Share Name Share Symbol Market Type Share ISIN Share Description
Solo Oil LSE:SOLO London Ordinary Share GB00BF1BK408 ORD 0.20P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 5.00p 4.75p 5.25p 5.00p 5.00p 5.00p 301,886 07:44:06
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Oil & Gas Producers 0.0 -0.5 -0.0 - 19.62

Solo Oil Plc Annual Financial Report

15/06/2017 7:00am

UK Regulatory (RNS & others)

Solo Oil (LSE:SOLO)
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Solo Oil Plc

15 June 2017


7.00am 15 June 2017

Solo Oil plc

("Solo" or the "Company")


Solo Oil (AIM: SOLO), the investment company focused on acquiring and developing a diverse, non-operated portfolio of strategic interests in resources assets, is pleased to announce the publication of its Annual Results for the year ended 31 December 2016.

Period highlights:

   --     First gas and cash flow achieved from Kiliwani North-1 in April 
   --     Ntorya-2 appraisal well spudded in December 
   --     Successful testing of Horse Hill-1 well 
   --     Restructured balance sheet and ended period with zero debt 

Post-period highlights:

   --     Appraisal well Ntorya-2 successfully drilled and tested at a rate of 17 mmscfd 

-- Significant increase to resources estimates on Ruvuma as a result of Ntorya-2; 466 bcf gross discovered gas in place with a most likely gross contingent resource of 186 bcf;

-- Strategic investment in Helium One Limited to gain access to a potentially world scale helium project in Tanzania.

Commenting on the results, Neil Ritson, Executive Chairman, said:

"We have seen progress across all the core assets within the portfolio, with a number of important strategic, commercial and operational milestones being achieved during the last 18 months. Our historic investments are now reaching monetisation milestones as we seek to maximise the returns from our investments."

For further information:

 Solo Oil plc 
  Neil Ritson / Dan Maling    +44 (0) 20 3794 9230 
 Beaumont Cornish Limited 
  Nominated Adviser and 
  Joint Broker 
  Roland Cornish              +44 (0) 20 7628 3396 
   Shore Capital 
   Joint Broker 
   Jerry Keen                   +44 (0) 20 7408 4090 
   Beaufort Securities 
   Joint Broker 
   Jon Belliss                  +44 (0) 20 7382 8300 
   Buchanan (PR) 
   Ben Romney / Chris 
   Judd                         +44 (0) 20 7466 5000 

Chairman's Statement

I am pleased to be delivering my first statement since I assumed the role of Executive Chairman in May 2017. The Board is pleased with the progress that has been made over the last 18 months and we are satisfied that we have significantly enhanced the overall value of our portfolio of investments; the metric against which we believe any investment company's performance should primarily be assessed.

Throughout 2016, and the first few months of 2017, Solo oversaw a significant maturing of the Company's portfolio with first gas and revenues from Kiliwani North, the successful testing of the Horse Hill oil discovery in the UK and the successful appraisal of the Tanzanian Ntorya gas-condensate discovery in early 2017. As the core assets within the portfolio mature, we have begun to consider the next cycle of investment strategy. Bearing in mind our investment ethos of first mover advantage and the application of extensive technical expertise we announced the addition of the Helium One investment in early 2017, something we truly believe holds significant future value.

We are entering an exciting phase in the Company's development, benefitting from our historic investment whilst also capitalising on opportunities presented by the prevailing market conditions. We are approaching some crucial investment decisions that will require the Company to decide on the best approach and timing of monetisation of certain assets within the portfolio.

Investment review

As an investment company, Solo's primary objective is to maximise the returns on our investments and in doing so, create value on behalf of our shareholders over time. We seek early stage entry points in order to obtain a meaningful equity position at attractive valuations. Solo seeks to add value to the assets as they progress through exploration, appraisal and development. As a result of the early stage entry, Solo is required to fund its proportionate share of costs or farm down its equity in an asset in return for cash or carried operations. Furthermore, as we enter assets at an early stage, the Board is required to adopt a long-term view on the investment horizon from original investment to the point of monetisation. It is the responsibility of the Board, to assess the optimum point and method of monetisation, whether that be early in order to realise value and enable the gains to be reinvested into new opportunities, or to follow our money with further proportionate investment in an asset with the belief that greater returns can be generated at a later point in time. Whilst the latter approach may result in some short-term dilution of shareholders as we raise the necessary funds through the issue of equity, it is ultimately likely to deliver greater returns on investment over the medium to long term by increasing the core value of the asset. It is intended in future to make an open offer to existing shareholders whenever this is practical in order to ensure the impact of dilution is minimised.

Solo is developing a track record for generating value from its investments overall, with Kiliwani North and Ruvuma both representing successful case studies. Solo leveraged its equity in Kiliwani North to maintain an interest through to production, and whilst our interest in the asset is relatively small it provides us with sufficient cash flow to cover our corporate G&A costs, which is important to us as an investment company. Solo also has a material 25% interest in the world-class gas-condensate discoveries in the Ntorya Appraisal Area, which was recently the subject of a major resources upgrade following the successful drilling and testing of Ntorya-2 ("NT-2") in March 2017. This flagship asset has generated industry interest and will continue to do so as the licence is progressed further in the coming months. Our decision to maintain our material stake in the licence by paying our proportionate share of the NT-2 well has been validated and similar decisions will be required as further operational activity occurs. It is the responsibility of the Board to ensure we effectively communicate the various value scenarios to our shareholders so they can understand our recommendations and the rationale for our investment decisions.

Our post-period decision to acquire a 10% interest in Helium One was driven by our ambition to replicate the success we had previously had in Tanzania, a geography and jurisdiction that we know well. Whilst Helium One's Rukwa project is not conventional oil and gas, it has many parallels with Ruvuma in terms of early entry into a world class asset with significant upside and transformational potential. The downstream elements to the Helium One story are unlike anything Solo has done before, however, the upstream elements are similar to conventional hydrocarbon exploration and it is in this area that we can provide industry expertise and experience in order to progress the project to a drill ready status. The drivers for the helium industry, underpinned by compelling supply vs demand dynamics, have caused increased investor attention on this little known industry and we predict that this trend will continue as investors become more aware of the commercial and unique technical aspects of helium. We were therefore pleased to have capitalised on our first mover advantage on this exciting and compelling opportunity and look forward to communicating progress on it throughout the rest of the year as we move towards the catalyst of an exploration well next year.

Closing remarks

Solo has taken great strides in the last 18 months and is being rewarded in its commitment to an effective strategy to develop a diverse portfolio of non-operated assets. Whilst we are not operators of any of the assets within the portfolio, the executive team plays a highly active role in the technical and commercial decisions required on each asset; thereby ensuring we closely oversee our investments and seek to maximise value on behalf of the Company and its shareholders. It is this value add that enables us to obtain our interests at attractive entry points and is a unique selling point that differentiates Solo from other resources investment vehicles.

The Company's portfolio, size and profile has evolved significantly as a result of the changes that we have implemented to the way that Solo is managed in terms of management structure, governance process and investment strategy. To reflect these enhancements and to emphasise our position as an independent investment company, we will be undertaking a re-branding exercise in the second half of this year. We look forward to providing further information to our shareholders on this exercise.

I would like to take this opportunity to congratulate my colleagues on the executive team for their hard work in helping progress Solo to this point. It has been, and will continue to be, a busy, intense and exciting period of operational and commercial activity, and I am confident that their commitment, expertise and passion will result in further progress and value creation within our portfolio. Lastly, I would like to thank our shareholders for their continued support and we look forward to rewarding them for their patience as historic investments begin to bear fruit and realise value.

Neil Ritson


14 June 2017

Operational & Financial Review

Highlights for the period include:


-- Gas Sales Agreement ("GSA") was executed with the Tanzanian Petroleum Development Corporation ("TPDC") for a price of US$3.00 per mmBTU;

   --              First gas was achieved from Kiliwani North-1 ("KN-1") on 4 April 2016; 

-- Commissioning of the Songo Songo Island Gas Plant was completed and testing of the KN-1 well up to over 30 mmscfd was undertaken;

-- Solo increased its interest in KN-1 from 6.175% to 7.175% and holds an option to increase its interest to up to 8.75% when commerciality is declared;

   --              US dollar revenues were received from Kiliwani North in line with the GSA; 

-- A 12-month extension of the Ruvuma PSA was granted by TPDC and endorsed by the Tanzanian Minister of Petroleum;

-- Site preparation for the Ntorya-2 and -3 appraisal wells were completed and Ntorya-2 was spudded on 21 December.

United Kingdom

-- Horse Hill-1 well ("HH-1") was tested with the Kimmeridge Limestones producing at natural flow rates of over 460 and 900 barrels of oil per day gross ("bopd") from naturally fractured intervals in the Lower and Upper Kimmeridge respectively;

-- Pumped production, constrained by pump size, of up to a gross 320 bopd was obtained from the Portland Sandstone reservoir during testing of that interval at HH-1 in March;

-- The Company was formally awarded a 30% working interest in PEDL 331 on the Isle of Wight and announced its intention, with operator UK Oil and Gas Investments ("UKOG"), to pursue the previously discovered Arreton-2 field as part of an initial work program;

-- Planning application lodged to carry out long-term testing of the HH-1 reservoirs and to carry out additional drilling in future years.

Highlights in 2017 year to date

-- Appraisal well Ntorya-2 was successfully drilled to a total depth of 2,795 metres and tested at a rate of 17 mmscfd over a 34 metre interval and through a 40/64-inch choke;

-- As a result of Ntorya-2 the discovery resource estimates were increased substantially to 466 bcf gross discovered gas in place with a most likely gross contingent resource of 186 bcf;

-- Solo made a strategic investment in Helium One Limited to gain access to a potentially world scale helium project in Tanzania.

Portfolio Review

Tanzania, Kiliwani North (7.175% interest)

In 2014, Solo agreed with Aminex to acquire up to a 13% working interest in the Kiliwani North Development Licence ("KNDL") on Songo Songo Island. The Kiliwani North-1 ("KN-1") well was drilled by Aminex and its partners in 2008 and discovered gas in a 60 metre column in the Lower Cretaceous.

Solo acquired an initial 6.5% interest in the KNDL project for US$3.5 million in 2015 and subsequently announced its intention to increase its stake to up to 10% through the acquisition of three additional tranches of project equity linked to project milestones at the Company's option. Solo's original stake of 6.5% was subsequently reduced by way of TPDC's intended back-in to the project for a 5% interest which reduced Solo's holding to 6.175%.

The condition precedent for further acquisition of project equity by Solo was the signature of a gas sales agreement ("GSA") which was achieved in January 2016. The subsequently agreed tranche milestones were the commencement of gas production which was achieved in April 2016, the receipt of first cash revenue and the declaration of commercial (post-commissioning) gas production under the take-or-pay arrangements of the GSA. The first of these milestones has been reached and Solo has increased its direct participation to 7.175%. Receipt of first revenue occurred in August 2016 and the Company has elected not to increase equity in KNDL to 8.425% in order to focus on investments in the Ruvuma PSC. The Company retains the option to increase its KNDL stake by a further 1.575% to 8.75% when commercial operations are officially declared by TPDC.

The GSA signed with TPDC for KN-1 gas contains payment guarantees in US Dollars ("US$") and is linked to a price escalation formula commencing at US$3.00 per million British Thermal Units ("mmBTU") and rising from January 2016. The main contract phase is a depletion contract with take-or-pay provisions for 85% of the daily minimum quantity of gas to be supplied, initially set at a gross 20 million cubic feet per day ("mmscfd"). Payment for gas during the commissioning phase is based on the agreed tariff on an "as supplied" basis and no minimum quantity is guaranteed under the contract. Commissioning of the Songo Songo Island gas processing plant commenced in early April 2016 and was essentially complete by end July. Following that date KN-1 has been produced at a rate of roughly 15 mmscfd being the call on gas being made by TPDC. Overall gas market development continues to lag supply in Tanzania, however, this is expected to change to a supply shortage in future years as new power projects and distribution to domestic and industrial customers are brought on-line.

All payments due under the GSA by end 2016 have been received from TPDC and payment continues on approximately 60 day terms in 2017. Condensate produced by the KN-1 well has been aggregated and is being sold on behalf of the Joint Venture by TPDC. The average price received for the gas sold in 2016 was US$3.25 per mscf with additional value accruing to the condensate which is sold separately.

