29th Apr 2015 08:23
LONDON (Alliance News) - Solo Oil PLC Wednesday said it is pursuing opportunities in Nigeria after acquiring a stake in Burj Petroleum Africa Ltd.
Solo Oil said it has acquired a 15.9% stake in Burj Petroleum in exchange for Solo's equity stake in Pan Minerals Oil and Gas AG. Solo will acquire a further 5% holding in Burj Petroleum by paying USD200,000 in cash and by issuing 39.8 million new shares at 0.51 pence per share. Once the deal is completed, Solo will hold a total 20.9% stake in Burj Petroleum.
The holding cost of Solo's shares in Pan Minerals is currently equal to the acquisition cost of those shares of approximately GBP800,000. Following the transaction to convert those shares to a holding in Burj Africa and the acquisition of additional Burj Africa shares, the total holding value in Solo's accounts will be approximately GBP1.1 million, it said.
Solo had held a 19.9% stake in Pan Minerals and Oil, a special-purpose-vehicle company focused on acquiring interest in onshore oil fields in West Africa.
Burj Petroleum was created with the purpose of participating in the current marginal field licensing round in Nigeria and, together with its partners, Global Oil and Gas and Truvent Consulting, has made application for two marginal fields in the current licensing round.
Solo said it has the right to convert its equity in Burj Petroleum into a participating interest in a joint venture with Global Oil in Nigeria. The company said the terms will be determined based on an independent third party valuation at a later date.
In addition, Solo said Burj Africa has partnered with Phil Mulacek, the founder InterOil Corp, which has been credited with "one of the most significant natural gas discoveries in Asia in the past 20 years", it said in a statement.
The two marginal fields that Burj Petroleum have applied for contain a total of 10 wells that were previously drilled by an "international major" and believed to contain around 59.3 million barrels of proven and possible recoverable oil, of which 13.5 million barrels would be net to Burj Petroleum.
"Solo will participate in the technical decision process with Burj Africa and Global, being represented on all relevant committees. Global will be the designated operator of any operations carried out by Burj Africa," said Solo.
Solo shares were trading flat at 0.560 pence per share Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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