Solo Oil confident despite Aminex troubles at Kiliwani

Solo Oil noted on Monday today that Aminex - the operator of the Kiliwani North Development Licence in Tanzania - reported that production from the Kiliwani North-1 well has been temporarily reduced to gas rates of below 1 million cubic feet per day.

The AIM-traded company said that KN-1, which has recovered in excess of 6 billion cubic feet to date, was now thought to be draining only a single compartment within the greater Kiliwani North structure and was exhibiting slow recharge across faults or via restricted pathways within the structure.

“Aminex will use this period to collect additional data and is evaluating a number of options to maximise future gas recovery and increase production rates from the Kiliwani North resources,” Solo Oil said in its statement.

“Options currently under evaluation include installation of temporary wellhead compression and also maximising the recovery of KN-1 gas resources through step-out prospects on the KNDL through a review of existing seismic data.”

Based on available information, Solo said it did not currently believe that there would be a material impact on the 28 bcf of gross resources independently estimated for KN-1.

It holds a 7.55% interest in the KN-1 well and the KNDL.

KN-1 gas sales receivables were continuing to be settled on a monthly basis, and due to the existing time-lag associated with past payments, that shut-in would have no material impact on forecast cash flow in 2017.

Elsewhere in Tanzania in the Ruvuma PSA, Solo said it was preparing for the monetisation of the gross estimated gas-in-place 1.34 trillion cubic foot Ntorya discovery, for which the application for a development licence had already been made to the Tanzanian authorities.

Solo holds a 25% interest in the Ntorya gas condensate discovery and the wider Ruvuma PSA.