Aminex has announced the implementation of a sale and purchase agreement to relinquish 3.825% interest in Kiliwani North Development Licence in Tanzania to Solo Oil at an overall cash consideration of $2.16 million.

Upon complete receipt of the consideration, Solo’s interest will increase from 6.175% to 10% interest in Kiliwani North, while Aminex will maintain a 51.75% operated interest.

According to Aminex, the KN-1 well, which is set to commence production, has been estimated to have contingent resources of gross 28 bcf by LR Senergy. The company anticipates to book reserves from the well by the end of 2016, making it the first reserves for the company in the country.

Gas from the well is to be sold to the Tanzania Petroleum Development Corporation (TPDC) under a fixed gas sales agreement at wellhead for an established price of about $3.07 per Mmscf, to be paid in US dollars.

As a matter of fact, the gas will be processed at the new Songo Songo Island gas plant and be conveyed by pipeline to Dar es Salaam, to be sold into the local Tanzanian market.

“Solo is delighted to increase its exposure to the KNDL project with commencement of production imminent. The project offers a revenue stream that will increase through the commissioning process and into commercial production under the GSA which has a take-or-pay provisions and is paid in US Dollars guaranteed by a consortium of banks. By linking the acquisition of our additional interest to project milestones we have been able to further de-risk the investment,” Neil Ritson (photo), Solo Oil’s Chairman, told Offshore Energy Today.

Anita Fatunji