Solo Oil Plc - Transaction Update and Restoration of Trading
("Solo" or "the Company")
ONE-Dyas Transaction Update,
Strategy Update and Restoration of Trading
Solo (AIM: SOLO), a gas-focused production and development company targeting attractive growth opportunities within the European gas market, announces the following strategy update.
Further to the transaction updates provided to the market on
Whilst Solo has enjoyed broad market support for its planned growth strategy through selective acquisitions within the European gas market, the original economics associated with the Proposed Transaction, as set out in the Company's RNS issued on
· European gas price for calendar year 2020 reaching unprecedented and historical lows having fallen from above
· The target assets being subject to increases in both forecast opex and capex numbers, during the interim period between
· Political uncertainty during the fundraising period, including the
Over the past two months, the Board and management have positively engaged with ONE-Dyas around a variety of deal structures that looked to deliver value for the Company's shareholders in this challenging environment. Unfortunately, despite the best efforts of both Solo and ONE-Dyas to find a mutually acceptable transactional construct and, noting the significant volatility in the European gas price and uncertainty in capital markets, no suitable compromise could be achieved.
In the reasonable opinion of the Board, the Company expects to have sufficient cash resources to meet current firm budgeted commitments within its existing portfolio of assets in
Despite the disappointment of not being able to complete the Proposed Transaction on mutually acceptable terms, the Board remains committed to the Company's broader European gas strategy as previously communicated. The Board and management continue to work with its advisers to identify additional opportunities with producing reserves and future development characteristics that would allow the Company to realise the benefit from undertaking an acquisition during a cyclical price low in the gas market. To that end, the Company is in discussions with several separate vendors in respect of complementary acquisition portfolios. Further updates will be provided if and when appropriate.
The Board is encouraged by the continued positive statements by the operator, Aminex, and its prospective farm-in partner, APT, and the apparent progress being made with the Government of
The Company continues to see a consistent level of unsolicited interest in its Tanzanian natural gas assets. Within the last 18 months, a number of expressions of interest have been received, alongside direct approaches, each of which was explored, but found at the time, not to be considered in the best interest of shareholders.
As a result, the Board has determined that the most appropriate course of action is to run a formal process to explore value realisation options for the assets including, but not limited to, the sale of Solo's interests in the certain, or all, of its Tanzanian assets. In particular, the Board is confident in the inherent value of its 25% interest in the Ruvuma asset and will consider reasonable offers that reflect the quality of the asset and its significant upside potential. A formal dataroom has been established and the Company intends to launch a formal process in the course of the next week 7-10 days. Further updates will be provided as and when appropriate.
Restoration to trading on AIM
The Company's shares were suspended from trading on AIM at
"This package of assets was one of a number targeted by Solo and, whilst this has resulted in a delay to achieving completion of a first transaction in line with our strategic vision, it does not alter our strategy to build the Company around opportunities in the European gas market. We have continued to screen and progress new opportunities in parallel with this process and hope to bring alternative opportunities to new and existing investors in due course.
"The Company has invested time, energy and cost into this process, however the majority of costs were success based and therefore limited our exposure to this no-deal scenario. Our existing portfolio contains material unrealised value which we seek to unlock in the near-term through various initiatives. We will provide an update to shareholders on next steps and near-term objectives in the coming weeks."
For further information:
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+44 (0) 20 7440 0642
+44 (0) 20 7409 3494
Buchanan, Financial PR
+44 (0) 20 7466 5000
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation 596/2014.
This information is provided by RNS, the news service of the
Quick facts: Solo Oil PLC
Market Cap: £8.07 m
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