Solo Oil PLC (LON:SOLO) has today announced the results of the recently completed Competent Persons Report (“CPR”) conducted independently by RPS Energy Consultants Limited (“RPS”) which results in a significant resource upgrade of the Ntorya gas discovery in the Ruvuma Petroleum Sharing Agreement (“Ruvuma PSA”) where Solo holds a 25% working interest. Aminex plc (“Aminex”), the operator of the Ruvuma PSA, has also confirmed that, when taken together with the Ntorya Gas Commercialisation Study prepared by io oil & gas consulting (“io consulting”) last year, these resources indicate the commercial feasibility of a proposed development at Ntorya. RPS, a subsidiary of RPS Group, is an internationally-recognised resource reporting firm and io oil & gas consulting is a joint venture between Baker Hughes, a GE company, and McDermott.
Highlights
· Ntorya 2C contingent resource estimate increased to gross 763 billion cubic feet (“bcf”), an increase of over 10-fold from the 2015 CPR;
· Ntorya Pmean gross gas initially in place (“GIIP”) upgraded to 1.87 trillion cubic feet (“tcf”), which is an increase of 44% on previous management estimate of 1.34 tcf and an increase of approximately 12-fold from the previous CPR (pre-drilling of Ntorya-2) in 2015;
· io consulting has confirmed that the Ntorya gas development project could be sanctioned with three wells producing into a raw-gas pipeline to the Madimba gas plant approximately 33 kilometres away.
Based on this independent report undertaken by an industry leading consultancy, Solo now holds net resources of approximately 467 bcf Pmean GIIP, resulting in excess of 190 bcf (over 30 million barrels oil equivalent (“mmboe”)) of most likely contingent resources net to its 25% interest.
Neil Ritson, Solo’s Executive Chairman, commented:
“A further significant and material resource upgrade made independently by RPS supports the Company’s view that Ntorya is a major gas field within the regional market, thereby underpinning our development plans. The independent verification of our net interest equivalent to over 30 mmboe underlines the significant value of Ntorya within our portfolio. When taken with the results of the io consulting commercial feasibility study, we are now confident that Ntorya can be economically produced with limited further major capital expenditure. This gives us line of sight to additional revenues and strengthens our ability to monetise our interest at the appropriate time. We now look forward to the confirmation that a rig has been secured for the drilling of appraisal well Ntorya-3, and to continued progress on the award of a 25-year development licence for the field.”
Ntorya Development
At Ntorya in the Ruvuma PSA, where the Company has participated in the drilling of two successful wells, Ntorya-1 and Ntroya-2, the gross 2C contingent resource estimate has been increased by RPS to 763 bcf, which is an increase of nearly 11 times over the previous 2015 CPR. Pmean GIIP has also been upgraded for the third time since the drilling of the Ntorya-2 well to gross 1.87 tcf, up from the operator’s initial post-drilling estimate of gross 466 bcf and then gross 1.34 tcf in September 2017 which was based on a fully updated post-drilling basin model.
Encouragingly, io consulting’s work has also confirmed that the Ntorya gas development could be sanctioned with three wells; Ntorya-1, Ntorya-2 and, the yet to be drilled Ntorya-3 well, and that an early production scheme (“EPS”) would limit upfront capital expenditure and enable the main field development to be funded from future cash-flow.
Kiliwani North Development Area
At Kiliwani North, where Solo holds a 7.55% working interest and where approximately gross 6.4 bcf has been produced to date, RPS estimates gross 1.94 bcf of 2P reserves remain with a gross Pmean GIIP of 30.8 bcf. It is planned to install compression at Kiliwani North-1 in order to increase recovery of the resources. In addition, a new prospect has been identified within the Kiliwani North Development Licence (“KNDL”) at Kiliwani South with an additional estimated gross 57 bcf prospective Pmean GIIP. As the KNDL was originally granted for 25 years (expiring in 2036), the operator is now conducting further technical work to assess the feasibility of further drilling which could lead to additional production into the Songo Songo Island gas processing plant.
Qualified Person’s Statement:
The information contained in this announcement has been reviewed and approved by Neil Ritson, Chairman and Director for Solo Oil plc, who has over 40 years of relevant experience in the oil industry. Mr. Ritson is a member of the Society of Petroleum Engineers (SPE), an Active Member of the American Association of Petroleum Geologists (AAPG) and is a Fellow of the Geological Society of London (BGS).
