Tanzania: Solo Oil and Aminex reach Agreement to Farm out Ruvuma Petroleum Sharing Agreement to Bowleven

Posted on : Friday , 20th November 2015

Solo Oil is pleased to announce that it has reached agreement with Aminex plc to farmout a 12.5% net working interest in the Ruvuma Petroleum Sharing Agreement in Tanzania to Aminex in a back-to back agreement which will see Bowleven plc, an AIM listed oil and gas company, join the Ruvuma PSA joint venture with a 50% net working interest.

Solo will receive from Aminex a total consideration, in the form of a carried work program contribution and production bonus payments, of US$3.625 million comprising:

Net carry of US$2.5 million on Solo’s Ruvuma PSA future work activity
A cash bonus of US$0.125 million on the completion of the Ntorya-1 well for production
A further bonus of US$1 million, to be settled in cash or shares, payable on achieving commercial production from the Ruvuma PSA
Solo and Aminex entered a Vender Collaboration Agreement for their Ruvuma PSA interests in October 2012. As a result of a wider transaction between Aminex and Bowleven, Solo has agreed to participate in the farm-out of 50% of its interests in the Ruvuma PSA and receive a pro rata share of the agreed farmout proceeds in the form of a work programme carry of US$2.5 million and various production bonuses associated with the existing Ntorya gas condensate discovery.

A formal Sale and Purchase Agreement is being prepared and completion of the transaction will be subject to the completion of the transaction announced today between Aminex and Bowleven including the receipt of the necessary regulatory approvals. The effective economic date of the transaction will be 1 January 2016. The farm-out of an interest in the Ruvuma PSA is also subject to formal approval from the Tanzanian authorities. Aminex will remain operator of the Ruvuma PSA.

The completion of the proposed transactions will enable the acceleration of operations in the Ruvuma PSA where the carry under the farm-out is expected to enable the drilling two wells at Ntorya.