Anglo African needs funding for Tilapia drilling operations

Anglo African Oil & Gas saw its shares dip on Thursday after confirming that it requires further funding to cover the costs of planned works on its wells in the Republic of Congo.

The AIM-traded oil and gas developer said that further funding would "remove any uncertainty" surrounding the scheduled drilling of the TLP-103 well, as it would keep the drilling campaign in the sole control of the company.

The cost of drilling and testing at the site without the use of contractors stands at $7m plus a contingency of $1m.

However, the terms of the existing licence at the Tilapia field allow for the company to claw back any drilling costs incurred above its pro rata share from future cash flows.

The company claims to have had several offers for funding and will not spud the new well until financing is in place.

David Sefton, executive chairman of Anglo African Oil & Gas, said: "The next round of funding will, critically, remove any uncertainty as to the drilling of TLP-103. This will allow the company to move forward and establish the value of Tilapia, which I know is the key milestone for all investors. The management team understands this, is very well advanced in preparation and planning and remains completely focused on delivering the well as soon as possible."

Aside from the financial issues interfering with operations at the TLP-103 well, works have moved ahead at the other wells at the Tilapia licence.

Following work to disconnect, clean through and reconnect the flowlines to TLP-101, the company has allowed the flow rate at the well to increase after reopening it last Friday, with maximum flow rate projected to be achieved in roughly two weeks.

TLP-102 meanwhile, has seen testing confirm that it is in contact with the reservoir through steadily rising pressure.