Update Re Investment

RNS Number : 1678U

Solo Oil Plc

16 December 2011

 

For Immediate Release

16 December 2011

SOLO OIL PLC

("Solo" or the "Company")

Operational Update, Canada

Solo Oil plc today announces an operational update from its Joint Venture partner Reef Resources Limited ("Reef") on operations at the Ausable Field and surrounding area in SW Ontario.

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

·     Pipeline material and other field optimization components for bringing Ausable #2, #4 and #5 
wells on production are arriving on site and will be initially installed in Ausable # 5 and then rolled out to Ausable #2 and Ausable #4.  Production from the upgraded pumping system will be commissioned as soon as they are connected to the Ausable facility.

·     The completion program for the upper Guelph and A2 gas zones in the Airport South#1 well  is 
currently being drafted with expected recompletion in early 2012.  Natural gas from Airport South #1 well will be used to re-pressurize the Ausable reef to further increase oil production.  Natural gas liquids produced from the Airport well plus the recycled gas from the producing Ausable wells will be processed at the Ausable facility and sold as condensate.

·     Pipe and separation equipment required for tie-in of the suspended Airport South #1 gas well has been purchased and is en route to Ontario.  Pipelining will begin once all components arrive and weather condition permit.

·     The well licence for Airport North #1 well was received from the Ontario Ministry of Natural Resources.  Our seismic data indicates the Airport North reef is potentially a gas and liquids prone reef, similar to Airport South.  Subject to results, natural gas production will be tied into the Ausable process facility for re-pressurization of the Ausable reef to increase oil and natural gas liquids production."

The success of the Ausable Field development ultimately depends on the availability of gas to re-pressurize and then maintain pressure in the Ausable reef so that oil and condensate can be withdrawn above the bubble point.  The arrival and commissioning of the optimised pumps for all production wells is therefore coupled with additional gas supply from the adjacent North and South Airport reefs.  We believe that the combination of these factors will provide a significant increase in field production in 2012.

Reef also announced the closing of their refinancing package with a further CDN$277,189 being raised, bringing the total to CDN$1,965,415.  As previously announced on the 25 November 2011, this funding will trigger Solo's additional investment of CDN1.5 million and the increase in Solo's working interest in the Reef properties to 38.1%.

Neil Ritson, Solo Executive Director commented: "By bringing together the venturi pump system we have been testing at Ausable#1 and the additional gas supply, Reef are able to move the project from proof of concept towards full production. This will occur over the next few months and we anticipate being able to report significantly higher production in 2012.  This marks a turning point in the project and we are delighted to be increasing our interest to 38%."

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 Jerry Keen (Corporate Broker)	[phone]

Pelham Bell Pottinger                                            [phone]

Financial Public Relations

Mark Antelme

Henry Lerwill

 

END

 

 

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