Ntorya Appraisal Area Major Resource Upgrade

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 Relations Ben Romney/Chris Judd	[phone] [phone] [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 test	a flow test or well test involves 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 logs	tools used within the wellbore 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 (2C)	High Estimate (3C)	Low Estimate (1C)	Best Estimate (2C)	High Estimate (3C)
Total Ntorya Appraisal Area	39	186	766	10	47	192

Source: Solo Oil plc, April 2017

 

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