Solo Oil has announced it is selling its direct interest in the Horse Hill oil exploration site in Surrey.
In a statement, Solo said this would free the company from future direct operational spending at the site nearly Horley where flow testing is currently underway.
Earlier this month, two other companies disposed of their Horse Hill interests.
All three have sold their stakes in the operating company, Horse Hill Developments Ltd (HHDL), to UK Oil & Gas plc (UKOG), the largest single investor at Horse Hill.
The site saw a protest last week at which 10 people were reportedly arrested. A ruling on an injunction, sought by UKOG against protests at Horse Hill and another oil site, is expected on Monday morning (3 September 2018).
UKOG said today it had agreed to acquire Solo’s entire 15% interest in HHDL for £4.5m. The sum would be met through the issue of 234+m UKOG shares. This would give Solo 4.2% of the share capital in UKOG.
On competition of the deal, UKOG would hold a 71.9% interest in HHDL. HHDL has a 65% interest in the two local exploration licences, PEDL137 and PEDL246.
Solo’s Managing Director, Dan Maling, said:
“The Board has seized the opportunity to monetise its investment in HHDL and is pleased with the return we have made on our investment. The transaction enables a more liquid balance sheet and frees Solo from future direct operational expenditure at Horse Hill, but ensures we retain the exposure to the exciting upside potential of the projects within UKOG’s diverse portfolio. Importantly, we will retain the option to monetise our shares in UKOG at the appropriate time.”
UKOG executive chairman, Stephen Sanderson, said:
“This further strategic acquisition firmly cements UKOG as the dominant player in the Horse Hill Portland and Kimmeridge oil discoveries and Licences. UKOG’s three recent HHDL acquisitions provide a valuable controlling interest and exemplify the rationale behind our recent change of AIM status to an operating company. With the positive Portland test results to date, UKOG, supported by its remaining three coventurers, can now steer the way towards permanent HH oil production in 2019.”
ON 20 August 2018, UKOG announced it was acquiring the combined 7% shareholding of Gunsynd PLC and Primorus Investments PLC in HHDL for £1.925m. £425,000 of that deal was to paid in cash and the remainder through the issue of 84.7m UKOG shares.
At the time of writing (12.44pm) UKOG shares were down 1.03% at 2.4p.