The blog this week comes from the USA, today based in Fort Lauderdale where the coronavirus is getting joint top news billing with Super Tuesday tomorrow where the needy the seedy and the greedy are fighting for the Democratic nomination.
In a ONE-Dyas transaction update the company say that the conditional SPA has been terminated and that no further discussions are ongoing with regard to the transaction.
In this context it is worth noting that whilst shareholders and the market, including myself, gave its ‘broad support’ to the deal, various factors outside the company’s control have impacted the deal. These include a 40% fall in the contract gas price, an increase in both opex and capex both now and going forward and the conditions in the London market when the fund raise was underway.
Whilst this deal could not be closed the board is committed to its gas strategy and is continuing to look at a number of other deals in the market.
The other part of the update is on strategy where the company notes the positive statement by Aminex with regard to progress being made in Tanzania. Accordingly and having had various interests in its own assets have launched a formal process for ‘possible value realisation ‘ in these assets. Specifically the board is confident that the value of its 25% interest in Ruvuma is genuine and that ‘reflects quality and upside potential ‘.
This is clearly a disappointment for Solo as the thought of a first deal looked very promising and after some time has fallen through. Despite this management is keen to keep things moving and isn’t calling it a day.
Tower has executed a binding HOT in respect of a farm-out to OilLR of a 24.5% WI in its Thali PSC in Cameroon. It includes a $7.5m contribution towards the NJOM-3 well which is expected to cost $15-16m of which $3m has already been spent, and recovery of back costs is expected.
Jeremy Asher has spent a long time and a lot of his own money on getting this well to funded delivery. I would like to have had a bit more detail on the funding, deal other side etc but understand that it had to be released and he deserves considerable credit for delivering as he always promised.