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EPIC: SOLO
Market: AIM
52-week High/Low: 17.84p / 3.56p
Sector: Oil & Gas
Market Cap: 15.67M
Solo Oil PLC

Solo Oil PLC

Solo Oil is a UK-listed investment company that is focused on exploration, development and production oil and gas assets, with its primary focus being in Africa. In addition to its key projects in Ruvuma Basin and Kiliwani North, Tanzania, the Company’s portfolio also includes interests in UK exploration projects, counting Horse Hill and the Isle of Wright, and a strategic investment in Burj Africa, West Africa.

Solo Oil PLC

www.solooil.co.uk

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Big picture - Why invest in Solo Oil PLC


Solo Oil PLC Snapshot

OUR STRATEGY

Solo’s Investing Policy is to acquire a diverse global portfolio of direct and indirect interests in exploration, development and production oil and gas assets, with an on-shore focus in politically stable countries.

The Company (Solo) 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), may constitute a minority stake in the company or project in question and may take the form of equity, joint venture debt, convertible instruments, licence rights, or other financial instruments as the Directors deem appropriate.

Solo 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 Solo’s assets will be held in its own name, or through wholly owned subsidiaries.

 

REEF RESOURCES - NORTH AMERICA


Solo owns a 28.56% interest in 23,500 acres of petroleum leases in southern Ontario which contain a number of Ordovician reefal structures which contain variously oil, gas and condensate.
2011

The Ausable #5 well was drilled to a total depth of 615 metres and showed excellent net oil pay of 72 metres in the centre of the reef. The Ausable reef structure is estimated to contain overall liquid hydrocarbon resources of 8.9 million barrels oil equivalent in–place. Based on other analogous gas cycling schemes in Canadian reefs, such as Golden Spike Field, it was expected that recovery rates in excess of 70%, and potentially as high as 90%, could be achieved.

2012

Successful  drilling of the Airport North #1 well which discovered additional gas reserves. The gas was piped to the Ausable field via a newly constructed pipeline tie-in and re–injected into the reservoir to increase overall oil and condensate recovery.

2012 to Present

The operator, Reef Resources Inc., has not been unable to raise the necessary funds to continue funding its share of the development of the Ausable gas condensate field and no alternative has so far been found to unlock the potential. Solo’s management continues to seek ways to advance or monetise the investment made in the Ausable and adjacent Airport fields, and hopes to report progress in due course.

HORSE HILL


BACKGROUND


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.

TIMELINE

September 2014 Horse Hill-1 well (HH-1) spudded.
  
October 2014 Announced the Portland sandstone Oil Discovery in the Jurassic section.
  
December
2014 Provisional estimated most likely estimate of discovered oil in place was reported as being 8.2 million barrels (mmbbls) in the Portland sandstone reservoir.
  
March 2015 The initial well data analysis conducted by UKOG and an independent consultancy, Nutech, identified 407 feet of potential net oil pay within the Upper Jurassic Kimmeridge, Oxfordian and Lias interbedded limestone and mudstone sequence, in addition to the 102 feet of Portland sandstone gross oil pay. Geochemical analysis of samples throughout the Kimmeridge section showed the presence of a world-class oil source rock.
  
April 2015 Nutech estimated a total Stock Tank Oil Initially In Place (STOIIP) of 158 mmbbls per square mile in the Kimmeridge section. Approximately 72% of the STOIIP, or 114 mmbbls per square mile, lies within the Upper Kimmeridge limestone and shales.
  
May 2015 Reserves auditor Xodus calculated an estimated most likely STOIIP of 21 mmbbls for the Portland sandstone section of the well. Electric log analysis showed that the well had approximately 100 feet of gross oil pay.
  
4 June 2015 A study conducted by Schlumberger independently evaluated the unconventional oil potential of the HH-1 area to be even higher than Nutech’s analysis, estimating approximately 271 mmbbls per square mile for the Jurassic section. A total of 255 mmbbls gross STOIIP was estimated to lie within the limestone and mudstone plays of the Kimmeridge, Oxford Clay and Lias and the balance in the Upper Portland Sandstone discovery.
  
18June 2015 Nutech provided an additional independent report of the estimated STOIIP contained within the 55 square mile area covered by the Horse Hill licences. The study calculated a best estimate STOIIP of 9,245 mmbbls (9.25 billion bbls) within the Jurassic section, with a calculated best estimate total Kimmeridge formation STOIIP of 5,230 mmbbls (5.23 billion bbls).
  
August 2015 Schlumberger reported a higher estimate of total STOIIP of 10.993 billion barrels (bn bbls) within the Jurassic section of the Horse Hill licences. This is split between the Kimmeridge Clay Formation 8,262 bn bbls, with the shales of the Oxford Clay and Lias Formations containing a further aggregate STOIIP of 2,731 bn bbls.
  
November 2015 The Environment Agency formally granted the permit necessary to carry out a flow test of HH-1 oil discovery.
  
January 2016 The Oil and Gas Authority granted final consent for a flow test.
  
February - March 2016 Flow tests over three separate zones (Lower Kimmeridge, Upper Kimmeridge, Portland sandstone) were carried out. High quality light, sweet oil (40 API degree in Kimmeridge, 37 API degree in Portland) was produced and delivered to the Esso Fawley refinery. Exceptionally high rates were achieved in all three zones, setting new records for flow rates achieved in onshore exploration wells in the UK. Summary of the results in the table below.
  
