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Anglo African Oil & Gas agrees rig option for sidetrack at Tilapia

Snapshot

  • Owns majority interest in Tilapia field, Republic of Congo
  • Raised up to £8.25mln through Miton and Riverfort facility
  • Report suggests "good-to-excellent" reservoir quality
oil

Quick facts: Anglo African Oil & Gas PLC

Price: 2.5 GBX

AIM:AAOG
Market: AIM
Market Cap: £9.91 m
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What it does

Anglo African Oil & Gas PLC (LON:AAOG) holds a 56% working interest in Tilapia, which is currently pumping about 40 barrels per day from the shallow R1/R2 sands.

Republic of Congo state oil company SNPC holds the remaining 44% and also a production-sharing and joint operating agreement with Petro Kouilou (PK), Anglo African’s wholly-owned subsidiary.

Other operators nearby are already producing from similar geological formations.

Below R1/R2 are the lower Mengo sands, where neighbouring fields have been producing 400-500 barrels daily from wells for some years.

A deeper exploration prospect lies in the Djeno interval, where the adjacent Minsala field produces at a rate of 5,000 bopd.

Finally, there is the relatively untested Vandji Horizon..

Consultant Havoc reviewed the interpretations by Schlumberger and Nutech of the wireline logs taken from the TLP-103C well.

The report states that "both reports have concluded that reservoir quality is between good and excellent, which supports a commercial decision to implement a plan to seek to produce from the Djeno."

In November, Anglo African Oil & Gas signed a rig agreement ahead of a side-track well planned for Tilapia Field.

It has an ‘option’ on specialised equipment supplied by Société de Forage Pétroliers (SFP) that is currently being used by a “super-major” to drill its 56%-owned TLP-103C-ST prospect and four others.

Work will take place in either the first or second quarter of next year, depending on SFP’s work commitments.

Financing plans

The £8.25mln cash is earmarked for the company to re-enter the TLP-103C well with a view to producing from a “potentially prolific” layer of the Djeno reservoir in its Tilapia project in the Republic of Congo.

For £2.56mln of the funds, existing shareholder Miton Asset Management has bought 49.3mln shares at a price of 5.2p per share, a premium of 27% to the closing share price.

An investor sharing agreement has also been agreed with Yorkville Advisors Global’s YA II fund and Riverfort Global Opportunities PCC, which together will buy £5.7mln of shares at the 5.2p price.

In October, the company said it was in talks over a non-binding agreement with “an international oil marketing and trading company,” which would provide up to US$25 million in offtake and prepayment financing for the development of the Tilapia field.

Inflexion points

  • Anglo African was recently granted renewal of Tilapia licence
  • Talks underway over terms of operating and production sharing agreement
  • Fields adjacent to Tilapia producing 5,000 barrels per day from Djeno horizon

 

 

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