corporate update oil capital conference, london · corporate update oil capital conference, ... its...

Corporate UpdateOil Capital Conference, London

1 February 2018

Disclaimer

Corporate Presentation 2

This presentation may contain forward-looking statements. Forward-looking statements refer to events and conditions which are not historical facts and include, for example, statement concerning our objectives, goals, strategies, future events, futureperformance, capital expenditures, financing needs and business trends.

These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. You should not place undue reliance on these forward-looking statements. Any forward-looking statements are based upon information available to us on the date of this presentation. Actual results may differ materially from those anticipated in these statements.

This presentation does not constitute or form part of any advertisement of securities, any offer or invitation to sell or issue or any solicitation of any offer to purchase or subscribe for, any shares in Solo Oil plc, nor shall it or any part of it nor the fact of its presentation or distribution form the basis of, or be relied on in connection with, any contract or investment decision.

About Solo: a diverse portfolio of investments


CANADA:

Currently dormant Enhanced

Oil Recovery project in Ausable

Field, Ontario

28.6%Ausable,

Ontario

WEST AFRICA:

Strategic investment in Burj

Africa, with applications for

field development projects in

Nigeria

20%Burj Africa

6.5%Horse Hill

UK:

Interests in Weald Basin,

including Horse Hill and licence

award on the Isle of Wight

30%Isle of

Wight

TANZANIA:

Material stake in the prolific

Ruvuma Basin, producing Kiliwani

North gas development on Songo

Songo Island and 15% equity in

Helium One

15%Helium

One

7.55%Kiliwani

North

25%Ruvuma

Basin PSA

Our strategy

Exploration-development-production

Principally focussed on Africa & Europe

Screen numerous opportunities on an annual basis

Typically seek original WI positions between 10-50%

Non-operated but meaningful influence on JV

Seek unique opportunities with an established market


Vision

Portfolio approach to mitigate risks and provide access to multiple opportunities

Leverage equity acquired through early stage entry to fund net operating costs

Investment criteria

Mission

Investment highlights


Diverse portfolio of assets mitigates

risks and provides multiple catalysts

through active work programs

Significant upside potential from

high-impact exploration assets

Low corporate and

operating cost structure

Proven track record for executing

investment strategy. 5 out of 6 wells

resulted in commercial discoveries

Cash generative

Experience Network

Steady portfolio growth


• First gas revenues and cash flow achieved from Kiliwani North-1 in April;

• Ntorya-2 appraisal well spudded in December; and

• Successful testing of Horse Hill-1 oil discovery well with combined rate over 1,600 bopd

• Appraisal well Ntorya-2 successfully drilled and tested at a constrained rate of 17 mmscfd;

• Significant increase to resources estimates as a result of Ntorya-2, to over 1.34 tcf gross discovered gas in place;

• Filed a development plan for the Ntorya Gas Field including an early production scheme; and

• Strategic investment in helium to gain access to a potentially world scale helium project in Tanzania

• Further upgrade to Ntorya resources expected shortly;

• Ntorya-3 appraisal well expected to spud in second quarter;

• Horse Hill long-term production tests anticipated to start shortly; and

• Helium One resource report update planned and potential IPO on ASX around mid-year

Operational & corporate priorities

Corporate Presentation

• Protect investment in existing core assets

• Determine development options for Ntorya

• Obtain a development licence for Ntorya

• Initiate the monetisation of the Ntorya development

• Long-term production testing of Horse Hill-1 well

• Advance the Helium One Rukwa Project through technical work

• Recycle proceeds of Ruvuma monetisation into new and existing opportunities

• Monetisation of the Horse Hill discover by sale or early development

• Drilling of high impact exploration wells on the helium project in Rukwa

• Ntorya EPS on stream and full development significantly advanced

• Horse Hill oil production on stream

• Seek to monetise early stage investment in Helium One

• Continue to evolve portfolio, including progressing IoW and other investments

• Target further new investments as appropriate

7

Ruvuma


Three wells drilled to date that all show hydrocarbons, with two flowing at commercial rates

Onshore extension of the world scale offshore gas province in Tanzania and Mozambique

Development licence applied for and a further appraisal well agreed

Major market growth potential with bulk of the infrastructure already in place

Investment case study


First well

Likonde-1 drilled:

excellent shows for

residual oil and gas

2010 2011 2014 2015 2016 2017

Second well Ntorya-1 made a gas and

condensate discovery of commercial

interest:

• Gas Flow 20.1 mmscfd through a 1-inch

choke;

• Formation pressure of 5,424 psi; and

• Liquids Production 139 bopd of condensate

at a gas rate of 20 mmscfd

Further

2D seismic acquired

2018 - 2019

CPR by Senergy:

Potential 4.7 tcf of gas within the Ruvuma

project (153 bcf of gas in place for Ntorya 1;

some 70bcf of 2C.) Upgrade of 4 “drillable

targets” accounted for 3 tcf of gas in place

Appraisal well program: NT-2 was

drilled and successfully tested.