October 2016  Submission of planning application to Surrey County Council for further appraisal testing and drilling at the Horse Hill-1 oil discovery
  
February 2017
Upgrade to Portland Oil Resources, Horse Hill Oil Discovery, Weald Basin, UK. New report conducted by Xodus calculated an increase of 53% OIP (32 MMbbl) in the Portland Sandstone Discovery from the previously 21 MMbbl. Gross recoverable Portland 2C Contingent Resources 1.5 MMbbl. Base Case Portland initial oil-rate estimated at 350 barrels of oil per day per well. Work plans now aimed towards Portland long-term production by end 2018

IMPORTANCE OF HORSE HILL

The HH-1 well has demonstrated the presence of a potentially commercial Portland sandstone discovery and equally importantly the existence of a potentially very highly significant naturally fractured Kimmeridge limestone reservoir, which could be laterally very extensive and is in contact with a mature world-class source rock.

 

HELIUM ONE - TANZANIA

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
  • Early entry into the global helium market estimated to be worth US$6 billion annually
  • Solo management team supporting Helium One by applying extensive applicable experience from hydrocarbon exploration and production to helium play development.
  • Main global supply is from US Federal Reserve which is being sold off and is expected to be fully depleted by 2021. Next largest producer is Qatar, which produces helium as a by-product of LNG and is being marginalised by its Middle East neighbours. Global supply significantly impacted without these producers.
  • Worldwide demand growth caused by expansion in use of MRI scanners and other scientific, communications and computing equipment as well as lifting and transport.
  • Strong pricing dynamics with current crude helium prices of 30 to 50 times those of hydrocarbon gas.
  • 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"), equivalent to over 10 years' global demand.

TIMELINE

March 2017 - Initial Investment of £2.55 million for a 10% interest in Helium One.
  
April 2017 - Hybrid Enterprises, the exclusive worldwide reseller of Lockheed Martin’s Hybrid Airships, announced a strategic partnership with Helium One, the explorer, developer and producer of high value bulk liquid helium for the international market. This partnership will explore the use of the LMH-1 Hybrid Airship to transport helium out of Helium One's deposit sites in Tanzania.

 

BURJ AFRICA - NIGERIA

Solo holds a interest of 20% in UK registered investment company Burj Petroleum Africa Limited (“Burj Afica”).

2013

Solo made an investment into Swiss private company Pan Minerals Oil and Gas AG (“Pan Minerals”) in order to assist Pan Minerals in progressing various opportunities in West Africa where Solo hopes eventually to take an equity stake in a West African oil producer with onshore oil assets. At the beginning of 2015 Solo held a 19.9% interest in Pan Minerals.

2014

Investment in Pan Minerals allowed it to gain access to an opportunity to invest in the marginal fields round in Nigeria through a private UK registered company Burj Petroleum Africa Limited (“Burj Africa”).  Burj Africa subsequently applied for various undeveloped fields in the 2014 Nigerian Marginal Fields Bid Round along with joint venture partners Global Oil and Gas (“Global”) and Truvent Consulting.

The first application is for two adjacent marginal fields which contain a total of 10 wells that were drilled by an international major and they are believed to contain proven and possible recoverable oil reserves of 59.3 million barrels (13.5 million barrels net to Burj Africa after royalty).

Global is the designated operator of the Burj Africa joint venture in Nigeria. Truvent Consulting is an indigenous Nigerian oil and gas development company. Award of these blocks and any subsequent operations continues to be subject to Nigerian government approval.


2015

Solo exchanged its 19.9% shareholding in Pan Minerals for a 15.9% in Burj Africa and make a further investment of US$500,000 in cash and shares to increase its shareholding in Burj Africa to 20%. Solo also gained the right to convert the equity position in Burj Africa to a direct participation in the joint venture with Global in Nigeria.

2016

Decisions are still awaited from the Nigerian government on the the Marginal Field licenses

 

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.

Significant Shareholders Number of Shares % of Issued Capital
BARCLAYSHARE NOMINEES LIMITED 935,252,509 11.92%
TD DIRECT INVESTING NOMINEES (EUROPE) LIMITED (SMKTNOMS) 870,693,975 11.10%
HSDL NOMINEES LIMITED 671,979,943 8.56%
HARGREAVES LANSDOWN (NOMINEES) LIMITED (HLNOM) 490,428,455 6.25%
HSBC CLIENT HOLDINGS NOMINEE (UK) LIMITED (731504) 415,666,606 5.30%
HARGREAVES LANSDOWN (NOMINEES) LIMITED (15942) 388,280,536 4.95%
INVESTOR NOMINEES LIMITED (NOMINEE) 332,240,573 4.23%
TD DIRECT INVESTING NOMINEES (EUROPE) LIMITED (SMKTISAS) 273,672,198 3.49%
HSDL NOMINEES LIMITED (MAXI) 258,385,638 3.29%
HARGREAVES LANSDOWN (NOMINEES) LIMITED (VRA) 241,670,503 3.08%

Last update 16/05/2017

Solo Oil plc
Suite 4B
Princes House
38 Jermyn Street
London
SW1Y 6DN

T. 020 7440 0642
E. [email protected]

NOMAD & Joint Broker:
Beaumont Cornish Limited,
2nd Floor Bowman House,
29 Wilson Street,
London, EC2M 2SJ.

Joint Broker:
Shore Capital Limited,
Bond Street House,
14 Clifford Street,
London, W1S 4JU.

Investor & Media Relations:
Cassiopeia Services Ltd,
55 Gower Street,
London,
WC1E 6HQ.

Auditors:
Chapman Davis LLP,
Chapel Court,
London, SE1 1HH.

Solicitors:
Kerman and Co LLP,
200 Strand,
London,
WC2R 1D.

Share Registrars::
Share Registrars Limited,,
Suite E, First Floor,
9 Lion and Lamb Yard,
Farnham,
Surrey. GU9 7LL.

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