Following on my research note on Solo yesterday, found at (https://riskybearinvesting.com/2016/10/17/research-note-solo-oil-aim-solo/), Solo has updated the market again in announcing site preparations for the Ntorya-2 appraisal well have concluded and Caroil#2 rig is being transported from the Ntorya-1 wellsite, approximately 1.5km away.
Solo has also advised that ancillary services for the drill have been commissioned, and the company estimates that the Ntorya-2 appraisal well is likely to spud in December 2016.
Neil Ritson, Solo’s Chairman, commented “Advancing the Ntorya appraisal and its commercialisation is now a key objective for Solo and we are pleased that rig mobilisation is now underway. The discovery of gas in high quality Cretaceous sandstone reservoirs in the onshore portion of the Ruvuma Basin represents very significant value and we look forward to confirmation of the spud date in due course.”
Solo holds a 25% interest in The Ruvuma PSA, and the remaining 75% is owned and operated by Solo’s Tanzanian partner, Aminex plc. The project has 70mcf of best guess contingent resources, with scope for upto 1.5 trillion cubic feet in the larger Ntorya area. This could well be the crown jewel in Solo’s current portfolio – depending on how Solo is able to take it forward.
What is particularly appealing about the Ruvuma project is that Aminex has a track record of delivering on another project project with Solo – being the Kiliwani Gas Field. This takes away some of the doubt surrounding a new project such as this. The second appraisal well is fully funded through Solo’s latest fundraising exercise, so the market is probably safe from further fundraising until early 2017 at the earliest. Ideally by then Solo will establish new forms of fund raising to take the project forward. I am of the belief that when Solo achieves this, and satisfies the market the further dilution isn’t on the cards, Solo may well see a sustained share price rise.
I will be keeping an eye on developments at Solo on all three of its main projects, as it could be destined for greater things for the patient.