11 December 2017
Anglo African Oil & Gas plc, an independent oil and gas developer, is pleased to announce a corporate update in line with its plan to increase production and reserves at its 56% owned Tilapia oil field ('Tilapia') in the prolific Lower Congo Basin. The Company's strategy includes the workover of existing wells and the drilling of TLP-103, a new multi-horizon well which, in addition to targeting producing reservoirs and an 8.1m barrel gross contingent resource discovery, will test a deeper prospect which has been assigned 58.4m barrels of gross prospective resources.
Update on new licence and drilling of TLP-103
Discussions are at an advanced stage with the relevant authorities in the Republic of the Congo (the 'Congo') for the award of a new licence in respect of the Tilapia field which, if awarded, will extend AAOG's interest in Tilapia for a considerable period beyond the 2020 end date of the current licence. AAOG wishes to ensure that this process is completed before the start of drilling of TLP-103. AAOG is very pleased with progress on the licence extension and hopes to provide a further update on this before the end of the year.
AAOG has recently inspected its preferred rig for the drilling of TLP-103, which is on operation with a major international oil company in the Congo. The work for that other company is now scheduled to complete in January, a delay from the earlier estimate of mid-December. Negotiations for the terms for the preferred rig are in their final stage. Due to the delays in the availability of this rig over the past months, the Company has taken steps to mitigate the effect of any further delay. In particular, the Company is discussing alternative offers in place from other contractors in order to ensure that drilling can commence in Q1 2018. Consistent with this, the Company will not sign a rig contract until availability is guaranteed.
The Company has managed its cash resources carefully, and continues to do so. It has sufficient capital to meet its share of the costs of drilling TLP-103.
Appointment of highly experienced Operations Manager to oversee drilling of TLP-103
As announced in the Company's Half-Yearly Report of 26 September 2017, Mr Alain Guiraud has been appointed on a fixed project contract basis as Operations Manager to oversee the drilling of TLP-103. Mr Guiraud will be based in the Congo for the duration of this project.
During a career spanning 45 years, Mr Guiraud has held senior operational positions with several leading oil and gas companies such as Chevron, Elf, Petrobras, BP, Shell, Texaco, Phillips and ENIEPSA, on both offshore and onshore projects around the world. He has extensive experience of the Congo, including as Country Manager for Halliburton, the leading oil services provider, as General Manager and Operations Manager for SFP/SNPC, the Congolese NOC, overseeing onshore drilling projects, and as Country Manager for Caroil, an oil drilling company wholly owned by Maurel & Prom, the Paris-based independent oil group. As a result, he has excellent knowledge and experience of working on onshore fields that are close to and share the same geology with Tilapia.
Mr Guiraud is working closely with Mr Gerard Bourgoin, the Directeur General of the Company's wholly owned subsidiary Petro Kouilou, through which AAOG holds its 56 per cent interest in Tilapia, and with David Sefton, Executive Chairman of AAOG.
In addition, Alex MacDonald's job title has been changed from that of Chief Executive Officer to Country Manager, Republic of the Congo. Mr MacDonald is currently on sick leave and is not expected to return to work until 7 January 2018.
Tilapia production update
TLP-101 remains in production. While there has been no increase in the flow rate of TLP-101, production gains are expected once the flow lines between the wellhead and separator are replaced to allow the removal of detritus material, which tests indicate is inhibiting production.
Testing of the R2 reservoir by AAOG earlier this year confirmed the presence of recoverable hydrocarbons at TLP-102. However, the workover of TLP-102 will now need mechanical intervention, which will be carried out by the rig after the drilling of TLP-103.
The Company continues to believe TLP-101 and 102 have the potential to produce at a combined rate of between 185 and 250 bopd.
David Sefton, Executive Chairman of AAOG, said: "Targeting proven sands, an existing discovery and a deeper interval that is known to be a prolific producer on neighbouring fields, TLP-103 is potentially a transformational well for AAOG. It is therefore key that we have the right team and the right equipment in place to ensure the best chance of success. We have now secured the services of a first-rate operations manager who, thanks to having extensive experience in this prolific region, has first-hand knowledge of the geology and the operating environment at Tilapia.
"We are conscious that there have been delays due to the availability of our preferred rig, and that this has caused frustration to shareholders. We are working hard to secure the new licence and ensure that drilling can commence as early as possible in 2018."
For further information please visit www.aaog.co or contact:
|Anglo African Oil & Gas plc||Tel: c/o St Brides Partners
+44 20 7236 1177
|David Sefton, Executive Chairman|
|finnCap Ltd (Nominated Adviser and Broker)||Tel: +44 20 7220 0500|
|Christopher Raggett, Giles Rolls, Anthony Adams (Corporate Finance)|
|Emily Morris (Corporate Broking)|
|St Brides Partners (Financial PR)||Tel: +44 20 7236 1177|
|Frank Buhagiar, Olivia Vita|
The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.
Notes to Editors
Anglo African Oil & Gas (AAOG) is an AIM-listed independent oil and gas company owning a 56 per cent interest in the producing Tilapia oil field in the Republic of the Congo with the remaining 44 per cent held by SNPC, the national oil company of the Republic of the Congo. The Company boasts a low-cost production story in a prolific hydrocarbon region with significant exploration upside, differentiating it substantially from its E&P peers. Additionally, management's remuneration is tied to hitting production milestones, reflecting their strong focus on cost control.
The Company's strategy is centred on the workover of existing wells and the drilling of TLP-103, a new multi-horizon well which will target the producing R1, R2 Sands; develop an 8.1m barrel gross contingent resource discovery in the Mengo Sands; and test the deeper Djeno Sands which have been assigned 58.4m barrels of gross prospective resources.
Tilapia has an excellent address, being located close to multi-billion-barrel fields that include the ENI-operated Litchendjili field and the 5,000/bopd Minsala Marine field. Tilapia currently produces approximately 45 bopd from two near-surface intervals. It has an undeveloped discovery in the lower Mengo sands with gross contingent resources of 8.1m barrels and a deeper exploration prospect, with gross prospective resources of 58.4m barrels, in the productive Djeno interval, from which the adjacent Minsala field produces.