Independently verified gas in place was confirmed by LR Senergy in a Competent Person's Report ("CPR") in May 2015. LR Senergy computed gross mean gas in place of 44 bcf of which 28 bcf have been attributed as best estimate contingent resources. These contingent resources will be converted to reserves once the GSA comes into full force on declaration of commercial gas production.

Tanzania, Ruvuma Basin (25% interest)

Solo holds a 25% interest in the Ruvuma Petroleum Sharing Agreement ("Ruvuma PSA") in the south-east of Tanzania covering an area of approximately 3,447 square kilometres of which approximately 90% lies onshore and the balance offshore. The Ruvuma PSA is in a region of southern Tanzania where very substantial gas discoveries have been made offshore in recent years and where gas has also been discovered onshore and along the coastal islands at Ntorya, Mnazi Bay, Kiliwani North and Songo Songo.

The Ntorya gas-condensate discovery, made in 2012 and operated by Aminex plc ("Aminex"), represents the most immediate commercialisation opportunity in the Ruvuma PSC. The Ntorya-1 well was flow testing over a 3.5 metres zone at the top of the gross 25 metre gas bearing interval produced at a maximum gross flow rate of 20.1 million cubic feet per day ("mmscfd") and 139 barrels per day ("bpd") of 53 degree API condensate through a 1-inch choke. The well is suspended as a discovery for subsequent additional testing or production.

Based on an infill 2D seismic programme around Ntorya-1 a re-estimation of the discovered and prospective resources in the Likonde-Ntorya area was made and subsequently audited by Senergy (GB) Limited ("LR Senergy") who issued a CPR in May 2015. LR Senergy estimated that Ntorya contained a gross 158 billion cubic feet ("bcf") of proven gas in place, of which they attributed a gross 70 bcf as best estimate contingent resources. Overall in the Ruvuma PSA, LR Senergy estimated gross 4.17 trillion cubic feet ("tcf") of discovered and undiscovered gas in place.

In order to further appraise the Ntorya gas condensate discovery made in the Ntorya-1 well it was decided to drill an updip well, Ntorya-2, at a location approximately 1.5 kilometres east of the discovery well, Ntorya-1. The location was prepared in late 2016 along with a possible further appraisal site, Ntorya-3, located further updip to the east. The Caroil-2 rig was moved to site in December and the well spudded on 21 December 2016.

During early 2017 drilling continued on prognosis with 17-inch casing set at 1,326 metres in early January and the well reached the anticipated reservoir section at a depth of 2,593 metres in early February 2017. A gross gas bearing sandstone reservoir interval of 51 metres thickness was encountered and the well was deepened to a final total depth of 2.795 metres and a 7-inch liner set prior to testing. A 31 metre interval of the gross reservoir was perforated and flowed dry gas at a stabilised rate of 17 mmscfd through a 40/64-inch choke. Analysis of the well during testing and interpretation of electric logs strongly suggests that high mud weights, used to control gas influx during drilling, had caused formation damage around the well bore and these effects were reducing the test flows. Remedial operations prior to production would be used to target higher flow rates.

As a result of the new data from Ntorya-2 the gross most likely in place gas ("GIIP") in the Ntorya discovery was increased by over 200% from 153 bcf in the LR Senergy report in May 2015 to 466 bcf. Based on this GIIP Solo estimate that the gross mostly contingent resources in the portion of the Ntorya filed proven to date are 186 bcf. The upside or high estimate gross contingent resources also increased by over 230% to 766 bcf, with the high estimate GIIP of 1.3 tcf. The Company is fully satisfied that such volumes, now discovered, are commercially exploitable and along with the operator, Aminex, Solo has applied for a 25-year development licence covering the entire Ntorya field area. An early production scheme involving local use of the gas or its conversion to power or CNG is also under consideration.

Once a development licence has been awarded, Solo and Aminex will carry out an approved work programme, yet to be agreed with the Tanzanian authorities, which is likely to include 3D seismic acquisition and further drilling including the Ntorya-3 location. Solo is currently assessing its options with regards to its future participation in the project. Amongst such considerations is further proportionate investment, a possible farm-down, or sale of all or some of its 25% interest in the discovery so as to monetise its investment in the Ruvuma PSC and return funds to the Company to invest in its other operations.

Horse Hill, Weald Basin, UK (6.5% interest)

In 2014, the Company acquired a 10% interest in a special purpose company, Horse Hill Developments Limited ("HHDL"), which became the operator and 65% interest holder in two Petroleum Exploration and Development Licences, PEDL 137 and 246, in the northern Weald Basin between Gatwick Airport and London. PEDL 137 covers 99.29 square kilometres (24,525 acres) to the north of Gatwick Airport in Surrey. PEDL 246 covers an area of 43.58 square kilometres (10,769 acres) and lies immediately adjacent and to the east of PEDL 137.

The Horse Hill-1 ("HH-1") well commenced drilling operations in September 2014 and reached total depth at 8,870 feet MD in November 2014. Evaluation of electric logs and other data collected from the well resulted in the announcement on 24 October 2014 of a conventional Upper Portlandian Sandstone oil discovery. Subsequent analysis of the Kimmeridge, Oxfordian and Liassic sections in the well indicated that there was also substantial in place oil in the naturally fractured Kimmeridge Limestones and associated mudstones.

Approval for the testing of all three oil bearing zones was granted in late 2015 and the tests commenced in early February 2016. Tests lead to naturally flowing oil rates of the Kimmeridge Limestones at a gross rate of 460 bopd from the Lower interval and 900 bopd from the upper interval. The Portland Sandstone was placed on pump to stimulate flow and achieved a maximum gross stable rate in excess of 320 bopd. These flow rates substantially exceeded the expectations for the well and rank alongside some of the highest rates ever achieved on test for any UK onshore well.

Following the testing of the Portland Sandstone, where higher productivity and a lower than expected water cut were observed, further analysis on the electric logs has led to a 200% increase in the anticipated gross oil in place at this stratigraphic level. Previous estimates of oil in place within the Portland Sandstone were 7.7 mmbbls per square mile and were increased to 22.9 mmbbls per square mile. Based on the original closure estimated by Xodus in 2015 this would increase the overall gross oil in place within the Horse Hill Portlandian discovery to 62.5 mmbbls.

The relevant licences have been extended to permit further work and UK Oil and Gas Investments plc ("UKOG") has indicated that it hopes to perform long term testing on all hydrocarbon bearing zones as part of a wider appraisal program that includes 3D seismic and further drilling. Planning permission is presently being sought for the next phase of testing which will establish the parameters of any development scheme and the commerciality of production from the various oil bearing intervals. It is anticipated that planning consent will be granted during the third quarter of 2017 with testing underway before year-end.

PEDL 331, Isle of Wight, UK (30% interest)

An application was made jointly with UKOG and Angus Energy Limited (who subsequently sold this interest to Doriemus plc ("Doriemus")) for a 200 square kilometre onshore block in the south and central portion of the Isle of Wight in the UK 14th Landward Licensing Round. Solo holds a 30% interest in this joint venture.

The UK Oil and Gas Authority ("OGA") have now issued the licence, PEDL 331, to the UKOG-Solo-Doriemus partnership. Based on work by UKOG and confirmed by independent work by Solo Arreton-2, originally drilled in 1974 but never tested, is now considered to be an oil discovery on the Arreton Main Field. When taken together with the adjacent prospects Xodus has calculated a P50 gross oil in place estimate of 219 mmbbls in conventional reservoirs within the Purbeck, Portland and Inferior Oolite limestone reservoirs at Arreton. Arreton Main is considered by Xodus to contain most likely (P50) contingent resource net to Solo's interest in PEDL 331 of 4.7 mmbbls.

UKOG will become operator of PEDL 331 and has commenced discussions with the local planning authorities and expects to seek regulatory consents to appraise the Arreton Main oil discovery in the coming years.

Burj Africa, Nigeria, West Africa (20% interest)

Between 2013 and 2015 Solo made an investment into various ventures aimed at accessing known reserves in fields in Nigeria. These have resulted in a 20% interest in Burj Petroleum Africa Limited ("Burj Africa") a company which had applied for various undeveloped fields in the 2014 Nigerian Marginal Fields Bid Round ("Marginal Fields Round") along with joint venture partners Global Oil and Gas and Truvent Consulting.

Two adjacent marginal fields containing 10 wells previously drilled by an international major oil and gas company have been applied for. These fields are believed by Burj Africa and its partners to contain gross proven, probable and possible recoverable oil reserves of 59.3 mmbbls, or approximately 13.5 mmbbls net to Burj Africa after payment of royalties.

Award of these blocks and any subsequent operations continues to be subject to Nigerian government approval. Recent developments in the world oil markets and specific to Nigeria have significantly delayed the issue of new licences under the envisaged Marginal Fields Round. The Company continues to monitor developments in Nigeria and has noted some positive movements in this regard in recent months. The Company hopes to report further developments in this investment during the remainder of 2017.

Ontario, Canada (28.56% interest)

Solo continues to hold an interest in 23,500 acres of petroleum leases in southern Ontario that contain various Ordovician reefal structures and which host oil, gas and condensate. The operator, Reef Resources Inc., has been unable to raise the necessary capital to continue the development of the Ausable gas condensate field and no alternative funding has so far been found to unlock the potential. Solo's management continues to seek ways to advance or monetise the investment made in the Ausable and adjacent Airport fields, and will report progress in due course. No material progress was achieved during 2016.


In 2015, Solo acquired a small seed interest in the Canadian listed oil and gas company, Maxim Resources, with a view to acquiring an interest in a possible onshore gas production asset in Morocco. This is a very early stage seed investment and will be reported on more fully as the project takes shape. The Company, however, notes the significant recent success of Sound Energy plc in the Moroccan Triassic TAG-I and Palaeozoic gas fairway and will monitor developments with interest.

Helium One, Tanzania (10%)

Following the year end Solo entered into a sale and purchase agreement with Helium One Limited ("He1") to acquire an initial 10% stake in He1 with an option to acquire a further 10% stake. He1 owns exploration licences in a number of highly prospective and extremely rare helium properties in Tanzania. The most mature of the projects, at Rukwa, in the East African Rift Valley has been independently assessed by Netherland & Sewell Associates International as having the gross potential for close to 100 bcf of helium in place. With current world helium demand of approximately 6 bcf per annum the Rukwa project represents a material potential contribution to future helium supply.

Originally identified by means of helium macro-seeps the prospects under investigation have been mapped per soil geochemistry anomalies and are in part mapped on legacy 2D seismic data acquired previously during failed hydrocarbon exploration. The identified macro-seepage shows high concentrations of helium (up to in excess of 10% by volume) in association with nitrogen. He1 recently acquired an airborne gravity and magnetic survey and plans to integrate the interpretation of that data into their subsurface modelling before acquiring additional 2D seismic to further define traps for drilling, potentially as early as 2018.

World helium demand has been growing at a rate of about 3 per cent per annum over the last decade and is a vital component of many modern technologies, notable Magnetic Resonance Imaging ("MRI") devices used in modern medicine. As a result of its unique properties as a super fluid, it plays a vital role in devices which use super conducting magnets; as in MRI machines. As an inert gas helium is also vital in the production of many critical electronic components such as disk drives and fibre optics and for industrial testing, purging and leak detection. Helium, as a lifting gas in hybrid air vehicles, has also begun to have increased significance. Though relatively abundant in the earth's atmosphere, helium is lighter than air and is progressively lost to space and it is extremely difficult to recycle effectively.

The current supply of helium comes from several large deposits in the USA and as an impurity removed from hydrocarbon gas in a number of liquefied natural gas ("LNG") projects such as in Qatar and Algeria. However, the US government has been selling its strategic reserve and will close the facility for international sales no later than 2021, after which there is projected to be a significant shortage of helium available on world markets. To date, only the Tanzanian projects and additional helium associated with hydrocarbon gas in Siberia have been identified as large scale future producers. With these weak supply-demand fundamentals helium prices, which are currently approximately US$145 per million cubic feet (crude helium), are expected to rise significantly.

The He1 Tanzania projects have excellent supply economics and, once liquefied, the helium can be transported to world markets via the deep-water port at Dar es Salaam. Given the competitive demand for crude helium on world markets Solo and He1 expect to sell helium at the wellhead through an offtake agreement with a large industrial gas company who would liquefy and transport the helium to market.

