solo the right to subscribe for one share for every one share subscribed for under the Call Option exercisable for a period of 3 years from the date of grant with an exercise price of US$0.70 per share.

Further Information on Helium One

Rukwa is Helium One's most advanced asset and is actively being developed with the objective of installing a world scale helium production facility. The Tanzanian projects differ from most global resources as the helium is highly concentrated and associated with nitrogen, whereas typically helium occurs in very low concentrations and is a credit to hydrocarbons or carbon dioxide. Sampling and analysis conducted by Oxford University on behalf of Helium One has confirmed the presence of a high concentration helium-nitrogen system at Rukwa. In the United States, analogous (though low-volume) high helium-nitrogen fields have been successfully produced. Using seismic and data from earlier oil exploration, Helium One have identified numerous trapping structures with suitable reservoir and sealing formations for helium accumulation. Newly acquired soil gas geochemistry data has confirmed the helium accumulation potential in many of these structures. Studies have also been completed on process plant engineering design and routes to market including logistical analysis of transporting containers of liquid helium from site to world markets. The 2017 exploration program includes further soil geochemistry, an airborne gravity survey and an infill seismic survey. Following interpretation of these results Helium One expects to commence drilling at Rukwa in 2018. At the date of the transaction Helium One has not published any accounts.

Details of the Subscription and Consideration Shares

The Company has today raised £1,200,000 (before expenses) with institutional and private investors through a Company arranged subscription (the "Subscription") of 222,222,222 new ordinary shares of 0.01p (the "Subscription Shares") at a price of 0.54p per Subscription Share (the "Subscription Price") representing approximately 3.0 % of the issued share capital prior to Admission of the Subscription Shares. The proceeds will be used to fund the Initial Investment cash consideration.

Helium One will additionally be issued 236,842,105 shares based on the calculated five trading day VWAP of 0.57p per Consideration Share.

The Subscription and Consideration Shares are subject to admission of the Subscription Shares, which when issued will rank pari passu with the existing Ordinary Shares in issue, to trading on AIM.

Application for Admission and Total Voting Rights

Application will be made for the 459,064,327 Subscription and Consideration Shares to be admitted to trading on AIM ("Admission"). Admission is expected to occur at 8.00 a.m. on Tuesday 28 March 2017. The Subscription is conditional on Admission and the Subscription Shares will, on Admission, rank pari passu with the Company's existing ordinary shares of 0.01p each ("Ordinary Shares"). Following the issue and Admission of the Subscription and Consideration Shares, the Company's share capital will comprise 7,846,756,009 ordinary shares of 0.1p each.

The above figure of 7,846,756,009 Ordinary Shares may be used by shareholders in the Company, following the Admission of the Subscription and Consideration Shares, as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Conduct Authority's Disclosure and Transparency Rules.

Market Abuse Regulations

The Market Abuse Regulation ("MAR") became effective from 3 July 2016. Market soundings, as defined in MAR, were taken in respect of the Fundraise with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this announcement and has been disclosed as soon as possible in accordance with paragraph 7 of article 17 of MAR. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to the Company and its securities.

Qualified Person's Statement:

The information contained in this announcement has been reviewed and approved by Neil Ritson, Chairman and Director for Solo Oil plc, who has over 38 years of relevant experience in geology, resource estimation and the oil and gas industry. Mr. Ritson is a member of the Society of Petroleum Engineers (SPE), an Active Member of the American Association of Petroleum Geologists (AAPG) and is a Fellow of the Geological Society of London (BGS).

A presentation providing further details on the transaction will be made available on Solo's website: www.solooil.co.uk

For further information:

 Notes to Editors

Helium is used in hi-tech applications such as MRI scanners (currently the largest application for helium), semiconductor and optical fibre manufacturing, computer hard-drives, in the nuclear and space industries, and for lifting, such as Lockheed Martin's LMH1 hybrid airship. With around 57% market share, the US is the dominant supplier. However, the US Bureau of Land Management (BLM), which manages the world's largest helium reserve, is auctioning off an increasing percentage of the reserve annually until it falls to 3.0 bcf or until 30 September 2021, when commercial sales will cease. After that point the BLM will only supply US government users, creating a supply shortage which will force industrial consumers to look for other sources of helium. This transformation of the industry has resulted in recent bulk helium prices as high as US$200 per thousand cubic feet ("mcf"), and a domestic USA helium supply that is increasingly leveraged to primary CO2 producing fields.

Further information on the contents of this announcement can be found at www.solooil.co.uk and at www.helium-one.com

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