Solo Oil Completes Purchase of Additional Stake in Tanzania Gas Licence

Solo Oil on Monday announced it has completed a deal t to acquire 3.825 percent stake in Tanzania's Kiliwani North development licence from Aminex for $2.16 million.

The deal was announced February this year.

Under the terms of the agreement Solo's interest will increase through three payment tranches to Aminex.

Initial investment of $566,802 for an additional 1 percent interest on signature of the agreement, increasing Solo's total interest from 6.175 percent to 7.175 percent. A second investment of $708,502 for a further 1.25 percent interest within 15 days of the first payment being received for gas from Kiliwani North-1 (KN-1). Solo's total interest will increase to 8.425 percent. 

A third investment for the balance of $892,712 for an additional and final 1.575 percent interest within 15 days of the commercial operations date being declared, taking Solo's total and final interest to 10 percent.

The KN-1 well, which is now ready to begin production, has been ascribed gross contingent resources (2C) of gross 28 billion cubic feet by LR Senergy and the Company expects to book reserves from this well by the year-end, Solo said. 

Gas from KN-1 will be sold to the Tanzania Petroleum Development Corporation (TPDC) under a gas sales agreement at the wellhead for an agreed price of $3.00 mmBTU.

Gas will be processed at the new Songo Songo Island gas plant and will ultimately be transported by pipeline to Dar es Salaam, where it will be sold into the local Tanzanian market.

Current participants in the Kiliwani North development licence, following TPDC back in, are: Ndovu Resources Ltd (Aminex) 55.575 percent (operator), RAK Gas LLC 23.75 percent, Solo Oil plc 6.175 percent, Bounty Oil & Gas NL 9.5 percent and TPDC 5 percent.