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Solo Oil unveils US$5mln convertible debt funding

Last updated: 06:00 14 Nov 2017 EST, First published: 02:27 14 Nov 2017 EST

oil and gas operations
The cash will support activities in Tanzania and onshore UK

Solo Oil PLC (LON:SOLO) has unveiled a new US$5mln convertible debt funding deal with institutional investor Riverfort Global Capital.

Riverfort is providing an initial US$1.5mln and the timings of further draw-downs at the company’s sole election.

READ: Aminex and Solo Oil temporarily reduce output from Tanzania gas field

The initial injection is expected to fund the company’s share of remaining expenses in the Ntorya-2 well, as well as further initiatives in Tanzania – including engineering studies, a new competent persons report, and additional studies for the Kiliwani North gas field.

Cash will also be used for pre-drill technical work at Helium One’s assets in Tanzania.

Solo will additionally use some cash to cover its ongoing participation in the Horse Hill project onshore UK, where a programme of new wells and long term production testing is planned.

"Solo is approaching a period of considerable activity which will require expenditure across all of the mature investments within our diverse portfolio,” said Neil Ritson, executive chairman.

READ: Solo Oil highlights opportunities as its investments advance

“We anticipate that this expenditure will enhance the core underlying value of our portfolio through a range of exciting operational milestones."

Ritson added: “Having undertaken a thorough review of the funding options available to Solo we have determined that this convertible loan facility is by far the most effective and least dilutive option for the company and its shareholders. 

“The facility conversion price is set at a 45% premium to the closing share price and the first tranche provides us with the ability to cover our share of anticipated costs associated with the multiple activities that we forecast in the near future.  

“As previously indicated, should we seek to raise significant operational funds, for example to drill additional wells in Ruvuma, we will open that funding round to existing shareholders to participate.”

Each tranche of the loan will have a twelve-month term, although each also comes with an initial three-month repayment holiday, though the loan can be extended by six months.

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on 21/7/17