Gulf Oil and Gas accountACCOUNT

Solo Oil Signs SPA for Kiliwani North, Tanzania

Source: 4/4/2016, Location: Africa

Solo announces that further to the agreements previously announced with Aminex plc (Aminex) to acquire a further interest in the Kiliwani North Development Licence (KNDL) Solo has now executed a Sale and Purchase Agreement (SPA) for the acquisition of a 3.825% interest in Kiliwani North Development Licence (KNDL) to Solo Oil plc (Solo) for a total cash consideration of US$2.16 million.

Under the terms of the SPA Solo's interest will increase through three payment tranches to Aminex, linked to project milestone, for the total agreed cash consideration:

· Initial investment of US$566,802 for an additional 1% interest on signature of the SPA, increasing Solo's total interest from 6.175% to 7.175%
· A second investment of US$708,502 for a further 1.25% interest within 15 days of the first US dollar payment being received for gas from Kiliwani North-1 (KN-1). Solo's total interest will increase to 8.425%
· A third investment for the balance of US$892,712 for an additional and final 1.575% interest within 15 days of the commercial operations date being declared, taking Solo's total and final interest to 10%.

If any payment is missed then that payment option, and only that option, will be automatically cancelled. Payment of the second and third investments will require further funding from cash flow or otherwise to be arranged by Solo.

Following full payment of the consideration, Solo's interest will increase from its current 6.175% to a 10% interest in KNDL. As announced on 11 February 2016, the transaction represents the part exercise of its pre-existing option to acquire a further 6.175% interest. The remaining entitlement under the option agreement has now expired.

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. Gas from KN-1 will be sold to the Tanzania Petroleum Development Corporation (TPDC) under a gas sales agreement (GSA) at the wellhead for an agreed price of US$3.00 mmBTU (approximately US$3.07 per mscf), payable in US dollars. The gas price is not linked to any commodity price so is unaffected by current commodity market conditions.

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.

Neil Ritson, Solo's Chairman, commented:

"Solo is delighted to increase its exposure to the KNDL project with commencement of production imminent. The project offers a revenue stream that will increase through the commissioning process and into commercial production under the GSA which has take-or-pay provisions and is paid in US Dollars guaranteed by a consortium of banks. By linking the acquisition of our additional interest to project milestones we have been able to further de-risk the investment."

Current participants in the Kiliwani North Development Licence, following TPDC back in, are: Ndovu Resources Ltd (Aminex) 55.575% (operator), RAK Gas LLC 23.75%, Solo Oil plc 6.175%, Bounty Oil & Gas NL 9.5% and TPDC 5%. On completion of the payments envisaged by the SPA Aminex will hold 51.75% and Solo will hold 10%.

For more information about related Opportunities and Key Players visit East Africa Projects

Acquisitions and Divestitures News in Tanzania >>

Australia >>  3/26/2020 - 3D Oil has announced that ConocoPhillips Australia and TDO’s wholly owned subsidiary, 3D Oil T49P have executed a Joint Operating Agreement ('JOA') in...
Australia >>  3/26/2020 - Real Energy, an Australian east coast focused gas company with interests in the Cooper and Surat Basins has announced that the Queensland Government h...

Georgia >>  3/26/2020 - Block Energy Plc has entered into a sale and purchase agreement ("SPA") with Schlumberger B.V. to acquire its subsidiary Schlumberger Rustaveli Compan...
Congo >>  3/24/2020 - Zenith Energy Ltd., has entered into a conditional Deed of Variation (the "Deed of Variation") to amend the terms of the consideration (the "Considera...

Falkland Islands >>  3/19/2020 - Rockhopper Exploration plc (RKH), the oil and gas exploration and production company with key interests in the North Falkland Basin, provides the foll...
Brazil >>  3/18/2020 - Petrobras, following up on the release dated 01/15/2020, announces the beginning of the binding phase regarding the sale of its entire interest in two...

Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Tanzania Oil & Gas 1 >>  2 | 3 | 4 | 5 | 6 |

Oil & Gas Projects in Tanzania >>

More News

Related Links

Gulf Oil and Gas
Copyright © 2020 Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.