Resources increased to 1344 bcf gas in

place with further significant upside in the

license

Solo Oil

25%75%

Aminex(operator)

Expected news flow:

• Competent Persons Report

• NT-3 appraisal well

• 25-year development

licence

• Early production scheme

engineering

• Technical work potentially

including 3D seismic

• Solo assessing options

with regards to monetising

interest in Ruvuma

Ntorya Discovery, Ruvuma


Source: AminexSource: Aminex

Ntorya seismic interpretation


Source: Aminex

A A’

4 km

A

A’

Arbitrary line through wellsNT-1 – NT-2 – proposed NT-3

Ntorya-3 Ntorya-2 Ntorya-1

Albian reservoir

A material regional source of gas supply


Source: Aminex

So far a

~9 fold

increase in

mean GIIP

Mean 153

Mean 466

Mean 1,344

?

Synergy 2015 Resource

Estimate post Ntorya-1

(May 2015)

May 2017 Resource Update

post Ntory-2 success

(April 2017)

Updates In-house

Resource Model

(Sept 2017)

New Independent Resource

Report

(est. Feb 2018)

Ntorya Resource Estimates (bcf)

Source: Aminex

Ready access to markets


Liquids in the gas found in the discovery

well NT-1 potentially provides access to

alternate market

Distribution network progressing in order to

satisfy a large domestic demand for natural gas

estimated at over 500 mmscfd

500mmscfd

Large-scale electricity producers, other

industrial users and major population centres to

receive the gas in fast growing economy

Infrastructure – access to market through regional

Chinese built/financed gas pipeline connecting

Mnazi Bay to Dar es Salaam. Operational since

2015, currently below 25% utilisation

Source: Aminex

Rukwa


All necessary conditions for world-scale helium project are in place

Technical work continues to support the 100 bcf resource estimate already independently assessed

Engineering studies fully support commercial exploitation

Global supply and demand dynamics are extremely compelling

Helium One


Helium One is an

independent specialist

explorer focused on

becoming a major supplier

to the global helium market

Helium One’s Rukwa Project in

Tanzania has independently certified

most likely unrisked prospective

recoverable helium volume of 98.9

billion cubic feet (“bcf”)

First mover advantage into

helium market positions Solo to

capitalise on an anticipated

surge in helium demand and

weak supply fundamentals

Google X Project Loon – “Balloon powered internet

for everyone”

Uses and applications of helium


Cryogenics (primarily in medical

applications) is the largest use of the gas

and accounts for around 32% of global

demand

23%

15%

14%11%

9%

6%

6%

5%

3%8%

Cryogenics

Lifting

Electronics

Optical Fiber

Welding

Leak Detection

Analytical

Purging

Diving

Other

Helium use by sector:

Used in infrastructure, such as the Large

Hadron Collider at CERN, which requires 120

tonnes of superfluid helium to maintain its

magnets at their operating temperature and a

further truckload of helium each week to keep it

topped up

Other applications include arc welding,

purging, leak detection, chromatography,

super-conduction, breathing mixtures, heat

transfer, gas lift; and used extensively as a

purge gas in the oxygen/hydrogen propulsion

units used for Space rocketry and nuclear

ICBMs

Source: TechSci Research

Market and demand dynamics


Demand growth:

demand for helium has

been growing at around

3% each year and

demand growth

is set to continue

Current global annual

consumption of 6.0

bcf, an industry worth

in excess of US$6

billion per annum

The helium market now faces a

major supply shortfall in the

next few years. Federal Helium

Reserve was down to 20 BCF

by the beginning of 2016.

Recent Saudi action has

reduced Qatari supply

Strong price growth: Price of this

increasingly important, non-

substitutable, resource has

increased by over 95% in the past

decade - average market price of

over US$145/mcf

Currently, crude helium

is worth approximately

30 to 50 times more

than the equivalent

volume of crude

methane

Indexed Commodity Prices

Helium

Gold

Silver

PlatinumOilGas

Source: World Bank Source: USGS

Rukwa helium play


Source: Helium One

Substantial technical progress


Soil geochemistry with pronounced

micro-seepage associated with mapped

structures

Macro-seeps with 8-10%+ helium associated

with nitrogen correlated to large scale sub-surface

faulting. No hydrocarbon signatures

Seismic mapping using legacy seismic data

being reprocessed to modern standards and

showing structure and direct indications of

subsurface helium

Regional play specifics with a large, old, granitic

pluton and a recent heating event to release

helium into modern reservoirs with adequate cap

rocks

Engineering scoping fully supports economic

development by means of local cryogenic

process and international containerised export

Reprocessed pre-stack migrated data; Rukwa project 2018

Horse Hill


Part of a major new resource play in the south of England

High probability that conventional sandstones are commercial for oil production

Naturally fractured Kimmeridge limestones present a massive upside potential

Further testing and drilling will follow in 2018

Sandstone and

naturally fractured

limestone reservoirs

Testing expected to

begin in Autumn

2017

Horse Hill


Help to

supply UK

energy

demand

Flow test conducted in 2016 to test the three separate zones at HH-1 (Upper, Lower Kimmeridge Limestones

and Portland Sandstone) record-breaking stable dry oil flow from all zones ~ over 8% of total UK onshore

daily oil production.

