Solo Oil and Aminex receive approval for Kiliwani North sale

Oil explorers and producers Aminex and Solo Oil saw share prices rise after the Tanzanian government accepted a proposed deal for Solo to purchase up to a 13% interest in Aminex’s Tanzanian Kiliwani North development licence for $7m.

Solo plans to purchase a total 13% stake in the licence from Aminex’s subsidiary, Ndovu Resources, in accordance with an agreement signed last month.

For now, Aminex and Solo will progress with an initial 6.5% interest in the licence for $3.5m. Solo said the option to buy the further 6.5% stake has been extended until 30 January, as it took longer than expected for the Tanzanian Minister of Energy & Minerals to accept the agreement.

Solo's chairman Neil Ritson said: "The final step in the process of receiving approvals to our acquisition of an interest in the soon to be producing Kiliwani North development has now been received and we look forward to signature of the gas sales agreement and to the start-up of the production in 2015."

The Kiliwani North gas field is expected to start production at approximately 20m cubic feet a day in early 2015.

Assuming Solo elects to take up its full 13% entitlement, the licence joint venture partners will be Aminex subsidiary and well operator Ndovu Resources with 52%, RAK Gas with 25%, Bounty Oil with 10% and Solo with 13%.

Aminex and Solo are already partners in the Ruvuma production sharing agreement in Tanzania, with 75% and 25% interests, respectively.

As of 9:08 on Wednesday, Solo’s share price jumped 14.58% to 0.378p per share, while shares in Aminex rose 4.18% to 1.75p per share.