Solo completed the acquisition of the initial 10% interest in He1 on 22 March 2017 through the payment of GBP1.2 million in cash and the issue to He1 of 236,842,105 shares in Solo Oil plc. After subsequent renegotiation Solo also holds an option to acquire an additional 9% in He1 for the payment of GBP3 million by end June 2017, which will be automatically extended to 31 July 2017 depending on certain conditions. Daniel Maling was also appointed to the Board of He1 as Solo's representative.

Immediate Outlook

The Company has made significant advances in its investments in Tanzania and the UK in the last reporting period and is now on production and receiving revenue from its Kiliwani North investment. The Ruvuma PSC, which holds the Ntorya gas-condensate discovery, has been extended and in 2017 was successfully appraised by means of the Ntorya-2 well. The Horse Hill discovery has yielded exceptionally high flow rates at all three productive levels and further long term testing is now planned to design a commercial development. Additionally, the Company has added prospective acreage in a new onshore licence in the Isle of Wight, and in 2017 commenced acquiring access to highly prospective helium exploration acreage in Tanzania, providing further material prospectivity potential for future years.

Financial & Corporate Review

The financial year 2016 witnessed the first generation of revenues within the portfolio as gas sales were realised during the commissioning of Kiliwani North-1 in April. Solo's working interest of 7.175% resulted in GBP0.5m of gas sales net to Solo for the period. All revenues were received in US dollars, in line with the Gas Sales Agreement ("GSA") that was executed during the period with the Tanzanian Petroleum Development Corporation ("TPDC") at an initial price of US$3.00 per mmBTU.

Solo ended the period in a significantly stronger financial position than in the prior year. The company's balance sheet carries zero debt after the repayment of the YA Global Master SPV debt facility. The Company maintained its commitment to strict capital discipline and reduced administrative expenses by 20% - from GBP900,000 in 2015 to GBP720,000 in 2016.

During the period, Solo raised GBP2.8 million of equity through two private placements. Proceeds raised through the placements were used to settle the YA Global debt facility and to fund the acquisition of an additional 1% of Kiliwani North (increasing from 6.175% to 7.175%) and Solo's share of the Ntorya-2 appraisal well.

Post period end Solo raised GBP2.0 million to test the Ntorya-2 well. On 22 March 2017 Solo acquired a 10% interest in He1 for GBP2.55 million, which was funded through a private subscription raising GBP1.2 million with the balance of GBP1.35 million through issuing new Ordinary Shares to He1.

Daniel Maling was appointed to the Board as Finance Director during August 2016 to lead the finance, business development and capital markets functions of the Company. Post period end, Neil Ritson assumed the role of Executive Chairman having previously been non-executive. Solo's executive team is now comprised of three executive directors; Neil Ritson as Chairman, Daniel Maling as Finance Director and Fergus Jenkins as Technical Director.

Fergus Jenkins, Technical Director

Daniel Maling, Finance Director

14 June 2017

Competent Person's statement:

The information contained in this document has been reviewed and approved by Neil Ritson, Chairman for Solo Oil Plc. Mr Ritson is a member of the Society of Petroleum Engineers, a Fellow of the Geological Society, an Active Member of the American Association of Petroleum Geologists and has over 39 years relevant experience in the oil industry.

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

Glossary and Notes

 2D seismic              seismic data collected using 
                          the two-dimensional common depth 
                          point method 
----------------------  ----------------------------------------- 
 3D                      three-dimensional 
----------------------  ----------------------------------------- 
 AIM                     London Stock Exchange Alternative 
                          Investment Market 
----------------------  ----------------------------------------- 
 API                     American Petroleum Institute 
----------------------  ----------------------------------------- 
 barrel or bbl           45 US gallons 
----------------------  ----------------------------------------- 
 bbls                    barrels of oil 
----------------------  ----------------------------------------- 
 bcf                     billion cubic feet 
----------------------  ----------------------------------------- 
 best estimate           the most likely estimate of a 
  or P50                  parameter based on all available 
                          data, also often termed the P50 
                          (or the value of a probability 
                          distribution of outcomes at the 
                          50% confidence level) 
----------------------  ----------------------------------------- 
 billion                 10 to the power 9 
----------------------  ----------------------------------------- 
 bopd                    barrels of oil per day 
----------------------  ----------------------------------------- 
 CNG                     condensed natural gas 
----------------------  ----------------------------------------- 
 contingent resources    those quantities of petroleum 
                          estimated, at a given date, to 
                          be potentially recoverable from 
                          known accumulations, but the 
                          associated projects are not yet 
                          considered mature enough for 
                          commercial development due to 
                          one or more contingencies 
----------------------  ----------------------------------------- 
 CPR                     Competent Persons Report 
----------------------  ----------------------------------------- 
 discovery               a petroleum accumulation for 
                          which one or several exploratory 
                          wells have established through 
                          testing, sampling and/or logging 
                          the existence of a significant 
                          quantity of potentially moveable 
----------------------  ----------------------------------------- 
 electric logs           tools used within the wellbore 
                          to measure the rock and fluid 
                          properties of the surrounding 
----------------------  ----------------------------------------- 
 GIIP                    gas initially in place 
----------------------  ----------------------------------------- 
 GSA                     gas sales agreement 
----------------------  ----------------------------------------- 
 HH-1                    Horse Hill-1 well 
----------------------  ----------------------------------------- 
 HHDL                    Horse Hill Developments Limited 
----------------------  ----------------------------------------- 
 KN-1                    Kiliwani North-1 well 
----------------------  ----------------------------------------- 
 KNDL                    Kiliwani North Development License 
----------------------  ----------------------------------------- 
 m                       thousand (ten to the power 3) 
----------------------  ----------------------------------------- 
 mm                      million (ten to the power 6) 
----------------------  ----------------------------------------- 
 mmbbls                  million barrels of oil 
----------------------  ----------------------------------------- 
 mmscf                   million standard cubic feet of 
----------------------  ----------------------------------------- 
 mmscfd                  million standard cubic feet of 
                          gas per day 
----------------------  ----------------------------------------- 
 OGA                     UK Oil and Gas Authority (formally 
                          the Department of Energy and 
                          Climate Change) 
----------------------  ----------------------------------------- 
 oil in place            stock tank oil initially in place, 
  or STOIIP               those quantities of oil that 
                          are estimated to be in known 
                          reservoirs prior to production 
----------------------  ----------------------------------------- 
 pay                     reservoir or portion of a reservoir 
                          formation that contains economically 
                          producible hydrocarbons. The 
                          overall interval in which pay 
                          sections occur is the gross pay; 
                          the portion of the gross pay 
                          that meets specific criteria 
                          such as minimum porosity, permeability 
                          and hydrocarbon saturation are 
                          termed net pay 
----------------------  ----------------------------------------- 
 PEDL                    Petroleum Exploration and Development 
----------------------  ----------------------------------------- 
 permeability            the capability of a porous rock 
                          or sediment to permit the flow 
                          of fluids through the pore space 
----------------------  ----------------------------------------- 
 petrophysics            the study of the physical and 
                          chemical properties of rock formations 
                          and their interactions with fluids 
----------------------  ----------------------------------------- 
 play                    a set of known or postulated 
                          oil or gas accumulations sharing 
                          similar geologic properties 
----------------------  ----------------------------------------- 
 porosity                the percentage of void space 
                          in a rock formation 
----------------------  ----------------------------------------- 
 prospective resources   those quantities of petroleum 
                          which are estimated, at a given 
                          date, to be potentially recovered 
                          from undiscovered accumulations 
----------------------  ----------------------------------------- 
 proven reserves         those quantities of petroleum, 
                          which, by analysis of geoscience 
                          and engineering data, can be 
                          estimated with reasonable certainty 
                          to be commercially recoverable 
                          (1P), from a given date forward, 
                          from known reservoirs and under 
                          defined economic conditions, 
                          operating methods, and government 
----------------------  ----------------------------------------- 
 probable reserves       those additional reserves which 
                          analysis of geoscience and engineering 
                          data indicate are less likely 
                          to be recovered than Proved Reserves 
                          but more certain to be recovered 
                          than Possible Reserves. It is 
                          equally likely that actual remaining 
                          quantities recovered will be 
                          greater than or less than the 
                          sum of the estimated Proved plus 
                          Probable Reserves (2P) 
----------------------  ----------------------------------------- 
 possible reserves       those additional reserves which 
                          analysis of geoscience and engineering 
                          data suggest are less likely 
                          to be recoverable than Probable 
                          Reserves. The total quantities 
                          ultimately recovered from the 
                          project have a low probability 
                          to exceed the sum of Proved plus 
                          Probable plus Possible (3P) Reserves, 
                          which is equivalent to the high 
                          estimate scenario 
----------------------  ----------------------------------------- 
 PSA                     petroleum sharing agreement 
----------------------  ----------------------------------------- 
 PRMS                    Petroleum Resources Management 
----------------------  ----------------------------------------- 
 reserves                those quantities of petroleum 
                          anticipated to be commercially 
                          recovered by application of development 
                          projects to known accumulations 
                          from a given date forward under 
                          defined conditions 
----------------------  ----------------------------------------- 
 reservoir               a subsurface rock formation containing 
                          an individual natural accumulation 
                          of moveable petroleum 
----------------------  ----------------------------------------- 
 SPE                     Society of Petroleum Engineers 
----------------------  ----------------------------------------- 
 tcf                     trillion cubic feet 
----------------------  ----------------------------------------- 
 trillion                10 to the power 12 
----------------------  ----------------------------------------- 
 unconventional          widely accepted to mean those 
  reservoir               hydrocarbon reservoirs that are 
                          tight; that is have low permeability 
----------------------  ----------------------------------------- 

The estimates provided in this statement are based on the Petroleum Resources Management System ("PRMS") published by the ("SPE") and are reported consistent with the SPE's 2011 guidelines. All definitions used in the announcement have the meaning given to them in the PRMS.

Financial Statements

Statement of Comprehensive Income for the year ended 31 December 2016

                                                                                         Year ended         Year ended 
                                                                           Notes   31 December 2016   31 December 2015 
                                                                                           GBP000's           GBP000's 
 Revenue                                                                                        501                  - 
   Administrative expenses                                                                    (721)              (906) 
                                                                                  -----------------  ----------------- 
 Loss from operations                                                        3                (220)              (906) 
   Impairment charge                                                       8, 10                  -              (875) 
 Amortisation charge                                                         9                (275)                  - 
 Finance costs                                                               6                 (29)              (386) 
 Finance revenue                                                             7                    -                  - 
 Provision for losses on financial instrument                               13                    -              (606) 
 Loss before taxation                                                                         (524)            (2,773) 
   Income tax                                                                5                    -                  - 
                                                                                  -----------------  ----------------- 
 Loss for the period                                                                          (524)            (2,773) 
                                                                                  =================  ================= 
 Other comprehensive income 
 Decrease in value of Available for sale assets                                                (34)               (78) 
                                                                                  -----------------  ----------------- 
 Other comprehensive income for the year net of taxation                                       (34)               (78) 
                                                                                  -----------------  ----------------- 
 Total comprehensive income for the period attributable to equity 
  holders of the parent                                                                       (558)            (2,851) 
                                                                                  -----------------  ----------------- 
 Loss per share (pence) 
 Basic and diluted                                                           7               (0.01)             (0.05) 
                                                                                  -----------------  ----------------- 

Statement of Financial Position as at 31 December 2016

                                             Notes        31 December 2016       31 December 2015 
                                                                  GBP000's               GBP000's 
   Non- current assets 
 Intangible asset                              8                    10,231                 11,392 
 Oil & gas properties                          9                     2,483 
 Available for sale assets                     10                    1,181                  1,192 
                                                     ---------------------  --------------------- 
 Total non-current assets                                           13,895                 12,584 
   Current assets 
 Trade and other receivables                   12                    1,336                    523 
 Cash and cash equivalents                                             600                    824 
                                                     ---------------------  --------------------- 
 Total current assets                                                1,936                  1,347 
                                                     ---------------------  --------------------- 
 Total assets                                                       15,831                 13,931 
                                                     ---------------------  --------------------- 
  Current liabilities 
 Trade and other payables                      14                    (444)                  (234) 
 Derivative financial instrument               13                        -                  (314) 
 Borrowings                                    15                        -                  (112) 
                                                     ---------------------  --------------------- 
 Total liabilities                                                   (444)                  (660) 
                                                     ---------------------  --------------------- 
 Net assets                                                         15,387                 13,271 
                                                     =====================  ===================== 
 Share capital                                 16                      699                    556 
 Deferred share capital                        16                    1,831                  1,831 
 Share premium                                                      27,559                 25,077 
 Share-based payment reserve                                           933                    884 
 AFS reserve                                                         (116)                   (82) 
 Retained loss                                                    (15,519)               (14,995) 
                                                                    15,387                 13,271 
                                                     =====================  ===================== 
 The financial statements were approved by the board of directors and authorised for issue 
  on 13 June 2017. 
  They were signed on its behalf by ; 
   Daniel Maling                             Fergus Jenkins 
 Director                                    Director 

