26 Aug 2015 07:00
FOR IMMEDIATE RELEASE, 7 am 26 August 2015
SOLO OIL PLC
("Solo" or the "Company")
Tanzania Update
Solo is pleased to provide an update on its assets in Tanzania which are operated by Aminex plc ("Aminex") who have released an interim statement today.
Neil Ritson, Solo's Chairman, commented:
"Considerable progress has been made recently in Tanzania and we expect to have news of both commercial gas sales at Kiliwani North and appraisal drilling in the Ntorya gas discovery shortly. The imminent commencement of gas sales at Kiliwani North represents our first revenue generating investment in Africa and is eagerly awaited by the Company and its shareholders."
Kiliwani North
The Kiliwani North-1 gas well, which tested at 40 mmscfd, has been completed and is now ready to produce. Initial gas production will enable the pipeline operator to pressure-test the short spur line between the wellhead and the new gas plant with gas sales expected in third quarter 2015. Following an engineering review by the operator, it is anticipated that a sustained production rate of up to 30 mmscfd can be obtained, which is higher than the previously planned 20 mmscfd and this will optimise the economics and the life of the reservoir.
A Gas Sales Agreement ("GSA") is near completion, but the operator awaits the finalisation of payment protection clauses and guarantees prior to final signature. First commercial gas from Kiliwani North will be delivered into a 36-inch regional pipeline system, the construction and pressure testing of which is now complete. The pipeline operator has constructed a sales pipeline from Kiliwani North to the nearby processing plant at its own cost with the operator responsible for supplying and installing a gas metering unit. The Company will sell its production at the wellhead, greatly simplifying commercial and management issues and allowing for low operating and production costs. Production into this new pipeline system has now commenced from other fields in the south of the country. Gas from Kiliwani North will result in Solo's first commercial production in Africa.
Solo holds an option to increase its interest in the Kiliwani North Development Licence by 6.5% to a total of 13% once the GSA is signed for a further payment of US$3.5 million to Aminex.
Participants in the Kiliwani North Development Licence are currently: Ndovu Resources Ltd (Aminex) 58.5% (operator), RAK Gas LLC 25%, Solo Oil plc 6.5% and Bounty Oil & Gas NL 10%.
Ruvuma PSA
The Ruvuma PSA located largely onshore in southern Tanzania provides Solo with a combination of exploration and appraisal activity.
In 2012 the Ntorya-1 discovery well in the Ruvuma PSA tested 20 mmscfd together with 139 barrels of associated condensate. In May 2014 the operator completed a 2D seismic programme to appraise the Ntorya-1 discovery and to generate drilling targets. Interpretation, mapping, and resource estimates have been updated and new drill locations have now been identified based on the results of the new and reprocessed seismic data. An updated resource report by LR Senergy, completed in May 2015, has assigned best estimate contingent resources of 70 bcf to the Ntorya-1 gas discovery. The "up-dip" part of Ntorya, in addition to the gas discovery, has been ascribed a further 945 Pmean bcf gas in-place for a total of 1.1 tcf Pmean gas in-place for the greater Ntorya gas field.
Several well locations have been identified from the new seismic mapping, including the Ntorya-2 and Ntorya-3 appraisal wells as well as Likonde-2 and Namisange-1 exploration wells. Aminex has contracted North Sea Well Engineering Ltd to manage the Ntorya-2 and Ntorya-3 well planning, which is currently ongoing. The proposed Ntorya-2 well, located just west and up-dip of Ntorya-1, is expected to be spudded by first quarter 2016. Both the Ntorya-2 and Ntorya-3 wells are expected to test additional exploration targets in addition to appraising the gas discovery.
The key to unlocking the commercial potential for these opportunities in Ruvuma PSA is the new 36-inch common-user gas pipeline which runs from the south of Tanzania to Dar es Salaam. The pipeline and all associated facilities are likely to become operational during third quarter 2015 and will provide a means of marketing any further gas discoveries at Ruvuma through a gas sales agreement with the Tanzanian authorities.
Participants in the Ruvuma PSA are: Ndovu Resources Ltd (Aminex) 75% (operator) and Solo Oil plc 25%.
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 the energy sector. Mr. Ritson is a member of the Society of Petroleum Engineers, an Active Member of the American Association of Petroleum Geologists and is a Fellow of the Geological Society of London.
For further information:
Solo Oil plc Neil Ritson Fergus Jenkins | +44 (0) 20 3794 9230 |
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Beaumont Cornish Limited Nominated Adviser and Joint Broker Roland Cornish | +44 (0) 20 7628 3396 |
Shore Capital Joint Broker Pascal Keane Jerry Keen (Corporate Broker)
Bell Pottinger Public Relations Henry Lerwill
Cassiopeia Services LLP Investor Relations Stefania Barbaglio |
+44 (0) 20 7408 4090
+44 (0) 20 3772 2500
+44 (0) 79 4969 0338 |
Glossary:
2D | two-dimensional |
bcf | billion cubic feet |
best estimate or Pmean | an estimate representing the best technical assessment of likely projected volumes. Often associated with a central (2C), P50 or Pmean value |
contingent resources | those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations, but the applied project(s) are not yet considered mature enough for commercial development due to one or more contingencies |
discovery | a discovery is a petroleum accumulation for which one or several exploratory wells have established through testing, sampling and/or logging the existence of a significant quantity of potentially moveable hydrocarbons |
gas initially in place or GIIP | the quantity of gas that is estimated to exist originally in naturally occurring accumulations before any extraction or production |
GSA | gas sales agreement |
mmscfd | million standard cubic feet of gas per day |
PSA | petroleum sharing agreement |
recovery or recoverable | the quantity or portion of petroleum, here gas, initially-in-place that can be extracted by a well or wells to the surface |
reserves | reserves are defined by the SPE as those quantities of petroleum, here oil and gas, which are anticipated to be commercially recovered from known accumulations from a given date forward |
tcf | trillion cubic feet |