Company snapshot
Solo Oil's (LONDON:SOLO) strategy is to acquire and develop a diverse, global, non-operated portfolio of oil & gas assets. The group holds interests In Tanzania, the UK, Canada and Nigeria. Despite the abundance of press coverage for Solo’s Horse Hill oil discovery in the Weald (UK), the primary focus is Tanzania, where the group awaits signing of a gas sales agreement at its recently developed gas field, Kiliwani North, and appraisal of the group’s gas discovery, Ntorya-1, in the Ruvuma PSA. The stakes are high as near-term cash flow from Kiliwani would both fund the Ntorya-1 appraisal and enable exploration in the wider Ruvuma PSA.
Production from Kiliwani North expected near term
Development of Kiliwani North is practically complete; the final hurdle to first production remains the signing of a gas sales agreement (which Solo expects imminently). On signing, Solo will increase its interest in KN to 13% (from 6.5%), with annual cash flows from KN estimated by Aminex at $20m (gross); the field would be a valuable source of funding for both Aminex and Solo. We expect the resulting cash flow from KN to fund appraisal of gas discovery Ntorya-1 and exploration in the Ruvuma licence.
Ntorya gas discovery warrants further appraisal
Further appraisal is needed to test Ntorya-1’s 1.5tcf estimated gas in place; operator Aminex plans an appraisal well (Ntorya-2) for H215 (subject to funding). A ready market exists for Ntorya gas via the 36’ pipeline from Mnazi Bay to Dar ‘es Salaam. Beyond Ntorya the Ruvuma PSA contains material prospects, particularly Sudi (426bcf), Namisange (1,183bcf) and Likonde Updip (444bcf), suggesting a multi-well future exploration programme could be warranted and offering upside to companies looking to farm-in to the Ruvuma licence.
Horse Hill (UK): Portland production test scheduled for H215
Solo Oil’s focus at Horse Hill remains the conventional upper Portland sandstone discovery, where estimates of recoverable oil remain dependent on a pumped flow test to be carried out by end-2015. Beyond the Portland discovery, attention has focused on the Kimmeridge shale and micrite limestone ‘hybrid’ play. Although reservoir consultants Nutech estimated oil in place for Kimmeridge at Horse Hill of 158mmbbl per square mile, whether this oil can be produced and at what rate remains a long-term consideration for the HHDL consortium.
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