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Solo Oil making “significant strides” under new management

"The year to date has seen Solo take significant strides towards its strategic goal of monetising the mature assets within our portfolio,” Maling said

oil and gas operations
Solo traded out of its shareholding in HHDL

Solo Oil PLC (LON:SOLO) managing director Dan Maling described “significant strides” made by the company as it released its interim results statement.

It was a period that saw operational progress, corporate transactions, management transition and (post period end) a significant monetisation deal.

"The year to date has seen Solo take significant strides towards its strategic goal of monetising the mature assets within our portfolio,” Maling said.

“Buoyed both by operational and corporate events during the period we are confident that we have entered a transformative phase.

READ: Solo Oil completes Horse Hill transaction with UKOG

“As of today, we have a strong balance sheet which provides us with optionality as we progress commercial negotiations.”

He added: “Our newly formed board is fully aligned with shareholders and is implementing a focused strategy to deliver near-term value and set the company on a path to sustainable long-term growth."

During the reporting period, a significant resource estimate put the Ntorya project at some 763bn cubic feet of gas (gross) and partner Aminex executed an important farm-out transaction to bring in new partner with Omani conglomerate Zubair Corporation taking 50% ownership of the project.

With Zubair’s backing, a new drilling and expansion programme is getting underway in Tanzania,

In the UK, meanwhile, operations geared up again at the Horse Hill discovery where an ongoing extended well testing campaign aims to confirm the project’s commerciality – the first phase achieved that goal for the conventional Portland reservoir, and, subsequent phases will now test two deeper zones in the Kimmeridge play.

Solo, in the second half, has dealt away its in-direct interest in Horse Hill which was held via a shareholding in the HHDL vehicle (owner of 65% of the underlying project) and, in return, now holds a 4.2% shareholding in UK Oil & Gas Investments PLC (LON:UKOG) which is the largest listed stakeholder in Horse Hill (via a 71% stake in HHDL).

The transaction provided Solo with two benefits – it gives exposure to the broader Weald basin play (of which Horse Hill is the most advanced part) via UKOG’s portfolio of assets, and, secondly, it gives the company the possibility to partially exit its position via the equity market.

Solo carried out a £2.4mln share placing in August and described a “significantly strengthened balance sheet” with no debt.

In terms of the actual financial results for the first half, the oil and gas investment group reported a £514,000 loss for the first six months of 2018 and ended June with £147,000 of cash.

Quick facts: Scirocco Energy PLC

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