Additional investment

RNS Number : 7603S

Solo Oil Plc

25 November 2011

 

For Immediate Release

25 November 2011

SOLO OIL PLC

("Solo" or the "Company")

Ausable Field, Canada

Solo Oil plc today announces that its Joint Venture partner Reef Resources Limited ("Reef") has secured additional funding through a private placement. This triggers the second tranche of funding from Solo and increases the Company's interest in the Ausable field development to 38.1%. 

Reef has raised gross proceeds of CDN$1.69 million through the issue of shares and warrants in Reef.

Reef's announcement, to the Toronto exchange, states:

"The closing of this tranche of Brokered Private Placement will trigger Solo Oil Plc., an AIM listed company, to acquire an additional 14.3% Working Interest in Reef's Ontario properties for $1.5 million.  Solo Oil Plc currently holds a 23.8% Working Interest.

The funds secured by Reef as a result of the Working Interest sale and Financing will be used to roll out of the successfully tested hydraulic venturi system in all producing wells at the Ausable field to increase production, to drill and complete additional well(s) in the producing Ausable pinnacle reef, tie-in an existing standing gas well in the Airport South reef, complete two additional bypass gas zones  at the Airport well and, if required, acquire additional natural gas for re-injection into the Ausable reef. 

The Company has successfully completed testing of the hydraulic venturi pump design in the Ausable # 1 well.  Flow test results indicate an initial production rate of 63 bopd.  Through the test period the Company obtained flow rates at various wellhead pressures to help model the production impact of gas re-pressurization.  Under the EOR program, reservoir analysis and pressure data acquired to date indicates re-pressurization of the reservoir, in conjunction with the improved pumping system, will have a significant positive impact on overall field production and recovery factors.    Further updates will be released as plans are confirmed and when further wells, including the Ausable #5, are placed on production.

The Company is additionally finalising a new reserves report for the Ausable reef and expects to release the results of that work shortly."

The initial production rate established at Ausable #1 well of 63 bopd is in the expected range (50-70 bopd) announced in early October and confirms the venturi pump systems is achieving the anticipated results.  Once the field is re-pressurised high production rates will be possible.  With the necessary funding now in place for the additional work, Solo will increase its interest in the field to 38.1% and anticipates agreeing a detailed program and budget for 2012 shortly.   The deployment of venturi pumps to wells A#2, A#4 and A#5 will be a priority, along with the completion of the various tie-ins needed to inject gas into the reservoir to build and maintain pressure.

Neil Ritson, Solo Executive Director commented: "We are extremely pleased that Reef has raised the additional funds envisaged under the agreement with Solo announced on 11 July 2011. The programme of well tie-ins and gas injection can now be pursued which will result in a significant increase in production.  Along with our enhanced knowledge of the reservoir, gained through studies conducted during 2011, we remain confident that the field will deliver to our expectations and will be a model for similar developments in the surrounding area."

Competent Person's Statement:  The information contained in this announcement has been reviewed and approved by Neil Ritson, Chief Executive Officer and Director for Solo Oil Plc who has 35 years of relevant experience in the oil industry.  Mr. Ritson is a member of the Society of Petroleum Engineers, an Active Member of the American Association of Petroleum Geologists and is a Fellow of the Geological Society of London.

For further information:

Solo Oil plc David Lenigas Neil Ritson	[phone]
Beaumont Cornish Limited Nominated Adviser and Joint Broker Roland Cornish	[phone]
Shore Capital Joint Broker Pascal Keane Edward Mansfield	[phone]

Pelham Bell Pottinger                                            [phone]

Financial Public Relations

Mark Antelme

Henry Lerwill

Glossary

bopd                     - barrels of oil per day      

EOR                        - enhanced oil recovery                                        

 

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