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Solo Oil sets sights on 5,000 barrels per day through acquisition drive

Solo wants greater hands-on control in future and will become an operator, not just an investor
Tanzania
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Most of Solo's assets currently are in Tanzania

 

  • Solo Oil PLC’s (LON:SOLO) management wants to use acquisitions to boost production to 5,000 barrels per day.

  • Gas assets in Tanzania - stakes in Ruvuma and Kiliwani North - are still deemed ‘core’ to the business

  • Solo also holds a 13.8% interest in Helium One, which owns the Rukwa Project in Tanzania with estimated (P50) resources of 98.9bn standard cubic feet of helium.

  • Acquisitions will be assets that can attract a wide audience of non-equity funding partners

  • Solo wants greater hands-on control in future and will become an operator, not just an investor

 

How is it doing

 

Expansion

Solo has already screened fifteen potential acquisitions across a number of geographies.

European gas assets and certain territories in North Africa or those with “benign jurisdictions and attractive pricing dynamics” are the targets.

Solo wants to put together the 5,000 barrels of oil equivalent per day portfolio within three years.

 

Existing assets

 

Kiliwani North -  Solo has an 8.4% stake in the Kiliwani North field which, in 2016, gave the company its first production generated revenue.

After around 2 years of operation, Kiliwani’s single well has just gone through an upgrade programme and is yet to come back onstream.

In 2017, Kiliwani North yielded some 15 mmscfd of production and generated £600,000.

 

Ruvuma - Solo also owns 25% of Ruvuma, an expansive and high potential area in Tanzania that already hosts the Ntorya gas field development project.

Here, the asset development is set to be driven by The Zubair Corporation which is acquiring a 50% stake in stake Ruvuma via a farm-out transaction with current operator Aminex.

It will leave Aminex with 25% of the asset, the same as Solo.

Zubair plans to conduct a minimum work programme targeting a minimum gross rate of 40mln cubic feet of gas per day (MMcf/d) which amounts to 6,700 barrels equivalent.

It will also drill, complete and test a new well, Chikumbi-1 which will be a follow-up to the successful wells of at Ntorya.

The well will be located up-dip from both the Ntorya-1 and Ntorya-2 wells.

 

What the boss says: Alastair Ferguson, executive chairman

“We believe that the market dynamics have created compelling and realistic opportunities that will enable the board to transform the operational and financial profile of the business in the near-medium term.”

 

Video

 

Inflexion points

  • Farm-out of Ruvuma is completed followed by exploration well at Chikumbi.
  • New managing director, Ian Stalker, just appointed to Helium One
  • Kiliwani North comes back onstream
  • New team appointed from Gneiss Energy to lead acquisition strategy
  • Board and management own 7.6% of Solo
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