Statement of Cash Flows for the year ended 31 December 2016

                                                                           Year ended         Year ended 
                                                                     31 December 2016   31 December 2015 
                                                                             GBP000's           GBP000's 
 Cash outflow from operating activities 
 Operating loss                                                                 (220)              (906) 
 Adjustments for: 
 Share-based payments                                                              49                  - 
 (Increase)/decrease in receivables                                             (813)                451 
 Increase in payables                                                             210                 54 
 Foreign exchange loss                                                             93                  6 
 Net cash outflow from operating activities                                     (681)              (395) 
                                                                    -----------------  ----------------- 
 Cash flows from investing activities 
 Interest received                                                                  -                  - 
 Payments to acquire intangible assets                                        (1,597)            (2,649) 
 Net payments on settlements of derivative financial instruments                (450)              (110) 
 Payments to acquire Available for sale investments                                 -              (132) 
 Net cash outflow from investing activities                                   (2,047)            (2,891) 
                                                                    -----------------  ----------------- 
 Cash flows from financing activities 
 Proceeds from borrowings                                                           -                336 
 Repayments of borrowings                                                       (119)              (754) 
 Finance costs                                                                    (2)               (62) 
 Proceeds on issuing of ordinary shares                                         2,800              2,700 
 Cost of issue of ordinary shares                                               (175)              (131) 
 Net cash inflow from financing activities                                      2,504              2,089 
                                                                    -----------------  ----------------- 
 Net decrease in cash and cash equivalents                                      (224)            (1,197) 
 Cash and cash equivalents at beginning of the period                             824              2,021 
 Cash and cash equivalents at end of the period                                   600                824 
                                                                    =================  ================= 

The above Cash Flow should be read in conjunction with the accompanying notes.

Statement of Changes in Equity for the year ended 31 December 2016

                                                    Deferred                 Share        AFS 
                                            Share      share      Share      based    reserve   Accumulated      Total 
                                          capital    capital    premium   payments                   losses     equity 
                                         GBP000's   GBP000's   GBP000's   GBP000's   GBP000's      GBP000's   GBP000's 
 Balance at 31 December 2014                  501      1,831     22,360        936        (4)      (12,291)     13,333 
                                        ---------  ---------  ---------  ---------  ---------  ------------  --------- 
 Loss for the period                            -          -          -          -          -       (2,773)    (2,773) 
 Decrease in value of Available for 
  sale assets                                   -          -          -          -       (78)             -       (78) 
                                        ---------  ---------  ---------  ---------  ---------  ------------  --------- 
 Total comprehensive income                     -          -          -          -       (78)       (2,773)    (2,851) 
 Share issue                                   55          -      2,848          -          -             -      2,903 
 Cost of share issue                            -          -      (131)          -          -             -      (131) 
 Share-based payment charge                     -          -          -         17          -             -         17 
 Share options expired                          -          -          -       (69)          -            69          - 
                                        ---------  ---------  ---------  ---------  ---------  ------------  --------- 
 Total contributions by and 
  distributions to owners of the 
  Company                                      55          -      2,717       (52)          -            69      2,789 
 Balance at 31 December 2015                  556      1,831     25,077        884       (82)      (14,995)     13,271 
                                        ---------  ---------  ---------  ---------  ---------  ------------  --------- 
 Loss for the period                            -          -          -          -          -         (524)      (524) 
 Decrease in value of Available for 
  sale assets                                   -          -          -          -       (34)             -       (34) 
                                        ---------  ---------  ---------  ---------  ---------  ------------  --------- 
 Total comprehensive income                     -          -          -          -       (34)         (524)      (558) 
 Share issue                                  143          -      2,657          -          -             -      2,800 
 Cost of share issue                            -          -      (175)          -          -             -      (175) 
 Share-based payment charge                     -          -          -         49          -             -         49 
 Share options expired                          -          -          -          -          -             -          - 
                                        ---------  ---------  ---------  ---------  ---------  ------------  --------- 
 Total contributions by and 
  distributions to owners of the 
  Company                                     143          -      2,482         49          -             -      2,674 
 Balance at 31 December 2016                  699      1,831     27,559        933      (116)      (15,519)     15,387 
                                        ---------  ---------  ---------  ---------  ---------  ------------  --------- 

