Solo Oil has acquired a 10 per cent interest in Helium One Limited and announced plans to progress further with the Ruvuma gas field, increasing its presence in Tanzania
Helium One is Tanzania’s pure play helium exporter, and the helium is expected to become a bigger player in the African oil and gas industry in coming years. As well as the newly acquired 10 per cent interest, Solo has an additional call option to acquire a further 10 per cent interest within 90 days.
This second investment is expected to close on or before next month with a long stop date of 31 July 2017 in case of any delays in regulatory approval in Tanzania. It has been reduced in price from £4m (split equally between cash and shares) to £3m in cash. Once this has been issued, Solo will then have the right to subscribe for a quarter of a share in Helium One for every one share subscribed for under the call option.
This can be exercised until 31 December 2017 with a price of US$0.40 per share.
It was announced earlier this month that Helium One completed the acquisition of an airborne gravity and magnetics survey and has approved more soil and groundwater sampling surveys, following the successful results of the first phase of sampling work. It is expected that drilling will commence in the Rukwa project area in 2018, where it is estimated that approximately 99bcf of helium is present.
Current global demand for helium is at around 6bcf so this makes Rukwa an important strategic project for the future of the sector. New helium supplies coming onstream are limited and the US Federal helium reserve will be shut down in 2021, so this positions Tanzania as a potential major player in the world helium market.
As well as positive news for the Tanzanian helium sector, Solo is pursuing a 25-year development license for gas in the onshore Ruvuma petroleum sharing contract (PSC) from the country’s authorities.
This follows the drilling and successful testing of the Ntorya-2 appraisal well as part of the Ruvuma PSC. According to the appraisal results, there is most likely discovered gross gas of 466bcf in place. As well as seeking out the license, Solo is looking for a partner for its future involvement in the development. Solo owns a 25 per cent non-operating interest in the Ruvuma PSC and the Ntorya-1 and Ntorya-2 wels, which are operated by Aminex.