Disposal of interest in PEDL331 Licence

RNS Number : 2220K

Solo Oil Plc

12 December 2018

 

12 December 2018

Solo Oil plc

("Solo Oil" or "The Company") 

Disposal of interest in PEDL331 Licence

Solo Oil (AIM: SOLO), a natural resources investment company focused on acquiring and developing a diverse global non-operated portfolio of strategic oil and gas assets, today announces that the Company has agreed to enter into a conditional sale and purchase agreement ("SPA") to dispose of its entire 30 per cent. interest in PEDL331 on the Isle of Wight ("IOW") to UK Oil and Gas plc ("UKOG") for a total consideration of £350,000. 

Transaction Summary

UKOG has agreed to acquire Solo's 30 per cent. interest in IOW for a total consideration of £350,000. With an effective date of 11 December 2018, the total consideration will be satisfied through the issue of 17,989,326 new ordinary shares in UKOG ("Consideration Shares") and cash of £90,450. The Consideration Shares are calculated based on the 5-day volume weighted average price to 10 December 2018 of 1.4428 pence. 

Based on the £350,000 consideration, Solo has made an investment return of 2.25 times its historical investment in IOW.

Completion of the disposal, which will be announced in due course, is conditional upon the usual Oil and Gas Authority consent.

Managing Director, Dan Maling, commented:

"This transaction is fully in line with our stated strategy and provides further evidence of our ability to monetise assets within our portfolio and make strong returns on our investments. This asset was not core to our future strategy and this disposal provides a point of monetisation whilst also reducing the burden of future project related cash calls during the ongoing planning phase.  The transaction further strengthens our balance sheet ensuring we are well funded for commitments on the core projects within our portfolio."

For further information:

Solo Oil plc Dan Maling	[phone]
Strand Hanson (Nominated Adviser) James Spinney, Ritchie Balmer, Frederick Twist	[phone]
Shore Capital (Broker) Jerry Keen Buchanan (PR) Ben Romney / Chris Judd / Henry Wilson	[phone] [phone]

Notes to editors

In early 2015, Solo together with UK Oil and Gas Investments plc (UKOG) and Angus Energy Limited (who subsequently sold their interest to Doriemus plc (Doriemus)) applied in the UK 14th Landward Licensing Round for a 200 square kilometre licence onshore in the Isle of Wight. The partnership was subsequently awarded the area as PEDL 331 by the UK Oil and Gas Authority (OGA) in December 2015.

It is believed that PEDL 331 contains an undeveloped oil discovery at Arreton. Based on work by UKOG and Nutech, and confirmed independently by Solo and Xodus Group Limited, Arreton-2, originally drilled by British Gas in the 1970's, is now considered to be an oil discovery of the Arreton Main Field. Arreton-2 was never tested, however, modern electric log analysis reveals oil pay in conventional reservoir targets. When taken together with adjacent oil prospects Xodus has calculated a most likely gross oil in place estimate of 219 million barrels (mmbbls) in conventional reservoirs within the Purbeck, Portland and Inferior Oolite limestone. Arreton Main is considered by Xodus to contain most likely contingent resource net to Solo's interest in PEDL 331 of approximately 5 mmbbls.

UKOG, as operator of PEDL 331, has commenced discussions with the local planning authorities and land owners, and expects to seek regulatory consents to appraise the Arreton Main oil discovery in the coming years. The first exploration period is 5 years.

 

END

 

 

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