Big picture - Why invest in Solo Oil PLC
Solo Oil PLC Snapshot
The Company's Investing Policy is to acquire a diverse portfolio of direct and indirect interests in exploration, development and production oil and gas assets which are based in the Americas, Europe or Africa. Both on-shore and off-shore interests will be considered. The intention is to acquire a widely distributed mix of oil and gas development and production assets.
The Company may invest by way of outright acquisition or by the acquisition of assets, including the intellectual property, of a relevant business, partnerships or joint venture arrangements. Such investments may result in the Company acquiring the whole or part of a company or project (which in the case of an investment in a company may be private or listed on a stock exchange, and which may be pre-revenue), and such investments may constitute a minority stake in the company or project in question. The Company’s investments may take the form of equity, joint venture debt, convertible instruments, licence rights, or other financial instruments as the Directors deem appropriate.
The Company will be both an active and a passive investor. The Company intends to be a long-term investor and the Directors will place no minimum or maximum limit on the length of time that any investment may be held.
There is no limit on the number of projects into which the Company may invest, nor the proportion of the Company’s gross assets that any investment may represent at any time and the Company will consider possible opportunities anywhere in the world.
All of the Company’s assets will be held in its own name, or through wholly owned subsidiaries.
The Ruvuma PSA covers 6,079 square kilometres in the south-east of Tanzania of which roughly 80% is onshore and 20% offshore when first granted in October 2005.
The Ruvuma Basin PSA located largely onshore in southern Tanzania provides Solo with a combination of exploration and appraisal activity. It includes two specific, adjoining licence areas, known as Lindi and Mtwara. Following the first exploration period and an extension 50% of the area was relinquished and the remaining PSA covers 6,079 square kilometres.
Prior to the award of the current PSA 1153 kilometres of 2D seismic had been acquired in the area of the PSC between 1981 and 2002. No wells had been drilled within the boundaries of the PSA, but a well at Lukeledi-1 to the north had been drilled by Texaco in 1992 and the Mnazi Bay-1 well to the southeast had been drilled by Agip in 1982. Following award of the PSA Ndovu Resources, a subsidiary of Aminex, acquired 370 kilometres of offshore seismic in the Lindi Block and a further 430 kilometres of 2D seismic onshore in the Lindi and Mtwara Blocks.
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With the flow of gas from Kiliwani North Solo has achieved it's first commercial production in Africa. Kiliwani North Development Licence (KNDL) is located in Tanzania, East Africa, and contains the Kiliwani North 1 (KN-1) well which has reached 30 million cubic feet per day (equivalent to more than 5,000 barrels of oil per day) in July 2016.
The current participants in the Kiliwani North Development Licence, following TPDC back in, are: Ndovu Resources Ltd (Aminex) 54.575% (operator), RAK Gas LLC 23.75%, Solo Oil plc 7.175%, Bounty Oil & Gas NL 9.5% and TPDC 5%.
Gas from the KN-1 well is supplied the newly built Songo Songo gas processing plant which was completed in 2015 and commissioned this year. It is commingled with gas from Songo Songo gas field and is connected by the newly constructed 36-inch pipeline from Mtwara in the south of Tanzania to Dar es Salaam in the north, providing an immediate route to monetise the Kiliwani North gas production.
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In February 2014, the Company announced that it had entered into a share acquisition agreement with Horse Hill Development Limited (HHDL), a special purpose company that had acquired the rights to a 65% participating interest and operatorship in licence PEDL137 onshore in the UK Weald Basin.
Solo acquired a 10% interest in HHDL, which is equivalent to a 6.5% interest in the Horse Hill prospect and in both PEDL137 and adjacent PEDL246. The Horse Hill prospect itself lies about 3 kilometres from Gatwick Airport and covers an area of up to 16 square kilometres in the south-west of PEDL137. The licence is operated by HHDL, with UK Oil and Gas Investments (UKOG) and Solo as technical partners.
