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COMPANY PROFILEsolo oil

Solo oil (solo:AiM)

ViTAl STATS

WebSiTe: www.solooil.co.uk

SeCToR: OIL & GAS

SHARe PRiCe: 0.57p

MARkeT CAP: £28.6 mILLIOn

solo chasing multiple projects

Solo Oil was set up as an investment company with the target of acquiring an active portfolio of oil

and gas assets across a range of maturities and geography. Its exposure to deal flow allows it to select good assets with competent operators in which to invest. Exposure to assets at different points in the value chain from exploration to production, in different geographic areas and with different operators, is intended to systematically reduce the risk in the portfolio whilst maintaining active newsflow. The idea being that through using the skills of the existing operators Solo gains their experience whilst itself maintaining a very low overhead cost.

DeAl MAkingSolo continues to generate newsflow especially since it increased the number of projects in the key Tanzanian element of its portfolio. In the onshore Ruvuma Basin in Tanzania, where Solo holds a 25% interest, recent seismic data has shown that the discoveries made at Ntorya-1 and the nearby Likonde-1 well are probably connected geologically and the resource base is higher than initially thought. With over 2 trillion cubic feet (tcf) of gross gas potentially in place Solo and the operators, Aminex, plan an appraisal well in 2015 as the next step in the commercialisation process.

More recently Solo has acquired a 6.5% share in the Aminex-operated Kiliwani North Development Licence and has the option to double this position when

the agreement is executed for the sale of the gas from the Kiliwani North-1 well. This is expected to occur in the first half of 2015, and then both gas and revenues will start to flow from Solo’s investments in Tanzania.

Kiliwani North lies just two kilometres from the Songo Songo gas plant which is already hooked up to the Chinese-built pipeline to Dar es Salaam. The tie-in from KN-1 to Songo Songo has been constructed and will shortly be commissioned.

Ntorya also only lies a few kilometres from the 36-inch pipeline between Mtwara and the Tanzanian capital Dar es Salaam and this ability to export gas to a rapidly-growing domestic market gives the Solo discoveries added impetus. The infrastructure to take gas to the market gives this a very immediate and significant potential.

The same is true of the oil it has discovered much closer to home in the Weald basin south of London. Solo has a 10% interest in Horse Hill Developments Limited (HHDL), a special purpose company which drilled a conventional oil and gas prospect in Surrey just north of Gatwick airport last year and where oil was found in the Portland Sandstones. This well, Horse Hill-1, is expected to be flow tested in 2015 and if the results are similar to a number of other nearby Portland Sandstone oil fields then production of oil could be planned to start in 2016. In place gross oil volumes of up to 12 million barrels have been estimated in the discovery.

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COMPANY PROFILEsolo oil

are plans to explore and develop additional prospects in the next few years. The Horse Hill well also revealed more mature Kimmeridge oil source rocks than had previously been expected and there is evidence for thick limestone reservoirs in the Kimmeridge that could yield additional conventional oil production. These limestones are being further investigated with the assistance of Nutech, one of the world’s leading companies in log evaluation.

Based on the early success of the Horse Hill project Solo has jointly applied for an exploration licence in the ongoing UK 14th landward licence round. The 200 square kilometre licence, which covers a portion of onshore Isle of Wight, has been made in partnership with a rapidly growing new start-up company, UK Oil and Gas Investments, who also hold the rights to licences offshore south of the Isle of Wight. Announcement of awards in the 14th round are expected in 2015, possibly following the UK general election in May.

DiVeRSiTySolo has created a diverse portfolio, with low costs, using the experience of a small and experienced management team. So far Solo has selected and invested in six opportunities. The medium term plan is to expand that to more than 10. Since its creation Solo has actively participated in the discovery of gas in the Ruvuma Basin and now holds rights to gas at Kiliwani North that will be on production and generating revenues in 2015.

Additional options the company

period ahead with the expected completion of the hook-up of the KN-1 well and the signature of the gas sales agreement with the Tanzanian authorities. Following that Solo expects to take up the option to double its stake in the project. Revenues from the KNDL are expected to start in the second quarter. In the UK we hope to test the Horse Hill-1 oil well and to get news of our 14th round application. Further news of an initial investment in assets in West Africa through the seed investment in Pan Minerals is also eyed in 2015. The drilling of an appraisal well at Ntorya is expected to cap off a busy year. And there is always the possibility of further projects joining the portfolio at any time.

holds in West Africa and a small asset in Canada have yet to deliver acceptable results and these are maintained under close scrutiny.

Solo is currently financed through the raising of shareholder equity, much as a managed fund would be, except that Solo is a listed stock and there is immediate liquidity available to its members. Solo is one of the most actively traded stocks on the AIM market and this provides its shareholders with opportunities to benefit from the newsflow. In the future Solo may look to reinvest from cash flow in successful assets or pay a dividend to its shareholders, but firstly a larger sustainable portfolio needs to be created.

In 2015 the company has a busy