Solo Oil has announced that it has agreed to acquire a 10% interest in Helium One Limited for a total consideration of £2.55 million and has also been granted a 90-day call option to increase its investment in the company by a further 10%, for an additional investment of £4 million, which would increase its stake to 20%.
The initial investment by Solo Oil is divided into £1.2 million (gross) raised by means of a Company arranged subscription with institutional and private investors and £1.35 million through issuing new Ordinary Shares.
The call option to increase interest in Helium One to 20% by a further investment of £4 million by way of £2 million in cash and £2 million through issuing new Ordinary Shares.
The Helium One’s Rukwa Project in Tanzania has independently estimated by Netherland, Sewell and Associates Inc. (NSAI) to contain unrisked most likely prospective recoverable helium volumes close to 100 billion cubic feet.
The investment comes as the global helium market is anticipated to see a sharp drop in supply in the next five years as the US Strategic Reserve ceases sales, and with helium’s increasing use in modern life, such as MRI scanners, to lifting and electronic applications.
“Solo has successfully invested in bringing several gas projects to market in Tanzania which are now reaching maturity from an investment viewpoint. Given the related pricing of petroleum gas and helium, which is globally in short supply, Solo has for some time been investigating opportunities in the helium sector,” says Solo’s Chairman Neil Ritson.
Solo adds it has identified Helium One’s world-class assets in Tanzania as a compelling and complementary investment for Solo’s portfolio of oil and gas investments.
“Helium One’s portfolio of prospective helium projects in Tanzania provide Solo with a unique early stage investment into a potentially world-scale helium resource. The Company believes that Rukwa, together with Helium One’s additional project areas at Eyasi and Balangida, represent an attractive strategic investment, especially given the helium market’s weak supply dynamics and continued demand growth.