11th Feb 2016 08:36
LONDON (Alliance News) - Solo Oil PLC Thursday increased its stake in the Kiliwani North development licence in Tanzania after exercising an option agreed with the operator of the project, fellow London-listed Aminex PLC.
Solo Oil already held a 6.175% interest in the licence and had an option, which it has now exercised, to increase its stake up to 10%.
Originally, the option was set to allow Solo Oil to increase its stake to 12.5%, but the option was amended after Tanzania Petroleum Development Corp exercised its own 5% back-in right in October.
In return for 3.825% stake acquired by Solo Oil Thursday, the company has paid Aminex USD2.2 million. The deal doesn't need further approval as Aminex secured permission from authorities in early 2015 to sell up to a 13% stake in the project to Solo Oil, the pair said.
To put that into perspective, when Solo Oil entered into the project, it initially held a 6.5% stake in the project for USD3.5 million. That stake fell to 6.175% due to additional partners farming in to the licence.
Solo Oil will pay USD500,000 of the USD2.2 million consideration immediately to Aminex, and the remaining balance does not need to be paid until April 30, 2016.
Following the deal, Aminex will remain as operator with a 51.75% stake alongside Solo Oil with 10%. The other partners are RAK Gas LLC with a 23.75% stake, Bounty Oil & Gas NL with a 9.05% stake and the Tanzania Petroleum Development Corp with the remaining 5%.
Tanzania Petroleum Development Corp farmed-in to the project before signing a gas sales agreement with the project back in early January, which will see Tanzania Petroleum Development purchase gas from the Kiliwani North project.
That agreement is still being finalised, and all the gas sold under the deal will be at a price of around USD3.07 per million standard cubic feet, and will ultimately be transported by pipe to Dar es Salaam, where it will be sold into the local Tanzanian market.
Solo Oil shares were up 5.3% to 0.300 pence per share on Thursday morning whilst Aminex shares were down 1.7% to 1.30p.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
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