Solo Oil could pick up another 10% interest in Norwegian gas explorer Helium One for a knockdown price.
The independent investment firm acquired the 10% interest in the company for £2.55million earlier this year.
It gave the business access to Helium One’s Rukwa Project in Tanzania.
The gas field gas an estimated recoverable helium volume close to 100 billion cubic feet (bcf).
Current global Helium demand is approximately 6 bcf making the recovery of “strategic global importance”.
The deal had the option for Solo to acquire another 10% of Helium One for an addition £4million – £2.0 million in cash and £2.0 million by the issue to Helium One of ordinary shares in Solo.
But in light of “market conditions” this has been reassessed to £3million in cash.
Solo also updated investors in a statement about the progress being made in Tanzania.
Neil Ritson, Solo’s chairman, added: “Solo’s original Tanzanian gas portfolio is maturing and we are reviewing our various options with regards to monetising a portion of the Ruvuma PSC during the development of the Ntorya gas condensate discovery in order to fund future participation in the licence and in doing so, extract maximum value on behalf of our shareholders.”
Solo is also waiting for approval for the Horse Hill Discovery on the south coast of England.
An application for long term production testing and further appraisal drilling is scheduled to be decided at the Council’s planning committee meeting in July 2017.
The Horse Hill-1 well Kimmeridge Limestone and Portland Sandstone conventional oil discovery is located on the northern side of the Weald Basin, approximately 3 kilometres north of Gatwick Airport.
It consists of two naturally-fractured limestone members within the Kimmeridge section, known as KL3 and KL4, flowed dry, 40 degree API oil, at an aggregate stabilised natural flow rate of 1,365 barrels per day (“bopd”) with no indication of depletion.
The overlying Portland flowed dry, 35-37 degree API gravity crude at a stable pumped rate of 323 bopd. The Portland was produced at the rod-pump’s maximum achievable rate and thus flow was constrained by the pump’s mechanical capacity.
Licence PEDL137 is operated by Horse Hill Developments Limited (“HHDL”) which holds a 65% interest and is the licence’s operator. Solo has a 10% ownership of HHDL which represents a 6.5% working interest in HH-1 and PEDL137.
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