Disposal of Ausable Reef Gas Assets to Levant

Source: www.gulfoilandgas.com 7/8/2020, Location: North America

Solo, the AIM investing company targeting attractive production and development opportunities within the European energy market, provides the following update further to its announcement on 22 March 2019 regarding the disposal of its 28.56% interest in the Ausable Reef gas assets (the "Assets"), located in Ontario, Canada, to Levant Exploration and Production Corp. ("Levant"). The Assets comprise 23,500 acres of petroleum leases in southern Ontario that have been shut-in for a number of years.

The Company has now entered into a conditional asset purchase agreement ("Agreement") with Reef Resources Limited ("Reef") and Levant for the sale ("Sale") of interests in the Assets held by Reef (71.44% interest) and Solo (28.56% interest) to Levant. Subject to satisfaction of certain conditions set out in the Agreement, including confirmatory due diligence by Levant on the Assets, Solo expects to complete the Sale in the near future.

As consideration for the Sale of Solo's interest, Levant shall issue the equivalent of a 1% Gross Overriding Royalty to the Company on any future production revenues. In addition, Levant will assume responsibility for future expenditure associated with the Assets.

The Company fully impaired the value of its holding in the Assets to zero in 2017, and incurred only nominal costs related to its holding in the Assets in 2019.

Commenting on the disposal, Tom Reynolds, CEO, said:
"The disposal of the Ausable Reef interest is another milestone as we transition the Company away from legacy assets and progress along our stated strategic path. Over the last year we have made considerable progress in rationalising the portfolio to align it with our strategic objectives and provide line of site to value realisation on behalf of our shareholders. Completion of our ongoing Tanzanian assets sales process would mark a further major milestone in achievement of this strategy."


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