Notes to the financial statements for the year ended 31 December 2016

 1   Summary of significant accounting policies 
       General information and authorisation of financial 
     Solo Oil Plc is a public limited Company incorporated 
      in England & Wales. The address of its registered 
      office is Suite 3B, Princes House, 
      38 Jermyn Street, London SW1Y 6DN. The Company's 
      ordinary shares are traded on the AIM Market operated 
      by the London Stock Exchange. The financial statements 
      of Solo Oil plc for the year ended 31 December 
      2016 were authorised for issue by the Board on 
      13 June 2017 and the balance sheets signed on 
      the Board's behalf by Mr.Daniel Maling and Mr 
      Fergus Jenkins. 
     Investing policy 
      Solo's Investing Policy is to acquire a diverse 
      portfolio of direct and indirect interests in 
      exploration, development and production oil and 
      gas assets, and any other subsurface gas assets 
      of potential commercial significance, located 
      worldwide but predominantly in the Americas, Europe 
      or Africa. 
      The Company (Solo) may invest by way of outright 
      acquisition or by the acquisition of assets, including 
      the intellectual property, of a relevant business, 
      partnerships or joint venture arrangements. Such 
      investments may result in the Company acquiring 
      the whole or part of a company or project (which 
      in the case of an investment in a company may 
      be private or listed on a stock exchange, and 
      which may be pre-revenue), may constitute a minority 
      stake in the company or project in question and 
      may take the form of equity, joint venture debt, 
      convertible instruments, licence rights, or other 
      financial instruments as the Directors deem appropriate. 
      Solo intends to be a long-term investor and the 
      Directors will place no minimum or maximum limit 
      on the length of time that any investment may 
      be held. 
      There is no limit on the number of projects into 
      which the Company may invest, nor the proportion 
      of the Company's gross assets that any investment 
      may represent at any time and the Company will 
      consider possible opportunities anywhere in the 
      All of the Solo's assets will be held in its own 
      name, or through wholly owned subsidiaries. 
     Statement of compliance with IFRS 
     The financial statements have been prepared in 
      accordance with International Financial Reporting 
      Standards (IFRS) as adopted by the European Union 
      and as applied in accordance with the provisions 
      of the Companies Act 2006. The principal accounting 
      policies adopted by the Company are set out below. 
     New standards, amendments and interpretations 
      adopted by the Company 
      No new and/or revised Standards and Interpretations 
      have been required to be adopted, and/or are applicable 
      in the current year by/to the Company, as standards, 
      amendments and interpretations which are effective 
      for the financial year beginning on 1 January 
      2016 are not material to the Company. 
      New standards, amendments and interpretations 
      not yet adopted 
      At the date of authorisation of these financial 
      statements, the following Standards and Interpretations 
      which have not been applied in these financial 
      statements, were in issue but not yet effective 
      for the year presented: 
      - IFRS 9 in respect of Financial Instruments which 
      will be effective for the accounting periods beginning 
      on or after 1 January 2018. 
      - IFRS 15 in respect of Revenue from Contracts 
      with Customers which will be effective for accounting 
      periods beginning on or after 1 January 2018. 
      - IFRS 16 in respect of Leases which will be effective 
      for accounting periods beginning on or after 1 
      January 2019. 
      There are no other IFRSs or IFRIC interpretations 
      that are not yet effective that would be expected 
      to have a material impact on the Company. 
     Basis of preparation 
     The consolidated financial statements have been 
      prepared on the historical cost basis, except 
      for the measurement to fair value of assets and 
      financial instruments as described in the accounting 
      policies below, and on a going concern basis. 
       The financial report is presented in Pound Sterling 
       (GBP) and all values are rounded to the nearest 
       thousand pounds (GBP'000) unless otherwise stated. 
     Basis of consolidation 
     Where the Company has the power, either directly 
      or indirectly, to govern the financial and operating 
      policies of another entity or business so as to 
      obtain benefits from its activities, it is classified 
      as a subsidiary. Consolidated financial statements 
      would represent the results of the Company and 
      its subsidiaries ("the Group") as if they formed 
      a single entity. Intercompany transactions and 
      balances between Group companies are therefore 
      eliminated in full. If a subsidiary has remained 
      dormant throughout its incorporated life, there 
      is no consolidation of that subsidiary required. 
 1   Summary of significant accounting policies (continued) 
     Available for sale financial assets 
     Available-for-sale financial assets are non-derivative 
      financial assets that are either designated to 
      this category or do not qualify for inclusion in 
      any of the other categories of financial assets. 
      The Group's available-for-sale financial assets 
      include unlisted securities. These available-for-sale 
      financial assets are measured at fair value. Gains 
      and losses are recognised in other comprehensive 
      income and reported within the available-for-sale 
      reserve within equity, except for impairment losses 
      and foreign exchange differences, which are recognised 
      in profit or loss. When the asset is disposed of 
      or is determined to be impaired, the cumulative 
      gain or loss recognised in other comprehensive 
      income is reclassified from the equity reserve 
      to profit or loss and presented as a reclassification 
      adjustment within other comprehensive income. Interest 
      calculated using the effective interest method 
      and dividends are recognised in profit or loss 
      within finance income 
       Revenue recognition 
     Revenue is recognised to the extent that the right 
      to consideration is obtained in exchange for performance. 
      Payment received in advance of performance is deferred 
      on the balance sheet as a liability and released 
      as services are performed or products are exchanged 
      as per the agreement with the customer. 
      Revenue is generated from one main source of income 
      currently. In the current year, revenue is being 
      generated from the Company's Farm-in interests, 
      on an accrued monthly basis, along with the associated 
      Revenue from the production of gas, in which the 
      Company has an interest with other producers, is 
      recognised based on the Company's working interest 
      and the terms of the relevant production sharing 
      contracts. Differences between gas lifted and sold 
      and the Company's share of production are not significant. 
     Interest income is accrued on a time basis, by 
      reference to the principal outstanding and at the 
      effective interest rate applicable, which is the 
      rate that exactly discounts estimated future cash 
      receipts through the expected life of the financial 
      asset to that asset's net carrying amount. 
     Foreign currencies 
     Transactions in currencies other than Sterling 
      are recorded at the rates of exchange prevailing 
      on the dates of the transactions. At each balance 
      sheet date, monetary assets and liabilities that 
      are denominated foreign currencies are retranslated 
      at the rates prevailing on the balance sheet date. 
      Gains and losses arising on retranslation are included 
      in the income statement for the period. 
     On consolidation, the results of overseas operations 
      are translated into sterling at rates approximating 
      to those ruling when the transactions took place. 
      All assets and liabilities of the overseas operations, 
      including goodwill arising on the acquisition of 
      those operations, are translated at the rate ruling 
      at the balance sheet date. Exchange differences 
      arising on translating the opening net assets at 
      opening rate and the results of overseas operations 
      at actual rate are recognised directly in equity 
      (the "foreign exchange reserve"). 
     The tax expense represents the sum of the current 
      tax and deferred tax. 
       The current tax is based on taxable profit for 
       the period. Taxable profit differs from net profit 
       as reported in the income statement because it 
       excludes items of income or expense that are taxable 
       or deductible in other periods and it further excludes 
       items that are never taxable or deductible. The 
       liability for current tax is calculated by using 
       tax rates that have been enacted or substantively 
       enacted by the balance sheet date. 
       Deferred tax is the tax expected to be payable 
       or recoverable on differences between the carrying 
       amount of assets and liabilities in the financial 
       statements and the corresponding tax bases used 
       in the computation of taxable profit, and is accounted 
       for using the balance sheet liability method. Deferred 
       tax liabilities are recognised for all taxable 
       temporary differences and deferred tax assets are 
       recognised to the extent that it is probable that 
       taxable profits will be available against which 
       deductible temporary differences can be utilised. 
       Such assets and liabilities are not recognised 
       if the temporary difference arises from goodwill 
       or from the initial recognition (other than in 
       a business combination) of other assets and liabilities 
       in a transaction which affects neither the tax 
       profit nor the accounting profit. 
       Deferred tax is calculated at the tax rates that 
       are expected to apply to the period when the asset 
       is realised or the liability is settled. Deferred 
       tax is charged or credited in the income statement, 
       except when it relates to items credited or charged 
       directly to equity, in which case the deferred 
       tax is also dealt with in equity. 
     Externally acquired intangible assets 
     Externally acquired intangible assets are initially 
      recognised at cost and subsequently amortised on 
      a straight-line basis over their useful economic 
      lives. The amortisation expense is included within 
      the administrative expenses line in the consolidated 
      income statement. 
       Intangible assets are recognised on business combinations 
       if they are separable from the acquired entity 
       or give rise to other contractual/legal rights. 
       The amounts ascribed to such intangibles are arrived 
       at by using appropriate valuation techniques. 
 1   Summary of significant accounting policies (continued) 
     Impairment of tangible and intangible assets excluding 
     At each balance sheet date the Group reviews the 
      carrying amounts of its tangible and intangible 
      assets to determine whether there is any indication 
      that those assets have suffered an impairment loss. 
      If there is such indication then an estimate of 
      the asset's recoverable amount is performed and 
      compared to the carrying amount. 
       Recoverable amount is the higher of fair value 
       less costs to sell and value in use. In assessing 
       value in use, the estimated future cash flows are 
       discounted to their present value. Where the asset 
       does not generate cash flows that are independent 
       from other assets, the Group estimates the recoverable 
       amount of the cash-generating unit to which the 
       asset belongs. 
       If the recoverable amount of an asset is estimated 
       to be less that its carrying amount, the carrying 
       amount of the asset is reduced to its recoverable 
       amount. An impairment loss is recognised as an 
       expense immediately, unless the relevant asset 
       is carried at a re-valued amount, in which case 
       the impairment loss is treated as a revaluation 
       Where an impairment loss subsequently reverses, 
       the carrying amount of the asset is increased to 
       the revised estimate of its recoverable amount, 
       but so that the increased carrying amount does 
       not exceed the carrying amount that would have 
       been determined had no impairment loss been recognised 
       for the asset in prior periods. A reversal of an 
       impairment loss is recognised as income immediately, 
       unless the relevant asset is carried at a re-valued 
       amount, in which case the reversal of the impairment 
       loss is treated as a revaluation increase. 
     Oil and gas properties and other property, plant 
      and equipment 
      (i) Initial recognition 
      Oil and gas properties and other property, plant 
      and equipment are stated at cost, less accumulated 
      depreciation and accumulated impairment losses. 
      The initial cost of an asset comprises its purchase 
      price or construction cost, any costs directly 
      attributable to bringing the asset into operation, 
      the initial estimate of the decommissioning obligation 
      and, for qualifying assets (where relevant), borrowing 
      costs. The purchase price or construction cost 
      is the aggregate amount paid and the fair value 
      of any other consideration given to acquire the 
      asset. The capitalised value of a finance lease 
      is also included within property, plant and equipment. 
      When a development project moves into the production 
      stage, the capitalisation of certain construction/development 
      costs ceases, and costs are either regarded as 
      part of the cost of inventory or expensed, except 
      for costs which qualify for capitalisation relating 
      to oil and gas property asset additions, improvements 
      or new developments. 
      (ii) Depreciation/amortisation 
      Oil and gas properties are depreciated/amortised 
      on a unit-of-production basis over the total proved 
      developed and undeveloped reserves of the field 
      concerned, except in the case of assets whose useful 
      life is shorter than the lifetime of the field, 
      in which case the straight-line method is applied. 
      Rights and concessions are depleted on the unit-of-production 
      basis over the total proved developed and undeveloped 
      reserves of the relevant area. 
      The unit-of-production rate calculation for the 
      depreciation/amortisation of field development 
      costs takes into account expenditures incurred 
      to date, together with sanctioned future development 
      expenditure. An item of property, plant and equipment 
      and any significant part initially recognised is 
      derecognised upon disposal or when no future economic 
      benefits are expected from its use or disposal. 
      Any gain or loss arising on derecognition of the 
      asset (calculated as the difference between the 
      net disposal proceeds and the carrying amount of 
      the asset) is included in the statement of profit 
      or loss and other comprehensive income when the 
      asset is derecognised. 
      The asset's residual values, useful lives and methods 
      of depreciation/amortisation are reviewed at each 
      reporting period and adjusted prospectively, if 
      (ii) Major maintenance, inspection and repairs 
      Expenditure on major maintenance refits, inspections 
      or repairs comprises the cost of replacement assets 
      or parts of assets, inspection costs and overhaul 
      costs. Where an asset, or part of an asset that 
      was separately depreciated and is now written off 
      is replaced and it is probable that future economic 
      benefits associated with the item will flow to 
      the Company, the expenditure is capitalised. Where 
      part of the asset replaced was not separately considered 
      as a component and therefore not depreciated separately, 
      the replacement value is used to estimate the carrying 
      amount of the replaced asset(s) and is immediately 
      written off. Inspection costs associated with major 
      maintenance programmes are capitalised and amortised 
      over the period to the next inspection. All other 
      day-to-day repairs and maintenance costs are expensed 
      as incurred. 
     Provision for rehabilitation / Decommissioning 
      The Company recognises a decommissioning liability 
      where it has a present legal or constructive obligation 
      as a result of past events, and it is probable 
      that an outflow of resources will be required to 
      settle the obligation, and a reliable estimate 
      of the amount of obligation can be made. 
      The obligation generally arises when the asset 
      is installed or the ground/environment is disturbed 
      at the field location. When the liability is initially 
      recognised, the present value of the estimated 
      costs is capitalised by increasing the carrying 
      amount of the related oil and gas assets to the 
      extent that it was incurred by the development/construction 
      of the field. Any decommissioning obligations that 
      arise through the production of inventory are expensed 
      when the inventory item is recognised in cost of 
      goods sold. 
      Changes in the estimated timing or cost of decommissioning 
      are dealt with prospectively by recording an adjustment 
      to the provision and a corresponding adjustment 
      to oil and gas assets. 
      Any reduction in the decommissioning liability 
      and, therefore, any deduction from the asset to 
      which it relates, may not exceed the carrying amount 
      of that asset. If it does, any excess over the 
      carrying value is taken immediately to the statement 
      of profit or loss and other comprehensive income. 
 1   Summary of significant accounting policies (continued) 
     Provision for rehabilitation / Decommissioning 
      Liability (continued) 
      If the change in estimate results in an increase 
      in the decommissioning liability and, therefore, 
      an addition to the carrying value of the asset, 
      the Company considers whether this is an indication 
      of impairment of the asset as a whole, and if so, 
      tests for impairment. If, for mature fields, the 
      estimate for the revised value of oil and gas assets 
      net of decommissioning provisions exceeds the recoverable 
      value, that portion of the increase is charged 
      directly to expense. Over time, the discounted 
      liability is increased for the change in present 
      value based on the discount rate that reflects 
      current market assessments and the risks specific 
      to the liability. The periodic unwinding of the 
      discount is recognised in the statement of profit 
      or loss and other comprehensive income as a finance 
      cost. The Company recognises neither the deferred 
      tax asset in respect of the temporary difference 
      on the decommissioning liability nor the corresponding 
      deferred tax liability in respect of the temporary 
      difference on a decommissioning asset. 
     Borrowings are recognised initially at fair value, 
      net of any applicable transaction costs incurred. 
      Borrowings are subsequently carried at amortised 
      cost; any difference between the proceeds (net 
      of transaction costs) and the redemption value 
      is recognised in the income statement over the 
      period of the borrowings using the effective interest 
      method (if applicable). 
      Interest on borrowings is accrued as applicable 
      to that class of borrowing. 
     Provisions are recognised for liabilities of uncertain 
      timing or amount that have arisen as a result of 
      past transactions and are discounted at a pre-tax 
      rate reflecting current market assessments of the 
      time value of money and the risks specific to the 
       Financial instruments 
     Financial assets and financial liabilities are 
      recognised on the balance sheet when the Group 
      has become a party to the contractual provisions 
      of the instrument 
       Cash and cash equivalents 
     Cash and cash equivalents comprise cash in hand, 
      cash at bank and short term deposits with banks 
      and similar financial institutions. 
       Trade and other receivables 
     Trade and other receivables do not carry any interest 
      and are stated at their nominal value as reduced 
      by appropriate allowances for estimated irrecoverable 
     Financial liability and equity 
     Financial liabilities and equity instruments are 
      classified according to the substance of the contractual 
      arrangements entered into. An equity instrument 
      is any contract that evidences a residual interest 
      in the assets of the Company after deducting all 
      of its liabilities. 
     Trade and other payables 
     Trade and other payables are non interest bearing 
      and are stated at their nominal value. 
       Equity instruments 
     Equity instruments issued by the Company are recorded 
      at the proceeds received, net of direct issue costs. 
     Share-based payments 
     Where share options are awarded to employees, the 
      fair value of the options at the date of grant 
      is charged to the consolidated income statement 
      over the vesting period. Non-market vesting conditions 
      are taken into account by adjusting the number 
      of equity instruments expected to vest at each 
      balance sheet date so that, ultimately, the cumulative 
      amount recognised over the vesting period is based 
      on the number of options that eventually vest. 
      Market vesting conditions are factored into the 
