Anglo African Oil & Gas plc, an independent oil and gas developer, is pleased to announce the following:
1.New 20-year licence
The Congolese state oil company, Société Nationale des Pétroles du Congo ('SNPC'), has proposed and unconditionally recommended the award of a new licence (the 'New Licence') covering the Tilapia oil field ('Tilapia') in the Republic of the Congo ('the Congo'). The Company has a 56 per cent interest in Tilapia, with SNPC currently holding the other 44 per cent.
The 50-square km Tilapia licence area is located in the prolific Lower Congo Basin and lies adjacent to one billion-barrel fields producing from multiple pay zones.
The New Licence is proposed to have a 20-year term. Under the terms of the New Licence, the Company's wholly owned subsidiary, Petro Kouilou ('PK'), will continue to hold a 56 per cent interest in and operatorship of Tilapia. It is not proposed that a signing bonus be paid, but the Company has committed to drilling TLP-103, a new multi-horizon well targeting:
- two million-barrels of proven reserves in the R1/R2 producing reservoirs;
- an 8.1-million-barrel gross contingent resource discovery in the Mengo interval; and
- a deeper prospect, which has been assigned 58.4 million-barrels of gross unrisked prospective resources in the Djeno Sands.
The Company will make a further announcement once the New Licence has formally been ratified.
2. Drilling rig secured for TLP-103
Following the recommendation by SNPC that a New Licence be awarded, the Company has entered into an agreement with Société de Maintenance Pétrolière ('SMP'), a French drilling company with a depot in Gabon, for the supply of Rig-102 to drill TLP-103. Rig-102 was last used to drill wells for TOTAL Gabon. Allowing for transportation into the Congo and recommissioning, drilling operations will commence on or around 15 June 2018. Drilling is expected to take 64 days.
3. Site preparation for drilling of TLP-103
The Tilapia site has now been extensively renovated in preparation for drilling operations and the anticipated significant increase in production. The scope of works includes resurfacing relevant parts of the drill site, installation of a storage hangar, complete refurbishment of the storage tank and a safety equipment upgrade.
4. Workover of TLP-102
The Company is entering into a significant turnkey contract with Schlumberger to carry out a an intervention on the TLP-102 completion using coiled-tubing with a jetting tool attached with the intention of removing any obstructions or clogging to the perforations. This work will occur during April and May 2018 with a view to then bringing TLP-102 into production. This could result in materially increased production. The Company will provide an update on the results of this work once completed.
5. Workover of TLP -101
PK is due to start the dismantling and cleaning of flow lines on TLP-101 during the week commencing 5 March. Once completed, there will be a series of tests and adjustments to ensure that the well is producing at maximum levels.
The Company has now progressed all aspects of its planned works for the coming months: the most important step towards the award of a new, 20-year licence over Tilapia has been achieved and the Company now has operational certainty on the path to drilling TLP-103 and completing the workovers of TLP-101 and TLP-102. The recommendation by SNPC that this 20-year licence be awarded will dramatically improve the value of the Company.
David Sefton, Executive Chairman, commented , "The recommendation by SNPC that the 20-year licence over Tilapia be awarded represents a major milestone for AAOG. As previously announced, this is a critical first step before starting the drilling programme at Tilapia that will scale up production and test the Djeno Sands, which have proved to be highly productive on adjacent fields. Thanks to existing production and an excellent address in a proven and prolific basin, we have long held the view that Tilapia is a world-class development and exploration opportunity.
In parallel, it is positive news that we have secured a rig to drill TLP-103, that ancillary works to prepare for drilling are now complete and that progress is now being made on the workovers of both TLP-101 and TLP-102, either of which could materially increase production from the current 38 bopd.
I hope that the extent of the progress made in recent months is clear. It is a testament to our new CEO, James Berwick, and the entire team at Petro Kouilou, led most capably by its Directeur-General, that so much has been achieved since the change in the Company's management. I know that everyone is keen to keep up the pace and move through to the drilling of TLP-103.
As a final comment, I think it is worth noting that, notwithstanding the delays of last year, the Company has now made significant progress, having moved to secure a 20-year extension of the licence period, developed a robust plan to drill TLP-103 and put the right team in place to execute this plan. In my view, the position and prospects of the Company are better than was the case at the IPO."
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