ANOTHER British oil firm, Solo Oil, will spend usd 10.7 million to fund a buyout agreed upon with Aminex for a 12.6 per cent interest in the Likonde-1 oil well in Southern Tanzania.

Reports  emerging out of Dar ERs Salaam says the transaction will see Tullow Oil owning 50 per cent of Likonde-1, Aminex,37.8 per cent and solo Oil 12.5 per cent. Likonde-1 is the first well scheduled to be drilled under the Ruvuma Production Sharing Agreement in Southern, Tanzania, with pudding likely in about two months.

Under the terms of the farm-out Agreement, Solo Oil will reimburse Aminex for 12.5 per cent of pro-drilling costs, amounting to USD 1.25 million, and pay 18.75 per cent of the drilling cost of Likonde-1 {USD3.4 million}.

The chairman of Solo Oil David Lenigas, said the farm-out agreement is subject to formal approval from the Government of Tanzania, and the passing of the relevant resolutions at the company’s general meeting..
“If solo exercises this right, it will also become a full party to the Ruvuma joint operating agreement, “said Mr Lenigas.

According to Mr Lenigas, participation in the agreement will cost Solo Oil an estimated USD4.6 million.

The balance will be used to strengthen the company’s balance sheet and for general working capital.

“This exciting farm-in opportunity with Aminex and Tullow is the first oil and gas deal undertaken by the {Solo Oil} company since it changed its investment strategy in July this year.

Likonde-1 is the first well being drilled in one of the last unexplored major onshore basins in Africa,”said Mr.Lenigas.

The Ruvuma PSA covers approximately 12,000 square kilometers, of which 80 per cent is onshore. Within PSA are specific, adjoining structure associated with a strike slip fault, is thought to have the potential of producing 500 million barrels of oil.

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