      fair value of the options granted. As long as all 
      other vesting conditions are satisfied, a charge 
      is made irrespective of whether the market vesting 
      conditions are satisfied. The cumulative expense 
      is not adjusted for failure to achieve a market 
      vesting condition. 
       Where the terms and conditions of options are modified 
       before they vest, the increase in the fair value 
       of the options, measured immediately before and 
       after the modification, is also charged to the 
       consolidated income statement over the remaining 
       vesting period. 
     Where equity instruments are granted to persons 
      other than employees, the consolidated income statement 
      is charged with the fair value of goods and services 
      received. Equity-settled share-based payments are 
      measured at fair value at the date of grant except 
      if the value of the service can be reliably established. 
      The fair value determined at the grant date of 
      equity-settled share-based payments is expensed 
      on a straight-line basis over the vesting period, 
      based on the Company's estimate of shares that 
      will eventually vest. 
 1   Summary of significant accounting policies (continued) 
   Critical accounting estimates and judgements 
     The Group makes estimates and assumptions regarding 
     the future. Estimates and judgements are continually 
     evaluated based on historical experience and other 
     factors, including expectations of future events 
     that are believed to be reasonable under the circumstances. 
     In the future, actual experience may differ from 
     these estimates and assumptions. The estimates 
     and assumptions that have a significant risk of 
     causing a material adjustment to the carrying amounts 
     of assets and liabilities within the next financial 
     year are discussed below. 
     Impairment of goodwill 
   The Group is required to test, on an annual basis, 
    whether goodwill has suffered any impairment. The 
    recoverable amount is determined based on value 
    in use calculations. The use of this method requires 
    the estimation of future cash flows and the choice 
    of a discount rate in order to calculate the present 
    value of the cash flows - actual outcomes may vary. 
    If the carrying amount exceeds the recoverable 
    amount then impairment is made. 
   Useful lives of intangible assets and property, 
    plant and equipment 
   Intangible assets and property, plant and equipment 
    are amortised or depreciated over their useful 
    lives. Useful lives are based on the management's 
    estimates of the period that the assets will generate 
    revenue, which are based on judgement and experience 
    and periodically reviewed for continued appropriateness. 
    Changes to estimates can result in significant 
    variations in the carrying value and amounts charged 
    to the consolidated income statement in specific 
   Share-based payments 
   The Group utilised an equity-settled share-based 
    remuneration scheme for employees. Employee services 
    received, and the corresponding increase in equity, 
    are measured by reference to the fair value of 
    the equity instruments at the date of grant, excluding 
    the impact of any non-market vesting conditions. 
    The fair value of share options are estimated by 
    using Black-Scholes valuation method as at the 
    date of grant. The assumptions used in the valuation 
    are described in note 12 and include, among others, 
    the expected volatility, expected life of the options 
    and number of options expected to vest. 
   Income taxes 
   The Group is subject to income tax in several jurisdictions 
    and significant judgement is required in determining 
    the provision for income taxes. During the ordinary 
    course of business, there are transactions and 
    calculations for which the ultimate tax determination 
    is uncertain. As a result, the Group recognises 
    tax liabilities based on estimates of whether additional 
    taxes and interest will be due. The Group believes 
    that its accruals for tax liabilities are adequate 
    for all open audit years based on its assessment 
    of many factors including past experience and interpretations 
    of tax law. This assessment relies on estimates 
    and assumptions and may involve a series of complex 
    judgments about future events. To the extent that 
    the final tax outcome of such matters is different 
    than the amounts recorded, the differences will 
    impact income tax expense in the period in which 
    such determination is made. 
   Deferred taxation 
   Deferred tax assets are recognised when it is judged 
    more likely than not that they will be recovered. 
        Hydrocarbon reserve and resource estimates 
         Hydrocarbon reserves are estimates of the amount 
         of hydrocarbons that can be economically and legally 
         extracted from the Company's oil and gas properties. 
         The Company estimates its commercial reserves and 
         resources based on information compiled by appropriately 
         qualified persons relating to the geological and 
         technical data on the size, depth, shape and grade 
         of the hydrocarbon body and suitable production 
         techniques and recovery rates. Commercial reserves 
         are determined using estimates of oil and gas in 
         place, recovery factors and future commodity prices, 
         the latter having an impact on the total amount 
         of recoverable reserves and the proportion of the 
         gross reserves which are attributable to the host 
         government under the terms of the Production-Sharing 
         Agreements. Future development costs are estimated 
         using assumptions as to the number of wells required 
         to produce the commercial reserves, the cost of 
         such wells and associated production facilities, 
         and other capital costs. The current long-term 
         gas price assumption used in the estimation of 
         commercial reserves is US$3/MMTBU. The carrying 
         amount of oil and gas development and production 
         assets at 31 December 2016 is shown in Note 9. 
         The Company estimates and reports hydrocarbon reserves 
         in line with the principles contained in the SPE 
         Petroleum Resources Management Reporting System 
         (PRMS) framework. As the economic assumptions used 
         may change and as additional geological information 
         is obtained during the operation of a field, estimates 
         of recoverable reserves may change. Such changes 
         may impact the Company's reported financial position 
         and results, which include: 
          *    The carrying value of exploration and evaluation 
               assets; oil and gas properties; property, plant and 
               equipment; and goodwill may be affected due to 
               changes in estimated future cash flows 
          *    Depreciation and amortisation charges in the 
               statement of profit or loss and other comprehensive 
               income may change where such charges are determined 
               using the Units of Production (UOP) method, or where 
               the useful life of the related assets change 
          *    Provisions for decommissioning may require revision - 
               where changes to the reserve estimates affect 
               expectations about when such activities will occur 
               and the associated cost of these activities 
          *    The recognition and carrying value of deferred tax 
               assets may change due to changes in the judgements 
               regarding the existence of such assets and in 
               estimates of the likely recovery of such assets 
 1   Summary of significant accounting policies (continued) 
   Critical accounting estimates and judgements (continued) 
   Exploration and evaluation expenditures 
    The application of the Company's accounting policy 
    for exploration and evaluation expenditure requires 
    judgement to determine whether future economic 
    benefits are likely, from future either exploitation 
    or sale, or whether activities have not reached 
    a stage which permits a reasonable assessment of 
    the existence of reserves. The determination of 
    reserves and resources is itself an estimation 
    process that involves varying degrees of uncertainty 
    depending on how the resources are classified. 
    These estimates directly impact when the Company 
    defers exploration and evaluation expenditure. 
    The deferral policy requires management to make 
    certain estimates and assumptions about future 
    events and circumstances, in particular, whether 
    an economically viable extraction operation can 
    be established. Any such estimates and assumptions 
    may change as new information becomes available. 
    If, after expenditure is capitalised, information 
    becomes available suggesting that the recovery 
    of the expenditure is unlikely, the relevant capitalised 
    amount is written off in the statement of profit 
    or loss and other comprehensive income in the period 
    when the new information becomes available. 
        Units of production (UOP) depreciation of oil and 
         gas assets 
         Oil and gas properties are depreciated using the 
         UOP method over total proved developed and undeveloped 
         hydrocarbon reserves. This results in a depreciation/amortisation 
         charge proportional to the depletion of the anticipated 
         remaining production from the field. 
         The life of each item, which is assessed at least 
         annually, has regard to both its physical life 
         limitations and present assessments of economically 
         recoverable reserves of the field at which the 
         asset is located. These calculations require the 
         use of estimates and assumptions, including the 
         amount of recoverable reserves and estimates of 
         future capital expenditure. The calculation of 
         the UOP rate of depreciation/amortisation will 
         be impacted to the extent that actual production 
         in the future is different from current forecast 
         production based on total proved reserves, or future 
         capital expenditure estimates change. Changes to 
         the proved reserves could arise due to changes 
         in the factors or assumptions used in estimating 
         reserves, including: 
          *    The effect on proved reserves of differences between 
               actual commodity prices and commodity price 
          *    Unforeseen operational issues 
   Recoverability of oil and gas assets 
    The Company assesses each asset or cash generating 
    unit (CGU) (excluding goodwill, which is assessed 
    annually regardless of indicators) each reporting 
    period to determine whether any indication of impairment 
    exists. Where an indicator of impairment exists, 
    a formal estimate of the recoverable amount is 
    made, which is considered to be the higher of the 
    fair value less costs of disposal (FVLCD) and value 
    in use (VIU). The assessments require the use of 
    estimates and assumptions such as long-term oil 
    prices (considering current and historical prices, 
    price trends and related factors), discount rates, 
    operating costs, future capital requirements, decommissioning 
    costs, exploration potential, reserves (see (a) 
    Hydrocarbon reserves and resource estimates above) 
    and operating performance (which includes production 
    and sales volumes). These estimates and assumptions 
    are subject to risk and uncertainty. Therefore, 
    there is a possibility that changes in circumstances 
    will impact these projections, which may impact 
    the recoverable amount of assets and/or CGUs. 
   Decommissioning costs 
    Decommissioning costs will be incurred by the Company 
    at the end of the operating life of some of the 
    Company's facilities and properties. The Company 
    assesses its decommissioning provision at each 
    reporting date. The ultimate decommissioning costs 
    are uncertain and cost estimates can vary in response 
    to many factors, including changes to relevant 
    legal requirements, the emergence of new restoration 
    techniques or experience at other production sites. 
    The expected timing, extent and amount of expenditure 
    may also change - for example, in response to changes 
    in reserves or changes in laws and regulations 
    or their interpretation. 
    Therefore, significant estimates and assumptions 
    are made in determining the provision for decommissioning. 
    As a result, there could be significant adjustments 
    to the provisions established which would affect 
    future financial results. 
    External valuers may be used to assist with the 
    assessment of future decommissioning costs. The 
    involvement of external valuers is determined on 
    a case by case basis, taking into account factors 
    such as the expected gross cost or timing of abandonment, 
    and is approved by the Company's Audit Committee. 
    Selection criteria include market knowledge, reputation, 
    independence and whether professional standards 
    are maintained. The provision at reporting date 
    represents management's best estimate of the present 
    value of the future decommissioning costs required. 
   Equity reserves 
   Share capital is determined using the nominal value 
    of shares that have been issued. 
    The share premium account represents premiums received 
    on the initial issuing of the share capital. Any 
    transaction costs associated with the issuing of 
    shares are deducted from share premium, net of 
    any related income tax benefits. 
    The share based payment reserve represents the 
    cumulative amount which has been expensed in the 
    income statement in connection with share based 
    payments, less any amounts transferred to retained 
    earnings on the exercise of share options. 
    Available Sale Financial Asset & Hedging reserve 
    represents the market value movement of AFS investments, 
    and the market value movement of the Company's 
    share price in accordance with the Derivative Assets 
    the Company holds, including the Equity Swap Asset. 
    Retained earnings include all current and prior 
    period results as disclosed in the income statement 
 1   Summary of significant accounting policies (continued) 
     Going Concern 
     The Directors noted the losses that the Company 
      has made for the Year Ended 31 December 2016. The 
      Directors have prepared cash flow forecasts for 
      the period ending 30 June 2018 which take account 
      of the current cost and operational structure of 
      the Company. 
      The cost structure of the Company comprises a high 
      proportion of discretionary spend and therefore 
      in the event that cash flows become constrained, 
      costs can be quickly reduced to enable the Company 
      to operate within its available funding. 
      These forecasts demonstrate that the Company has 
      sufficient cash funds available to allow it to 
      continue in business for a period of at least twelve 
      months from the date of approval of these financial 
      statements. Accordingly, the financial statements 
      have been prepared on a going concern basis. 
      It is the prime responsibility of the Board to 
      ensure the Company remains a going concern. At 
      31 December 2016 the Company had cash and cash 
      equivalents of GBP600,000 and borrowings of GBPnil. 
      The Company has minimal contractual expenditure 
      commitments and the Board considers the present 
      funds sufficient to maintain the working capital 
      of the Company for a period of at least 12 months 
      from the date of signing the Annual Report and 
      Financial Statements. For these reasons the Directors 
      adopt the going concern basis in the preparation 
      of the Financial Statements. 
     Turnover and 
 2    segmental analysis 
     An operating segment is a distinguishable component 
      of the Company that engages in business activities 
      from which it may earn revenues and incur expenses, 
      whose operating results are regularly reviewed 
      by the Company's chief operating decision maker 
      to make decisions about the allocation of resources 
      and assessment of performance and about which discrete 
      financial information is available. The chief operating 
      decision maker has defined that the Company's only 
      reportable operating segment during the period 
      is that of oil & gas exploration & production.. 
      The Company's current revenue is all generated 
      in Tanzania from oil & gas production in accordance 
      with its farm-in/profit sharing agreements, within 
      Tanzania. However with this segment in its first 
      period of production, and with the only major related 
      transactions being the carrying value of the oil 
      & gas properties assets as described in note 9, 
      no further segmental analysis is deemed useful 
      to disclose currently. The first period's revenue 
      from this segmental was GBP501,000 (2015: GBPnil). 
      Subject to further acquisitions, the company expects 
      to further review its segmental information during 
      the forthcoming financial year and update accordingly. 
      In respect of the total assets, GBP2,541,000 (2015: 
      GBP1,963,000) arise in the UK, and GBP300,000 (2015: 
      GBP300,000) arise in Canada, GBP12,689,000 arise 
      in Tanzania (2015: GBP11,092,000), and GBP576,000 
      arise in Nigeria (2015: GBP576,000). 
                                                                                             Year ended     Year ended 
                                                                                            31 December    31 December 
                                                                                                   2016           2015 
 3    Operating loss                                                                           GBP000's       GBP000's 
      Loss from operations has been arrived at after charging: 
   Directors fees                                                                                   267            279 
   Salaries and wages                                                                                40             35 
   Audit fees                                                                                        13             13 
       Share-based payments                                                                          49              - 
      Amounts payable to auditors and their associates in respect of both audit and 
      non-audit services: 
   Audit services - statutory audit - Chapman Davis LLP                                              13             13 
                                                                                          -------------  ------------- 
                                                                                                     13             13 
                                                                                          =============  ============= 
 4    Employee information and directors emoluments 
                                                                                      Year ended          Year ended 
                                                                                31 December 2016    31 December 2015 
                                                                                        GBP000's            GBP000's 
                                                                              ------------------  ------------------ 
      Staff information 
  The average number of employees (excluding executive directors) was :                        1                   1 
                                                                              ------------------  ------------------ 
      Their aggregate remuneration comprised :                                          GBP000's            GBP000's 
  Wages and salaries                                                                          40                  35 
                                                                              ------------------  ------------------ 
  Total                                                                                       40                  35 
                                                                              ------------------  ------------------ 
      Directors' remuneration 
  Total                                                                                      314                 279 
                                                                              ------------------  ------------------ 
                                 Salary and fees   Share-based payments       Total 
  Year ended 31 December 2016           GBP000's               GBP000's    GBP000's 
  Neil Ritson                                125                     12         137 
  Don Strang                                  58                      9          67 
  Dan Maling (*2)                             24                     15          39 
  Fergus Jenkins                              40                     11          51 
  Sandy Barblett (*1)                         20                      -          20 
                                             267                     47         314 
                                ================  =====================  ========== 
                                 Salary and fees   Share-based payments       Total 
  Year ended 31 December 2015           GBP000's               GBP000's    GBP000's 
  Neil Ritson                                125                      -         125 
  Don Strang                                  90                      -          90 
  Fergus Jenkins                              40                      -          40 
  Sandy Barblett                              24                      -          24 
                                             279                      -         279 
                                ================  =====================  ========== 

