Anglo African Oil & Gas PLC

Anglo African Oil switches to Djeno for bigger impact at Tilapia


A deeper exploration prospect lies in the Djeno interval, where the adjacent Minsala field produces at a rate of 5,000 bopd.


Quick facts: Anglo African Oil & Gas PLC

Price: £0.04

Market: AIM
Market Cap: £17.05 m


  • Anglo African Oil has majority working interest in the Tilapia field in the Republic of Congo

  • Company has just raised up to £8.25mln through a finance facility with Miton and Riverfort

  • Report in July suggests reservoir quality at Tilapia is between good and excellent, which supports a commercial decision


What it does

Anglo African Oil & Gas PLC (LON:AAOG) holds a 56% working interest in Tilapia, which is currently pumping about 40 barrels per day from the shallow R1/R2 sands.

Republic of Congo state oil company SNPC holds the remaining 44% and also a production-sharing and joint operating agreement with Petro Kouilou (PK), Anglo African’s wholly- owned subsidiary.

Other operators nearby are already producing from the geological formations to be drilled.

Below R1/R2 are the lower Mengo sands, where neighbouring fields have been producing 400-500 barrels daily from wells for some years.

A deeper exploration prospect lies in the Djeno interval, where the adjacent Minsala field produces at a rate of 5,000 bopd.

Finally, there is the relatively untested Vandji Horizon, though this is below the well's target depth of 2,700m.

Consultant Havoc reviewed the interpretations by Schlumberger and Nutech of the wireline logs taken from the TLP-103C well.

The report states that "both reports have concluded that reservoir quality is between good and excellent, which supports a commercial decision to implement a plan to seek to produce from the Djeno."


Financing plans

The £8.25mln cash is earmarked for the company to re-enter the TLP-103C well with a view to producing from a “potentially prolific” layer of the Djeno reservoir in its Tilapia project in the Republic of Congo.

For £2.56mln of the funds, existing shareholder Miton Asset Management has bought 49.3mln shares at a price of 5.2p per share, a premium of 27% to the closing share price.

An investor sharing agreement has also been agreed with Yorkville Advisors Global’s YA II fund and Riverfort Global Opportunities PCC, which together will buy £5.7mln of shares at the 5.2p price.

The investor sharing agreement will see AAOG give all of the £5.7mln cash back to Yorkville and Riverfort, which will then both pay it back to AAOG in 12 monthly amounts determined by the company's share price performance in that preceding month.

The structure of the agreement is designed offers “certainty as to the dilutive effect” of the fundraising compared to convertible loan notes.


What the boss says: David Sefton

“I can’t see the logic of doing anything else there than go for the Djeno as it can utterly transform the company.

“Initially, production will be a couple of thousand barrels per day and ideally cost as little as possible.




Inflexion points

  • Anglo African was recently granted renewal of Tilapia licence
  • Talks underway over terms of operating and production sharing agreement
  • Field adjacent to Tilapia producing 5,000 barrels per day from Djeno

Blue Sky

Sefton’s background includes various private equity firms, running a seismic business and legal head for Russian oiler Lukoil’s overseas acquisition arm

James Berwick, meanwhile, held senior positions at Ophir Energy and Africa-focused Impact Energy, before the ex-Para and French Foreign Legionnaire was parachuted in as chief executive in January.

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