Solo Terminates Equity Line Facility.
Solo today announces that it has mutually agreed to terminate the three year £10 million Equity Line Facility with Dutchess Opportunity Cayman Fund Ltd ("Dutchess") as the Company now believes that this type of facility no longer fits with the Company's forward funding plans.
The Company has worked effectively with Dutchess over the past year with this facility and it achieved the objectives of funding its obligations to drill, complete and test the exciting Ntorya 1 gas and condensate discovery in Tanzania. Solo no longer sees it necessary to utilise this facility going forward and has terminated the Dutchess facility at no cost to either party.
Solo has announced that it has entered into a Vendor Collaboration Agreement with Aminex plc ("Aminex"), which has engaged FirstEnergy Capital LLP ("FirstEnergy") to manage the farm-out of up to 50% of the two companies' respective working interests in the Ruvuma PSA in Tanzania.
The Ruvuma PSA covers 6,079 square kilometres on the Tanzanian border with Mozambique and is located within the wider Ruvuma Basin where over 100 trillion cubic feet (tcf) of gas has been discovered in recent years. Earlier this year gas was discovered by Solo and Aminex at the Ntorya-1 well in the Ruvuma PSA. Ntorya-1 was tested at over 20 million cubic feet per day of gas and 139 barrels of condensate (53 degree API) on a 1" choke.
As recently announced, an independent technical evaluation of the Ruvuma PSA has been prepared by ISIS Petroleum Consultants ("ISIS") which attributed a total mean unrisked gas-initially-in-place (GIIP) for identified leads, prospects and discoveries of 5.75 tcf within the PSA.
The Ntorya discovery has significant potential for commercial development and is estimated by ISIS to contain 1.2 tcf of discovered and undiscovered mean GIIP. It is anticipated that gas from Ntorya and the Ruvuma PSA generally will be commercialised via the planned 36" diameter pipeline which will run through the PSA area to Dar es Salaam, which is the largest gas market in Tanzania.
FirstEnergy is a leading international energy-focused investment bank, providing full-service energy expertise including a dedicated technical advisory group to oil and gas property acquisitions and divestitures, based in London.
Participants in the Ruvuma PSA are; Ndovu Resources Ltd (Aminex) 75% (operator) and Solo Oil Plc 25%. It is envisaged that additional 2D seismic will be acquired starting in 2012 and that two further exploratory wells will be drilled in the second half of 2013.
David Lenigas, Solo Executive Chairman, commented; "Solo's management has utilised this Dutchess facility extensively over the past year to fund the Ntorya 1 discovery in Tanzania and complete the well for testing. We are confident of finding a funding partner for the Ruvuma PSA and our need for funding of this type is deemed no longer necessary.
Competent Person's Statement:
The information contained in this announcement has been reviewed and approved by Neil Ritson, Chief Executive Officer and Director for Solo Oil Plc who has over 35 years of relevant experience in the oil industry. Mr. Ritson is a member of the Society of Petroleum Engineers, an Active Member of the American Association of Petroleum Geologists and is a Fellow of the Geological Society of London.
NOTE: The terms "Discovered" and "Undiscovered" Gas Initially-in-Place are used in accordance with the SPE Petroleum Resources Management System classification of 2007.