HORSE HILL-1 WELL
The Horse Hill-1 (HH-1) discovery well was the first well since the 1980s to test the entire Jurassic and Triassic section of the Weald Basin, reaching the Palaeozoic basement at approximately 8,500 feet. The well was drilled with oil-based mud to ensure the subsequent collection of good quality electric logging data. A comprehensive suite of modern log data, including magnetic resonance data, was acquired. Geological samples were collected at 10-foot intervals throughout the well for geochemical analysis.
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ISLE OF WIGHT
Isle of Wight, UK, PEDL 331
Join Venture: Solo (30% interest)
In early 2015, Solo together with UK Oil and Gas Investments plc ("UKOG") and Angus Energy Limited (who subsequently sold their interest to Doriemus plc ("Doriemus")) applied in the UK onshore 14th Licensing Round for a 200 square kilometre licence onshore in the Isle of Wight. The partnership was subsequently awarded the area as PEDL 331 by the Oil and Gas Authority (“OGA”) in December 2015.
It is believed that PEDL 331 contains an undeveloped oil discovery at Arreton. Based on work by UKOG and Nutech, and confirmed independently by Solo and Xodus Group Limited (“Xodus”), Arreton-2, originally drilled by British Gas in the 1970’s, is now considered to be an oil discovery of the Arreton Main Field. Arreton-2 was never tested, however, modern electric log analysis reveals oil pay in the conventional reservoir targets. When taken together with adjacent oil prospects Xodus has calculated a most likely gross oil in place estimate of 219 million barrels (“mmbbls”) in conventional reservoirs within the Purbeck, Portland and Inferior Oolite limestone. Arreton Main is considered by Xodus to contain most likely contingent resource net to Solo's interest in PEDL 331 of approximately 5 mmbbls.
UKOG, as operator of PEDL 331, has commenced discussions with the local planning authorities and expects to seek regulatory consents to appraise the Arreton Main oil discovery in the coming years. The first exploration period is 5 years.
MR. RITSON - NON-EXECUTIVE CHAIRMAN
Mr Ritson has worked in the energy sector for over 35 years, initially with BP plc, where he held the roles of International Chief Geophysicist, Head of Geoscience Research and Business Unit Leader for both Norway and Alaska Exploration. Subsequently Mr. Ritson managed the international operations of Burlington Resources Inc. and more recently he was CEO at Regal Petroleum plc before founding the Vanguard Energy Group where he was Chairman and CEO. Mr. Ritson is a member of both the Audit and Remuneration committees.
MR. MALING - FINANCE DIRECTOR
Daniel (“Dan”) Maling has over 15 years of senior commercial management experience primarily in the oil and gas and resources sectors. Dan has worked with several AIM, ASX and TSX listed companies providing corporate finance, business development and corporate governance advice. He is currently director of a number of private companies and is Managing Director of boutique investment bank East Star Capital (UK) Limited. Dan is a member of the Chartered Accountants Australia & New Zealand.
MR. JENKINS - TECHNICAL DIRECTOR
Mr Jenkins is a Chartered Engineer with a Bachelor of Engineering degree in Mining Engineering and a Master of Engineering degree in Petroleum Engineering. He has 20 years of experience working in industry, initially in mining before moving to petroleum. Mr Jenkins worked in a variety of technical and increasingly senior managerial positions in mid-sized independent oil companies, including Enterprise Oil, LASMO, OMV (UK) Ltd and Afren plc and he currently serves as Chief Operating Officer to the AIM-traded Leni Gas & Oil plc.
MR. STRANG - NON-EXECUTIVE DIRECTOR
Mr Strang is a member of the Australian Institute of Chartered Accountants and has been in business over 20 years, holding senior financial and management positions in both publicly listed and private enterprises in Australia, Europe and Africa. Mr Strang has considerable corporate and international expertise and over the past decade has focused on mining and exploration activities in the oil and gas and natural resources sectors. He was Finance Director before the appointment of Daniel Maling and he is currently a director of a number of AIM listed companies including Rare Earth Minerals Plc, Doriemus Plc and Polemos Plc.
Solo Oil plc
38 Jermyn Street
T. 0203 794 9230
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