Investment in Argentina

RNS Number : 1209T

Solo Oil Plc

01 December 2011

 



Immediate Release, 7am

1 December 2011

Solo Oil plc

('Solo' or 'the Company')

Investment in Argentina

Solo Oil plc is pleased to announce that it has entered into a binding Heads of Agreement with Obtala Resources plc ("Obtala") to acquire, subject to title and legal due diligence, Ilakon Limited ("Ilakon") a wholly owned Obtala subsidiary which holds the rights to the Mina El Carmen block ("the Block") in Argentina ("Investment").

Highlights:

·     A binding heads of agreement has been signed with Obtala in an all shares transaction valuing the Block at US$750,000

·     Solo will acquire Ilakon and its Argentinean subsidiary, Spinell Sociedad Anomima ,which holds a 100% interest of the 25 claims which make up the Block

·     The Block covers 4,940 acres on the northern side of the Golfo San Jorge basin close to numerous producing fields

·     The Block is lightly explored and has received only limited exploration work since the 1940's

·     Oil and gas shows have been recorded from wells on the Block and the shallow Glauconitico gas bearing reservoir , which produces in the nearby Salamancia gas field, 7 kilometres to the south, is considered proven

Neil Ritson, Solo Executive Director, commented:

"The Mina El Carmen Block presents an exciting opportunity to acquire an early phase exploration project in a proven basin setting. This investment is in line with Solo's investing policy of holding a diverse portfolio of oil and gas interests at different stages of maturity."

About the Properties

The Block lies within the proven Golfo  San Jorges basin in northern Argentina where oil and gas exploration started over 100 years ago and to date over 3 billion barrels of oil has been produced.  About a third of the current Argentine production comes from the San Jorges Basin.  Hydrocarbons lie typically in Cretaceous age sediments within fault bounded structures; although stratigraphic traps are also present.

The Mina El Carmen block itself lies on the northern margins of the basin close to the coast in dry Patagonian mesa-type terrain rising from 200 metres above sea-level in the south to over 600 metres in the north.  Access to the block is simple with good roads linking the Block with the major oil and gas centre and port at Comodoro Rivadavia, 30 kilometres to the south on the Atlantic coast.

A total of 12 wells were drilling in the Block prior to 1945. Four wells tested gas in the Palaeocene age Glauconitico Formation and one well, CA-1, located in the centre of the Block, reported oil and gas shows in the San Diego Member of the Upper Cretaceous El Trebol Formation.   There is only limited seismic coverage on the Block and many of the older wells were drilled without any viable sub-surface information and therefore can't be considered valid tests of the prospectivity.

Initial work will concentrate on consolidating all existing regional and local data prior to developing a more detailed exploration work program.  Solo will at an appropriate time seek a partner.

Terms of the Investment

·              The Investment is subject inter alia to the completion of title and legal due diligence, which Solo aims to have completed in order to achieve completion by 30 January 2012

·              At completion, Solo will issue to Obtala 81,128,205 fully paid up shares in Solo based on a purchase price of US$750,000 and a mid-market share price of 0.6p as at 23 November 2011

A further announcement will be made in due course to confirm completion of the Investment.

Competent Person's Statement:

The information contained in this announcement has been reviewed and approved by Neil Ritson, Executive Director for Solo Oil Plc who has 35 years of relevant experience in the oil industry.  Mr. Ritson is a member of the Society of Petroleum Engineers, an Active Member of the American Association of Petroleum Geologists and is a Fellow of the Geological Society of London.

For further information:

Solo Oil plc David Lenigas Neil Ritson	[phone]
Beaumont Cornish Limited Nominated Adviser and Joint Broker Roland Cornish	[phone]
Shore Capital Joint Broker Pascal Keane Jerry Keen (Corporate Broker)	[phone]
Pelham Bell Pottinger Financial Public Relations Mark Antelme Henry Lerwill	[phone]

 

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