(*1) Resigned as a director on 10 August 2016.

(*2) Appointed as a director on 10 August 2016.

                                                                                        Year ended          Year ended 
                                                                                  31 December 2016    31 December 2015 
 5    Taxation                                                                            GBP000's            GBP000's 
      Current tax expense 
      UK corporation tax and income tax of overseas operations on profits for 
      the period                                                                                 -                   - 
      Total income tax expense                                                                   -                   - 
                                                                                ==================  ================== 
      The reasons for the difference between the actual tax charge for the 
      period and the standard 
      rate of corporation tax in the UK applied to profits for the year are as 
  Loss for the period                                                                        (524)             (2,773) 
  Standard rate of corporation tax in the UK                                                   20%              20/21% 
  Loss on ordinary activities multiplied by the standard rate of corporation 
   tax                                                                                       (105)               (562) 
                                                                                ------------------  ------------------ 
  Expenses not deductible for tax purposes                                                      70                 304 
  Future income tax benefit not brought to account                                              35                 258 
                                                                                ------------------  ------------------ 
  Current tax charge for period                                                                  -                   - 
                                                                                ==================  ================== 
  No deferred tax asset has been recognised because there is uncertainty of the timing of suitable 
   future profits against which they can be recovered. 
                                                       Year ended          Year ended 
                                                 31 December 2016    31 December 2015 
 6    Finance costs                                      GBP000's            GBP000's 
  Loan Interest                                                 2                  39 
  Finance fees                                                  -                  23 
  Losses on settled equity swap payments                       27                 307 
  Share-based payments                                          -                  17 
                                               ------------------  ------------------ 
  Total                                                        29                 386 
                                               ==================  ================== 
                                                                                        Year ended          Year ended 
                                                                                  31 December 2016    31 December 2015 
 7    Loss per share                                                                      GBP000's            GBP000's 
      The calculation of loss per share is based on the loss after taxation 
      divided by the weighted 
      average number of shares in issue during the period: 
    Net loss after taxation (GBP000's)                                                       (524)             (2,773) 
      Number of shares 
  Weighted average number of ordinary shares for the purposes of basic loss 
   per share (millions)                                                                    6,091.4             5,390.5 
  Basic and diluted loss per share (expressed in pence)                                     (0.01)              (0.05) 
                                                                                ==================  ================== 
    As inclusion of the potential ordinary shares would result in a decrease in the earnings per 
    share they are considered to be anti-dilutive, as such, a diluted earnings per share is not 
 8    Intangible assets 
                                                 Deferred exploration expenditure       Total 
                                                                         GBP000's    GBP000's 
  As at 31 December 2014                                                   11,101      11,101 
                                                ---------------------------------  ---------- 
  Additions                                                                 2,649       2,649 
  As at 31 December 2015                                                   13,750      13,750 
                                                ---------------------------------  ---------- 
  Additions                                                                 1,597       1,597 
  Transfer to Oil & Gas Properties                                        (2,758)     (2,758) 
  As at 31 December 2016                                                   12,589      12,589 
                                                ---------------------------------  ---------- 
      Accumulated amortisation and impairment 
  Balance at 31 December 2014                                               2,058       2,058 
                                                ---------------------------------  ---------- 
  Impairment charge                                                           300         300 
  Balance at 31 December 2015                                               2,358       2,358 
                                                ---------------------------------  ---------- 
      Impairment charge                                                         -           - 
  Balance at 31 December 2016                                               2,358       2,358 
                                                ---------------------------------  ---------- 
    Net book value 
    As at 31 December 2016                                                 10,231      10,231 
                                                ---------------------------------  ---------- 
  As at 31 December 2015                                                   11,392      11,392 
                                                ---------------------------------  ---------- 
   Impairment Review 
    The Directors have carried out an impairment review as at 31 December 2016, and determined 
    that an impairment charge is not currently required. The Directors based this assessment on 
    recent successful drilling at Ntorya-2 and continuing planned appraisal works in its Tanzanian,, 
    Ruvuma Basin licences. 
 9    Oil & Gas properties 
                                                             Oil & Gas Properties       Total 
                                                                         GBP000's    GBP000's 
      As at 31 December 2014 and at 31 December 2015                            -           - 
                                                            ---------------------  ---------- 
  Transfer from intangible assets                                           2,758       2,758 
  As at 31 December 2016                                                    2,758       2,758 
                                                            ---------------------  ---------- 
      Accumulated amortisation and impairment 
      Balance at 31 December 2014 and at 31 December 2015                       -           - 
                                                            ---------------------  ---------- 
  Amortisation charge                                                         275         275 
  Balance at 31 December 2016                                                 275         275 
                                                            ---------------------  ---------- 
    Net book value 
    As at 31 December 2016                                                  2,483       2,483 
                                                            ---------------------  ---------- 
  As at 31 December 2015                                                        -           - 
                                                            ---------------------  ---------- 
   Impairment Review 
    The Oil & Gas properties comprise the 7.175% participating interest in the Kiliwani North, 
    in Tanzania. 
    The Directors have carried out an impairment review as at 31 December 2016, and determined 
    that an impairment charge is not currently required. The Directors based this assessment on 
    continuing operational work schedules that are ongoing to improve operational efficiencies 
    and production. 
 10    Available for sale financial assets 
                                                                                31 December 2016    31 December 2015 
       Investment in listed and unlisted securities                                     GBP000's            GBP000's 
  Valuation at beginning of the period                                                     1,192               1,522 
  Additions at cost                                                                            -                 335 
  Foreign exchange (loss)                                                                      -                (12) 
  Impairment provision - Burj Africa                                                           -               (575) 
  Decrease in value of listed investment                                                    (11)                (78) 
                                                                             -------------------  ------------------ 
  Valuation at the end of the period                                                       1,181               1,192 
                                                                             ===================  ================== 
       The available for sale investments splits are as below: 
  Non-current assets - listed                                                                  5                  16 
  Non-current assets - unlisted                                                            1,176               1,176 
                                                                             -------------------  ------------------ 
                                                                                           1,181               1,192 
  On 29 April 2015, the Company completed its exchange of its shareholding in Pan Minerals Oil 
   and Gas AG ("Pan Minerals") for a direct holding of 15.9% in Burj Petroleum Africa Limited 
   ("Burj Africa"), a private UK registered company created with the purpose of participating 
   in the current marginal field licensing round in Nigeria. The Company also entered into an 
   agreement to increase its investment in Burj Africa by acquiring an additional 5% holding 
   in Burj Africa through a payment of US$200,000 in cash and, the equivalent of US$300,000 in 
   39,750,000 new Ordinary Shares at an issue price of 0.51 p per share. This was completed on 
   6 May 2015, as such the Company holds a total interest of 20% in Burj Africa. The holding 
   cost of the Company's shares in Pan Minerals was equal to the acquisition cost of those shares, 
   approximately GBP800,000. And thus following the transaction to convert those shares to a 
   holding in Burj Africa and the acquisition of additional Burj Africa shares took the total 
   holding value in Solo's accounts to approximately GBP1.1 million. On reviewing the carrying 
   value at 31 December 2015, the Directors made the decision to make an impairment provision 
   against Burj of 50%, GBP575,000. With recent improvements in the oil price and political landscape 
   and activity levels in Nigeria the Directors believe the carrying values at 31 December 2016 
   to be appropriate. 
  Available-for-sale investments comprise investments in unlisted and listed securities which 
   are traded on stock market throughout the world, and are held by the Company as a mix of strategic 
   and short term investments. 
 11    Investment in subsidiaries 
                                                    31 December 2016                    31 December 2015 
                                                            GBP000's                            GBP000's 
       As at 1 July                                                -                                   - 
       Additions                                                   -                                   - 
       At 31 December                                              -                                   - 
                                          --------------------------  ---------------------------------- 
       The only subsidiary of Solo Oil Plc, which is dormant, and has been since incorporation, is 
        as follows: 
       Name                                Country of incorporation    Proportion of ownership interest 
  Solo Oil International Limited                    UK                               100% 
 12    Trade and other receivables 
                                                                    31 December 2016        31 December 2015 
       Current trade and other receivables                                  GBP000's                GBP000's 
       Trade receivables                                                         583                       - 
  Loan to Horse Hill Developments Ltd                                            658                     369 
  Prepayments                                                                     14                      66 
  Other debtors                                                                   81                      88 
                                                              ----------------------  ---------------------- 
                                                                               1,336                     523 
                                                              ======================  ====================== 
  The directors consider that the carrying amount of trade and other receivables approximates 
   to their fair value. 
 13    Derivative financial instrument 
                                                                         31 December 2016            31 December 2015 
       Equity Swap                                                               GBP000's                    GBP000's 
  Fair value at 1 January                                                           (314)                         489 
  Settlements during the year                                                         450                         110 
  (Losses) on settlements                                                           (136)                       (307) 
  Provision at 31 December                                                              -                       (606) 
                                                               --------------------------  -------------------------- 
  Fair value at 31 December                                                             -                       (314) 
                                                               ==========================  ========================== 
  On 24 September 2014, the Company announced that it had entered into an equity swap arrangement 
   ("the Equity Swap Agreement") with YAGM over 157,894,737 of the Subscription Shares ("the 
   Swap Shares"). In return for a payment by the Company to YAGM of GBP750,000, twelve monthly 
   settlement payments in respect of such payment were to be made by YAGM to the Company, or 
   by the Company to YAGM, based on a formula related to the difference between the prevailing 
   market price (as defined in the Equity Swap Agreement) of the Company's ordinary shares in 
   any month and a "benchmark price" that is 5% above the Subscription Price. Thus the funds 
   received by the Company in respect of the Swap Shares are dependent on the future price performance 
   of the Company's ordinary shares. 
   By 31 December 2014, no swaps had been closed out and no payments received from or made to 
   YAGM. The full remaining balance has been fair valued at 31 December 2014, resulting in a 
   provision with the resultant charge disclosed in the Income Statement. 
   On 27 March 2015, the Company agreed in exchange for a deferral payment of US$50,000 to YAGM 
   to defer the start of the settlement Dates under the Swap Agreement until 1 May 2015. 
   During the year ended 31 December 2015, the Company completed 3 monthly settlements (October 
   - December 2015), which as a result of the decline in the Company's share price realised a 
   loss on settlement of GBP307,000 for the 3 months. 
   As at 31 December 2015, the remaining balance has been fair valued, resulting in a creditor 
   balance of GBP314,000, and incurring an unrealised loss on revaluation of GBP606,000 through 
   the income statement. 
   During the year ended 31 December 2016, the Company settled the swap for a total of GBP450,000 
   paid to YAGM, no further Swap arrangements have been entered into by the Company. 
   14    Trade and other payables 
                                                                      31 December 2016         31 December 2015 
         Current trade and other payables                                     GBP000's                 GBP000's 
  Trade payables                                                                   404                       55 
  Other payables                                                                    18                      138 
  Accruals                                                                          22                       41 
                                                                                   444                      234 
                                                              ========================  ======================= 
  The directors consider that the carrying amount of trade payables approximates to their fair 
 15     Borrowings 