Total combined flow rate of 1,688 barrels of oil per day from initial testing

Planning permission granted for long-term testing and further drilling, to start shortly

Planned further extended flow

tests in early 2018 and the

acquisition of 3D seismic data

High quality light, sweet oil

was produced and delivered

to the Esso Fawley refinery

North Sea-like oil rates from an

onshore vertical well. Further

significant flow rate improvements

may be achieved using horizontal

wells

Solo Oil

6.5%

Conclusions


Significant momentum and high

activity across all core assets within

Solo’s portfolio

2016 and 2017 saw Solo achieve significant operational and corporate milestones

Enhanced the core value of the portfolio and added significant upside potential

Approaching crucial juncture as Solo seeks to monetise historic investments and realise value

Well positioned for growth with diversified portfolio providing multiple catalysts in the near-medium term

www.solooil.co.uk

The Board of Directors


Has over 20 years of senior

commercial management

experience primarily in the oil and

gas and resources sectors. Dan has

worked with several AIM, ASX and

TSX listed companies providing

corporate finance, business

development and corporate

governance advice. He is currently

director of a number of private

companies and is the Solo

representative on the Helium One

board. Dan is a member of the

Chartered Accountants Australia &

New Zealand.

FINANCE DIRECTOR

DAN MALING

A member of the Australian

Institute of Chartered

Accountants, holding senior

financial and management

positions in both publicly listed

and private enterprises in

Australia, Europe and Africa.

Considerable corporate and

international expertise in the oil

and gas and natural resources

sectors. He is currently a Director

of a number of AIM listed

companies including Rare Earth

Minerals Plc, Doriemus Plc, and

Polemos Plc.

NON-EXECUTIVE DIRECTOR

DONALD STRANG

Has a BSc in Geophysics and has

worked in the energy sector for over 39

years, initially with BP plc for 23 years,

before managing the international

operations of Burlington Resources

Inc. Most recently, he was Chairman

and CEO at LGO Energy plc. Prior to

which he founding Vanguard Energy

Group, where he was Chairman and

CEO. As Founder and Chairman of VE

Resources Limited he oversaw the

rapid growth of a company in the oil

services sector, before which he was

CEO at Regal Resources plc. Neil sits

on the Board of Vanguard Energy Ltd

and owns and manages NR Global

Consulting Limited.

NEIL RITSONEXECUTIVE CHAIRMAN

Is a Chartered Engineer with a

BEng (Hons) degree in Mining

Engineering and a MEng in

Petroleum Engineering. He has

over 25 years of experience

working in industry, initially in

mining before moving to petroleum.

He has worked in a variety of

technical and increasingly senior

managerial positions in mid-sized

independent oil companies,

including Enterprise Oil, LASMO,

OMV (UK) Ltd and Afren plc.

NON-EXECUTIVE DIRECTOR

FERGUS JENKINS

Other portfolio investments

• The UKOG led PEDL 331 partnership in which Solo has a 30% interest has commenced discussions with the local planning authorities and expects to seek regulatory consents to appraise the Arreton Main oil discovery in the coming years

• Based on work by the partnership the Arreton-2 well, originally drilled in 1974, but never tested, is now considered to be an oil discovery on the Arreton Main Field. When taken together with the adjacent prospects Xodus has calculated a P50 gross oil in place estimate of 219 mmbbls in conventional reservoirs. Arreton Main is considered by Xodus to contain most likely (P50) contingent resource net to Solo’s interest in PEDL 331 of 4.7 mmbbls

• Solo continues to hold a 28.56% interest in 23,500 acres of petroleum leases in southern Ontario that contain various Ordovician reefalstructures and which host oil, gas and condensate. The operator, Reef Resources Inc., has been unable to raise the necessary capital to continue the development of the Ausable gas condensate field and no alternative funding has so far been found to unlock the potential

• Solo’s management continues to seek ways to advance or monetise the investment made in the Ausable and adjacent Airport fields, and will report progress in due course

• Solo maintains a 20% interest in Burj Petroleum Africa Limited (“Burj Africa”) a company which had applied for various undeveloped fields in the 2014 Nigerian Marginal Fields Bid Round (“Marginal Fields Round”)

• Recent developments in the world oil markets and specific to Nigeria have significantly delayed the issue of new licences under the envisaged Marginal Fields Round. The Company continues to monitor developments in Nigeria and has noted some positive movements in this regard in recent months


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