Solo Oil (LON:SOLO) is confident that the investment in the Ruvuma PSA and Reef Resources (TSX-V: REE) have the potential to be very rewarding.
These are the company’s two investments under the new investment strategy, which was passed in July 2009.
In its final results for the year ended 30 June 2010, Solo said it is looking to realise the potential of the investments over the coming years and it will continue to review more investment opportunities.
Solo has a 12.5 percent stake in the Ruvuma PSA alongside FTSE100 constituent Tullow Oil (LON:TLW) and fellow AIM-listed oil explorer Aminex (LON:AEX).
The Ruvuma PSA covers a 12.360 square kilometre area in Tanzania, it is roughly 80 percent onshore and 20 percent offshore.
One well has already been drilled successfully, with the onshore Likonde-1 well encountering thick sands with hydrocarbon shows.
“The result from Likonde-1 represents a major step forward in establishing the potential of the Ruvuma Basin,” Solo said.
The company also highlighted that it has sufficient funds to be an active partner in the next phase of work and drilling in Tanzania.
Solo invested in Reef Resources in April with a commercial loan.
The financing package provided by Solo allows Reef to develop a proven oil and gas production asset in Ontario.
Under the terms of the deal, Solo receives a 60 percent cut of post-tax revenue until the loan is repaid, thereafter it will receive 50 percent of the net earnings from the funded developments.
“The financing facility provides Solo with the opportunity to participate in a producing asset with immediate production revenue payback and reserves security,” Solo said.
“As well as the opportunity of establishing a working relationship with Reef with a view to increasing collaboration both in the Ontario basin and other assets throughout Canada.”