22 Apr 2010 07:00
FOR IMMEDIATE RELEASE 22 April 2010
Solo Oil Plc
("Solo" or "the Company")
Exercise of Option with Aminex on Ruvuma Basin, Tanzania
22 April 2010 - Solo Oil Plc ("Solo") advises that pursuant to the Farmout Agreement dated 14 December 2009 between Aminex Plc's ("Aminex") subsidiary Ndovu Resources Ltd. ("Ndovu") and Solo Oil PLC ("Solo") for participation in the Likonde-1 well in Tanzania, Solo now hereby gives notice that it intends to exercise its option to take up a 12.5% interest in the Ruvuma PSA and in the Joint Operating Agreement between Ndovu and Tullow Oil (operator). Completion of the exercise of option is subject to:
·; Execution of a Deed of Assignment of interest from Ndovu to Solo.
·; Formal approval of the Deed of Assignment by the Tanzanian authorities.
·; Confirmation of the Deed of Assignment from Tullow Oil which has already waived its pre emptive rights.
The market will be advised when these items are completed.
As previously announced on the 16 November 2009, Solo successfully completed a financing of £6.4 million ("the Placing") and had signed a Farm-out Agreement with London Main Market listed Aminex to earn a 12.5% interest in the Likonde-1 well in Tanzania.
Under the terms of the farm-out agreement Solo would reimburse Aminex for 12.5% of pre-drilling costs and pay 18.75% of the drilling cost of Likonde-1 amounting to about £3m million.
After the drilling of Likonde-1, Solo earned the right to participate in any further drilling on the licences covered by the Ruvuma PSA through contributing 12.5% of ongoing costs. On exercising this right, Solo would then become a full party to the Ruvuma joint operating agreement with Tullow (operator) owning 50% of the Lindi and Mtwara blocks in partnership with Aminex (37.5%) and Solo (12.5%).
The November 2009 £6.4 million Placing proceeds were to provide the Company with the funds to pursue its new investing policy as approved by shareholders on 17 July 2009 and were used to farm in to the Likonde- 1 well.
The balance of the Placing funds will now be used to fund 12.5% of the ongoing costs on the Rovuma Licenses with the second well expected to cost around £1.3 million and to seek out further investments in the oil and gas sector.
Information on the Ruvuma PSA
The Ruvuma PSA covers 12.360 sq kilometres in the extreme south-east of Tanzania of which roughly 80% is onshore and 20% offshore. Within the PSA are two specific, adjoining licence areas, known as Lindi and Mtwara. The first well under the Ruvuma PSA has been drilled on the Likonde prospect.
As announced on the 1st April 2010, the Likonde-1 well, onshore Tanzania, encountered thick sands with hydrocarbon shows.
Likonde-1 is located in the Lindi Block in the Ruvuma Basin of Southern Tanzania. The well was drilled to a total depth of 3,647 metres and results of drilling, wireline logs and side-wall coring showed that the well intersected two sandstone intervals of over 250 metres (820 feet) combined thickness with evidence of residual oil and gas. Drilling had to be terminated in the deepest objectives due to high gas influx.
The well, which was plugged and abandoned, is the first of a two-well programme within the prospective Ruvuma delta region. The encouraging results will be followed up with detailed technical work prior to selecting the next drilling location.
Solo's Chairman David Lenigas commented:
"Solo is excited about exercising its option with Aminex on the Ruvuma Licences. The result from Likonde-1 represents a major step forward in establishing the potential of the Ruvuma Basin. Solo has sufficient funds in treasury to be an active partner in the next phase of work and drilling in Tanzania."
For further enquiries:
Solo Oil PLC: +44 (0) 20 7016 5100 David Lenigas/Kiran Morzaria
Beaumont Cornish - Nominated Adviser +44 (0) 20 7628 3396 Roland Cornish
Astaire Securities: +44 (0) 20 7448 4400
Jerry Keen/Toby Gibbs