1 Feb 2016 07:01
FOR IMMEDIATE RELEASE, 7.01am 1 February 2016
SOLO OIL PLC
("Solo" or the "Company")
Update on Kiliwani North, Tanzania
Solo has been advised by operator Aminex PLC ("Aminex") that the Kiliwani North-1 well is currently undergoing final well integrity testing prior to first production. This follows the signing of a Gas Sales Agreement ("GSA") in January. The gas price agreed in the GSA of $3.00 per million BTU (approximately $3.07 per thousand cubic feet) is indexed-linked to the US consumer price index and therefore not reliant on global oil prices. The Company will be paid in US Dollars for all produced gas including commissioning and testing gas.
Solo understands that Aminex has been advised by the Tanzanian Petroleum Development Corporation to prepare the Kiliwani North-1 well for production starting mid-February. Initial production rates will be managed to allow for testing and commissioning of the recently completed Songo Songo gas processing plant and related pipelines, while also recording critically important pressure and flow rate measurements to determine the optimal flow rate to maximize the life of the reservoir.
Solo currently holds a 6.175% interest in the Kiliwani North Development Licence where the Kiliwani North-1 well is located and also an option to acquire a further 6.175% interest in the Kiliwani North Development Licence.
LR Senergy has ascribed gross 28 billion cubic feet best estimate contingent resources to Kiliwani North-1, which was contingent on completion of the GSA. It is therefore Solo's expectation that reserves at Kiliwani North will be booked later this year.
Neil Ritson, Solo's Chairman, commented:
"Solo is delighted that the momentum of the Kiliwani North project is being maintained after the signing of the GSA and we anticipate being able to report first gas and receipt of first revenue in the comings months."
Current participants in the Kiliwani North Development Licence, following TPDC back in, are: Ndovu Resources Ltd (Aminex) 55.575% (operator), RAK Gas LLC 23.75%, Solo Oil plc 6.175%, Bounty Oil & Gas NL 9.05% and TPDC 5%.
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:
bcf | billion cubic feet |
best estimate | an estimate representing the best technical assessment of likely projected volumes. Often associated with a central (2C), P50 or Pmean value |
BTU | British Thermal Units |
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 |
GSA | gas sales agreement |
mcf | thousand cubic feet |
mmscfd | million standard cubic feet of gas per day |
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 |