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Solo Oil expects Tanzanian farm-out will be agreed

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Solo Oil (LON:SOLO) has told investors that it expects a farm-out deal will be concluded for its Tanzanian assets once the government has approved revised contract terms.

Solo shares fell 10% on Monday after an update from joint venture partner Aminex (LON:AEX), which confirmed a delay in the farm out process meant that necessary work programmes would not be completed before a December deadline under the production sharing contract (PSA).

But, in a statement on Tuesday, Solo said that revisions to the PSA have been agreed in principle with the Tanzanian government, and it expects a farm out deal will be done once this agreement has been formally approved.

Solo also said farm-out talks are ongoing with more than five interested parties.

"We at Solo remain of the view that a mutually attractive farm-out can still be concluded,” said executive director Neil Ritson.

“The revised PSA terms, when approved, will allow the necessary additional seismic to be completed before drilling obligations become due and that will significantly increase the chance of further discoveries."

 

Quick facts: Solo Oil PLC

Price: 1.225 GBX

AIM:SOLO
Market: AIM
Market Cap: £7.93 m
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