Solo Oil Plc Ntorya Appraisal Area Major Resource Upgrade (0553D)

TIDMSOLO

RNS Number : 0553D

Solo Oil Plc

24 April 2017

   FOR IMMEDIATE RELEASE, Embargoed until 7 am                                     24 April 2017 

SOLO OIL PLC

("Solo" or the "Company")

Ntorya Appraisal Area - Major Resource Upgrade

Solo is pleased to announce that in collaboration with operator, Aminex plc ("Aminex"), it can report a material increase in its estimate of gas initially in place ("GIIP") associated with the Ntorya gas-condensate discoveries in the Ntorya Appraisal Area, Tanzania. The potential of the Ntorya Appraisal Area, which comprises approximately 750 square kilometres of the Ruvuma Petroleum Sharing Agreement ("Ruvuma PSA"), has now been successfully tested by two gas wells; Ntorya-1 and -2.

Following the Ntorya-2 well the Company now considers that the Ntorya Appraisal Area contains proven mean gross GIIP of 466 billion cubic feet ("bcf"), a three-fold increase over the previous estimate of 153 bcf which was independently audited by LR Senergy in May 2015, prior to the drilling of Ntorya-2.

Highlights:

   --    Mean gross GIIP increased by 200% from 153 bcf to 466 bcf 
   --    High estimate gross GIIP increased by 240% from 332 bcf to 1.13 tcf 

-- Most likely gross Contingent Resources (2C) increased by 165% from 70 bcf to 186 bcf (Solo estimate)

-- High estimate gross Contingent Resources (3C) increased by 230% from 232 bcf to 766 bcf (Solo estimate)

These new Solo contingent resource estimates cover the Ntorya Appraisal Area only and do not include the potential of the adjoining Ruvuma PSA exploration licences which is also being reassessed.

Neil Ritson, Solo's Chairman commented:

"The Ntorya-2 well, in conjunction with the existing well and seismic control, allow a new more confident and upgraded estimate of the gas in place and the associated contingent resources associated with the successful appraisal well. As a result Aminex is currently applying for a 25-year development licence and is working directly with the Tanzanian Government on means to fast-track gas production."

The upgraded estimate follows the drilling and testing of the Ntorya-2 appraisal well earlier this year which encountered a net pay zone of 31 metres and tested gas at an average flow rate of 17 million standard cubic feet per day ("mmscfd") (approximately 2,830 barrels oil equivalent per day) through a 40/64-inch choke. The previous well, Ntorya-1, was tested at a rate of 20 mmscfd through a 1-inch choke. Solo believes that higher flow rates can be achieved at Ntorya-2 during future production once the drilling induced formation damage is removed.

According to the interpretation of the wireline logs, Ntorya-2 encountered the equivalent reservoir section seen in the Ntorya-1 well at a depth approximately 74 metres shallower. No formation water was produced during the tests. The fluids recovered down-dip at Ntorya-1 showed a higher condensate-gas ratio and this suggests some fractionation of fluids with depth, further suggesting an extensive gas column is present with in the Ntorya gas-condensate accumulation.

Ntorya-2 also encountered traces of oil in the gross reservoir interval. Aminex is currently updating the basin model in order to optimise future drilling to maximise the intersection with the reservoir section and to target potentially liquid hydrocarbon bearing reservoirs in future wells, including Ntorya-3. Outside the Ntorya Appraisal Area LR Senergy estimated 3 tcf of gross mean undiscovered GIIP in the Ruvuma PSA and that remains to be further evaluated.

Solo owns a 25% non-operating interest in the Ntorya Appraisal Area, the Ruvuma PSA, and the Ntorya-1 and -2 wells, which are operated by Aminex.

Qualified Person's Statement:

The information contained in this announcement has been reviewed and approved by Neil Ritson, Chairman and Director for Solo Oil plc, who has over 38 years of relevant experience in the oil industry. Mr. Ritson is a member of the Society of Petroleum Engineers (SPE), an Active Member of the American Association of Petroleum Geologists (AAPG) and is a Fellow of the Geological Society of London (BGS).

All estimates of resources included in this statement comply with the 2007 Petroleum Resources Management System (PRMS) prepared by the Oil and Gas Reserves Committee of the Society of Petroleum Engineers (SPE).