                                                                      31 December 2016    31 December 2015 
        Current trade and other payables                                      GBP000's            GBP000's 
        Loans - other (unsecured)                                                    -                 112 
                                                                                     -                 112 
                                                                     =================  ================== 
        On 24 September 2014, the Company agreed a US$5million debt facility with YA Global Master 
         SPV ("YAGM"), and drew down the first US$1million on that date. This loan carried a twelve 
         month repayment schedule at a fixed coupon of 10%. Any subsequent drawdowns were to be on 
         the same terms and subject to approval by YAGM. This initial drawdown was fully repaid during 
         the year ended 31 December 2015. 
         On 26 March 2015, the Company drew down a further US500,000 from the agreed debt facility, 
         under the same repayment terms as above. As at 31 December 2015, four instalments remained 
         outstanding, all of which have now been fully repaid during the year ended 31 December 2016 
         in accordance with the terms of the loan. No further debt facilities have been entered into 
         by the Company. 
  16    Share capital 
                                                                      Number of shares       Nominal value 
        a) Called up, allotted, issued and fully paid: Ordinary 
        shares of 0.01p each 
                                                                     -----------------  ------------------ 
        As at 31 December 2014                                           5,013,194,207                 501 
                                                                     =================  ================== 
        10 February 2015 - Placing for cash at 0.5p                        140,000,000                  14 
        21 April 2015 - Placing for cash at 0.55p                          363,636,364                  37 
        30 April 2015 - Non-cash issue at 0.51p on acquisition of 
        Burj Petroleum Africa Ltd                                           39,750,000                   4 
        As at 31 December 2015                                           5,556,580,571                 556 
                                                                     =================  ================== 
        7 April 2016 - Placing for cash at 0.25p                           320,000,000                  32 
        23 September 2016 - Placing for cash at 0.18p                    1,111,111,111                 111 
                                                                     =================  ================== 
        As at 31 December 2016                                           6,987,691,682                 699 
                                                                     =================  ================== 
        b) Deferred shares 
        Deferred shares of 0.69 pence each (2015: 265,324,634)             265,324,634               1,831 
                                                                     =================  ================== 
        c) Total Share options in issue 
        During the year 212,500,000 options were granted (2015: nil). 
        As at 31 December 2016 the options in issue were: 
        Exercise Price                               Expiry Date                          Options in Issue 
                                                                                          31 December 2015 
        1.54p                                       30 April 2018                                7,000,000 
        0.5p                                       31 December 2020                            204,000,000 
        0.5p                                       31 December 2020                             68,500,000 
        0.3p                                       31 December 2020                            100,000,000 
        0.35p                                      31 October 2021                             212,500,000 
        No options were exercised during the period (2015: nil). 
        No options lapsed during the period (2015: 28million). No options were cancelled during the 
         period (2015: nil). 
        d) Total warrants in issue 
        During the year, no warrants were issued (2015: 15,328,167). 
        No warrants lapsed or were cancelled or exercised during the year (2015: nil). 
        As at 31 December 2016 the 31,952,777 warrants at 1.2p & 0.69p per share were outstanding. 
         (2015: 31,952,777) 
 17    Share based payment 
         During the year the Company issued no options 
         but did issue warrants in relation to loan draw-down 
         financing. The total options and warrants and 
         movements therein during the year were as follows: 
                                                        31 December                   31 December 
                                                            2016                          2015 
                                                      Weighted        Number      Weighted         Number 
                                                       average                     average 
                                                      exercise                    exercise 
                                                         price                       price 
                                                       (pence)                     (pence) 
  Outstanding at the 
   beginning of the period                               0.333   411,452,777         0.497    424,124,610 
  Granted during the 
   period - warrants                                         -             -          0.69     15,328,167 
  Granted during the 
   period - options                                       0.35   212,500,000             -              - 
       Cancelled during the                                  -             -             -              - 
        period - options 
       Exercised during the                                  -             -             -              - 
  Lapsed during the period 
   - options                                                 -             -           0.5   (28,000,000) 
       Lapsed during the period                              -             -             -              - 
        - warrants 
                                              ----------------  ------------  ------------  ------------- 
  Outstanding at the 
   end of the period - 
   Options & warrants                                    0.452   623,952,777         0.333    411,452,777 
                                              ----------------  ------------  ------------  ------------- 
       The exercise price of options outstanding at the 
        end of the year ranged between 1.54p and 0.30p, 
        and the exercise price of warrants outstanding 
        at the end of the year ranged between 1.2p and 
       The weighted average fair value of each option 
        granted during the period was 0.12p (2015: options 
       The Company used the Black-Scholes model to determine 
        the value of the options and the inputs were as 
                                               Issue 1/11/2016 
  Share price at 
   grant (pence)                                          0.21 
  Fair Value price 
   at grant (pence)                                       0.12 
  Expected volatility 
   (%)                                                   82.2% 
       Expected life (years)                           5 years 
  Risk free rate 
   (%)                                                   0.61% 
  Expected dividends                                       nil 
  Expected volatility was determined by using the 
   Company's share price for the preceding 12 months. 
  The total share-based payment expense in the year 
   for the Company was GBP49,000l expense in relation 
   to options (2015: GBPnil) and GBPnil finance charges 
   in relation to warrants (2015: GBP17,000). 
  Employee Benefit Trust 
    The Company established on 7 December 2012, an 
    employee benefit trust called the Solo Oil Employee 
    Benefit Trust ("EBT") to implement the use of 
    the Company's existing share incentive plan over 
    5% of the Company's issued share capital from 
    time to time in as efficient a manner as possible 
    for the beneficiaries of that plan. The EBT is 
    a discretionary trust for the benefit of directors 
    and employees of the Company and its subsidiaries. 
    No further subscriptions for shares in the Company 
    has been made by the EBT during the years ended 
    31 December 2016 and 2015. 
 18   Financial instruments 
      The Company is exposed through its operations 
       to one or more of the following financial risks: 
      -- Fair value or cash flow interest rate risk 
      -- Foreign currency risk 
      -- Liquidity risk 
      -- Credit risk 
      -- Market risk 
        Policy for managing these risks is set by the 
        Board. The policy for each of the above risks 
        is described in more detail below. 
        Fair value and cash flow interest rate risk 
      Currently the Company does not have external borrowings. 
       However, the Company has a policy of holding debt 
       at a floating rate. The directors will revisit 
       the appropriateness of this policy should the 
       Company's operations change in size or nature. 
       Operations are not permitted to borrow long-term 
       from external sources locally. 
        Foreign currency risk 
      Foreign exchange risk arises because the Company 
       has operations located in various parts of the 
       world whose functional currency is not the same 
       as the functional currency in which the company's 
       investments are operating. The Company's net assets 
       are exposed to currency risk giving rise to gains 
       or losses on retranslation into sterling. Only 
       in exceptional circumstances will the Company 
       consider hedging its net investments in overseas 
       operations as generally it does not consider that 
       the reduction in volatility in consolidated net 
       assets warrants the cash flow risk created from 
       such hedging techniques. 
        Liquidity risk 
      The liquidity risk of each entity is managed centrally 
       by the treasury function. Each operation has a 
       facility with treasury, the amount of the facility 
       being based on budgets. The budgets are set locally 
       and agreed by the board annually in advance, enabling 
       the cash requirements to be anticipated. Where 
       facilities of entities need to be increased, approval 
       must be sought from the finance director. Where 
       the amount of the facility is above a certain 
       level agreement of the board is needed. 
        All surplus cash is held centrally to maximise 
        the returns on deposits through economies of scale. 
        The type of cash instrument used and its maturity 
        date will depend on the forecast cash requirements. 
        Credit risk 
      The Company is mainly exposed to credit risk from 
       credit sales. It is Company policy, implemented 
       locally, to assess the credit risk of new customers 
       before entering contracts. Such credit ratings 
       are taken into account by local business practices. 
      The Company does not enter into complex derivatives 
       to manage credit risk, although in certain isolated 
       cases may take steps to mitigate such risks if 
       it is sufficiently concentrated. 
        Market risk 
      As the company is now investing in listed companies, 
       the market risk will be that of finding suitable 
       investments for the company to invest in and the 
       returns that those investments will return given 
       the markets that in which investments are made. 
 19    Related party transactions 
         The company had the following amounts outstanding 
         from its investee companies (Note 10) at 31 December:                                           2016       2015 
                                                 GBP'000    GBP'000 
          Horse Hill Development Ltd ("Horse 
           Hill")                                    658        369 
                                               ---------  --------- 
         The above loan outstanding is included within trade 
         and other receivables, Note 12. The loan to Horse 
         Hill has been made in accordance with the terms 
         of the investment agreement whereby it accrues 
         interest daily at the Bank of England base rate 
         and is repayable out of future cash flows. 
         There were no transactions between the parent and 
         its dormant subsidiary, which are related parties, 
         during the period. Details of director's remuneration, 
         being key personnel, are given in note 4. 
       Remuneration of Key Management Personnel 
        The remuneration of the directors, and other key 
        management personnel of the Company, is set out 
        below in aggregate for each of the categories specified 
        in IAS24 Related party Disclosures. 
                                                                                     Year ended                    Year ended 
                                                                                    31 December                   31 December 
                                                                                           2016                          2015 
                                                                                       GBP'000s                      GBP'000s 
  Short-term employee benefits                                                              317                           314 
       Share-based payments                                                                  47                             - 
                                                                   ----------------------------  ---------------------------- 
                                                                                            364                           314 
                                                                   ----------------------------  ---------------------------- 
 20   Ultimate controlling party 
      In the opinion of the directors there is no controlling 
 21   Retirement benefit scheme 
      The Company does not operate either a defined 
       contribution or defined benefit retirement scheme. 
 22   Commitments 
      As at 31 December 2016, the Company had no material 
 23   Post balance sheet event 
      On 16 February 2017, Solo announced that the Company 
       had raised GBP2,000,000 (before expenses) through 
       a Company sponsored placing (the "Placing") of 
       400,000,000 new ordinary shares of 0.01p (the 
       "Placing Shares") at a price of 0.50p per Placing 
       Share (the "Placing Price") representing approximately 
       5.7% of the issued share capital prior to Admission 
       of the Placing Shares.. 
       On 22 March 2017, Solo announced that it had agreed 
       to acquire a 10% interest in Helium One Limited 
       ("Helium One") for a total consideration of GBP2.55 
       million (the "Initial Investment"). Solo has also 
       been granted a 90-day call option to increase 
       its investment in Helium One by a further 10%, 
       for an additional investment of GBP4million, which 
       would increase its stake to 20%. The Initial Investment 
       is for 10% of the post-money issued capital of 
       Helium One. The consideration totalling GBP2.55 
       million is comprised GBP1.2 million in cash and 
       GBP1.35 million payable by the issue to Helium 
       One of such number of fully paid ordinary shares 
       in Solo ("Consideration Shares") at a Solo share 
       price equal to the five trading day VWAP immediately 
       prior to the issue of those shares. The Consideration 
       Shares will be issued subject to the terms of 
       a standard orderly market agreement and admission 
       to trading on AIM. The cash element payable by 
       Solo is being funded by the Subscription as set 
       out below. Upon closing of the Initial Investment 
       the Company shall grant to Solo the right to subscribe 
       for one share for every one share subscribed for 
       under the Initial Investment at a price of US$0.40 
       per share for a period of 2 years from the date 
       of grant. Helium One will additionally be issued 
       236,842,105 shares based on the calculated five 
       trading day VWAP of 0.57p per Consideration Share. 
       Also on 22 March 2017, Solo announced it had raised 
       GBP1,200,000 (before expenses) with institutional 
       and private investors through a Company arranged 
       subscription (the "Subscription") of 222,222,222 
       new ordinary shares of 0.01p (the "Subscription 
       Shares") at a price of 0.54p per Subscription 
       Share (the "Subscription Price") representing 
       approximately 3.0 % of the issued share capital 
       prior to Admission of the Subscription Shares. 
       On 11 May 2017, Solo announced that the Company's 
       Non-Executive Chairman, Neil Ritson, will take 
       up the role of Executive Chairman with immediate 
       On 23 May 2017, Solo announced that they had cancelled 
       the General Meeting, notice of which was given 
       on 19 May 2017, in regards to the approval of 
       further fund-raising, investment policy update, 
       and authority to allot the shares necessary to 
       complete the second stage investment into Helium 
       One Ltd as detailed above The Company announced 
       they had made the decision not to exercise the 
       call option with Helium One, and thus had terminated 
       plans to raise the funds to complete that transaction.. 

Note to the announcement:

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2016 or 2015. The financial information for the year ended 31 December 2015 is derived from the statutory accounts for that year. The audit of statutory accounts for the year ended 31 December 2016 is complete.

This information is provided by RNS

The company news service from the London Stock Exchange



(END) Dow Jones Newswires

June 15, 2017 02:00 ET (06:00 GMT)

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