Solo Oil PLC (LON:SOLO) Executive Chairman Neil Ritson caught up with DirectorsTalk for an exclusive interview to discuss the latest update on their Helium One investment
Q1: Some exciting news from your investment in Helium One in Tanzania?
A1: Yes, it is, and we see it as a very exciting prospect and this is a good step forward. We had a shareholder update from the company, they’re making good progress towards drilling and they’ve appointed PAC Partners in Australia to advise them on the funding options for that phase. We’re very excited about the potential here for world-scale helium which is in short supply and those demand dynamics continue to be very compelling so good progress being made.
Q2: So, what’s been happening operationally there?
A2: We’re assisting Helium One in reprocessing the existing seismic data and getting much better structural resolution and also beginning to see with some clarity, with some direct indications of gas in the subsurface. Traditionally in the oil and gas arena, we talk about DHI’s, direct hydrocarbon indicators, in this case they’re direct helium indicators, convenient the same acronym and actually the same mechanism, so we’re seeing bright spots and flat spots and other anomalies associated with trapped gas.
Once we’ve got all of the seismic processed shortly, we’ll integrate that into the other data sources, airborne gravity, soil geochemistry and so forth and we hope to have a comprehensive new prospect ranking in the second quarter, that will then be submitted for a new competent person’s report. There’s already close to 100 bcf of independently-verified resource potential for helium in the Rukwa prospect which is the one that we’re going to drill up first.
So, big potential and going to the market with it in Australia is going to be beneficial too.
Q3: There is talk of an IPO in Australia, what will that mean for Solo Oil and Helium One and when do you think it’ll occur?
A3: It’s early days for them, they’ve only just appointed PAC Partners, IPO is only one of the routes to funding that they will consider I’m sure, but it does seem appropriate. Solo is an access for public markets here in London and the Australian Securities Exchange is very robust when it comes to resource potential players such as this so it’s a logical extension.
I think they’re looking towards the mid-year, this is to support the drilling phase in the second half of the year, as I said, operationally we’ll be ready for that injection of capital around the middle of the year to commit to the drilling in the second half, so things make good sense there.
What Solo’s reaction to that will be, we’re very supportive whether we follow our money or not that’s too early to say but I think our excitement in this play is evident and we’ll be very keen on a new public markets verification validation and valuation of this play that would come through an IPO.
Q4: Can you provide us with any update on your other oil and gas investments in Tanzania?
A4: Yes, we recently reported that we’re preparing for the second appraisal well on our Ntorya hydrocarbon gas discovery, Ntorya-3, the operator, Aminex, is out looking for a rig for that at the moment.
Ntorya, which is currently 1.3 tcf of gas, is also going through a new competent person’s report which is likely to be issued in the next few weeks and is the subject of a 25-year development licence application which we’re hoping will be granted shortly. The combination of the drilling, a new resource report and that licence will enable us to move that forward into development, how we participate in that development we’re fairly open-minded about that. It’s a valuation point and we’ll work to a variety of ways that we can go forward with that and an early production scheme might bring in some early revenue as well so it’s quite an exciting year for that prospect as well.
We also recently reported that Aminex are now progressing with the compression project on our producing Kiliwani North gas field and that will help boost production there.
Q5: All in all, it sounds like there’s plenty on the horizon for Solo Oil shareholders to look forward to then?
A5: Indeed, there is. We also have Horse Hill in the Weald Basin in the UK up for long-term testing starting in the second quarter so yes, a lot going on in the portfolio this year and we should have some excellent news for our shareholders over the next few months.