For further information:

 
 Solo Oil plc 
  Neil Ritson/Fergus 
  Jenkins                          [phone] 
 
 Beaumont Cornish 
  Nominated Adviser and 
  Joint Broker 
  Roland Cornish                  [phone] 
 
   Shore Capital 
   Joint Broker 
   Jerry Keen/Edward Mansfield 
 
   Beaufort Securities 
   Joint Broker 
   Jon Belliss 
 
   Buchanan 
   Investor and Public             [phone] 
   Relations                        [phone] 
   Ben Romney/Chris Judd            [phone] 
 

Glossary :

 
 2C                     denotes the mid estimate scenario 
                         of contingent resources 
---------------------  ----------------------------------------- 
 3C                     denotes the high estimate scenario 
                         of contingent resources 
---------------------  ----------------------------------------- 
 appraisal              the collection of additional 
                         data, usually in the form of 
                         additional wells, on an existing 
                         discovery prior to sanctioning 
                         a development plan 
---------------------  ----------------------------------------- 
 boepd                  barrel of oil equivalent per 
                         day 
---------------------  ----------------------------------------- 
 choke                  a device used to create a controlled 
                         pressure drop and allow some 
                         expansion of the gas and to restrict 
                         flow 
---------------------  ----------------------------------------- 
 condensate             gas condensates are liquids that 
                         can condense from gas when the 
                         temperature and pressure drop 
                         sufficiently low, typically condensates 
                         exhibit gravities of > 45 degree 
                         API 
---------------------  ----------------------------------------- 
 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 
---------------------  ----------------------------------------- 
 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 
                         hydrocarbons 
---------------------  ----------------------------------------- 
 dry gas                hydrocarbon gas produced with 
                         no appreciable quantity of formation 
                         water 
---------------------  ----------------------------------------- 
 flow or production     a flow test or well test involves 
  test                   testing a well by flowing fluids 
                         to surface, typically through 
                         a test separator. Key measured 
                         parameters are water, oil and 
                         gas flow rates, downhole pressure 
                         and surface pressure. The overall 
                         objective is to identify the 
                         well's capacity to produce hydrocarbons 
                         at a commercial flow rate 
---------------------  ----------------------------------------- 
 GIIP                   gas initial in-place 
---------------------  ----------------------------------------- 
 in-place               the volume of hydrocarbons, oil 
                         or gas, estimated to be in place 
                         within the reservoir converted 
                         to standard temperature and pressure 
---------------------  ----------------------------------------- 
 mmscfd                 million standard cubic feet of 
                         gas per day 
---------------------  ----------------------------------------- 
 pay or net 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 
---------------------  ----------------------------------------- 
 Pmean                  the mean value in a calculated 
                         probability distribution 
---------------------  ----------------------------------------- 
 PSA                    petroleum sharing agreement 
---------------------  ----------------------------------------- 
 reservoir              a subsurface rock formation containing 
                         an individual natural accumulation 
                         of moveable petroleum 
---------------------  ----------------------------------------- 
 sandstone              a clastic sedimentary rock whose 
                         grains are predominantly sand-sized. 

                         The term is commonly used to 
                         describe consolidated sand or 
                         a rock made of predominantly 
                         quartz sand 
---------------------  ----------------------------------------- 
 seismic                the use of sound waves generated 
                         by a controlled source to ascertain 
                         the nature of the subsurface 
                         structure, lithology and fluid 
                         content 
---------------------  ----------------------------------------- 
 tcf                    trillion cubic feet 
---------------------  ----------------------------------------- 
 wireline or electric   tools used within the wellbore 
  logs                   to measure the rock and fluid 
                         properties of the surrounding 
                         formations 
---------------------  ----------------------------------------- 
 

Appendix:

Table 1: Gas in place (GIIP) data, Ntorya Appraisal Area, billion cubic feet (bcf)

 
                             Gross             Net to Solo 
-------------------  --------------------  ------------------ 
                      P90   Pmean    P10    P90   Pmean   P10 
-------------------  ----  ------  ------  ----  ------  ---- 
       Total 
  Ntorya Appraisal 
        Area          62     466    1,130   16     117    283 
-------------------  ----  ------  ------  ----  ------  ---- 
 

Source: Aminex, April 2017

Table 2: Contingent Resources Data, Ntorya Appraisal Area, billion cubic feet (bcf)

 
                                            Gross                                         Net to Solo 
-------------------  --------------------------------------------------  --------------------------------------------- 
                      Low Estimate (1C)   Best Estimate   High Estimate   Low Estimate   Best Estimate   High Estimate 
                                               (2C)            (3C)           (1C)            (2C)            (3C) 
-------------------  ------------------  --------------  --------------  -------------  --------------  -------------- 
       Total 
  Ntorya Appraisal 
        Area                 39                186             766             10             47              192 
-------------------  ------------------  --------------  --------------  -------------  --------------  -------------- 
 

Source: Solo Oil plc, April 2017

This information is provided by RNS

The company news service from the London Stock Exchange

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April 24, 2017 02:00 ET (06:00 GMT)