Solo has announced it has now signed the Asset Purchase Agreement with Aminex plc for the first 6.5% interest in the Kiliwani North Development Licence (KNDL) at a total consideration of US$3,500,000.
Further, Solo and Aminex have agreed to amend the terms of the original heads of agreement to allow Solo the option to purchase the additional 6.5% interest, on the same terms as the first 6.5% interest in the KNDL, during a period of 30 days after the Gas Sales Agreement (GSA) which has been approved by the Tanzanian Authorities.
The KNDL contains the Kiliwani North 1 well which is expected to produce at approximately 20 million feet per day in early 2015 with verified resources therein estimated to be 45 billion cubic feet of gas-in-place.
Construction of a 2 kilometre pipeline from KN1 wellhead to the new Songo Songo processing plant, at zero cost to the Company, is underway and expected to be completed shortly with the pressure testing of the pipeline expected to commence during first quarter 2015.
The only conditions precedent remaining are the formal approval by the Tanzanian Authorities and the formal signing of the Asset Assignment Agreement by all partners; which the companies expect to receive shortly.
The key terms of the acquisition are set out below:
- The Initial Acquisition will consist of a cash payment of $3.5 million for 10% of Ndovu’s 65% interest in KNDL, representing a 6.5% interest in the entire KNDL; and
- The Second Acquisition consists of an option for Solo to acquire a further 10% of Ndovu’s 65% interest in KNDL (a 6.5% interest in the entire KNDL) on the same terms as the Initial Acquisition within 30 days of the signing of the GSA.
Aminex and Solo are already partners in the Ruvuma Production Sharing contract in Tanzania, with respectively 75% and 25% interests, where gas was discovered in 2012 at Ntorya-1. Ndovu is the operator of both the Ruvuma Production Sharing Agreement and the KNDL.