Anglo African Oil & Gas plc (AIM: AAOG), an independent oil and gas developer, announces the following update on its corporate and operational activities.
The budget for the planned work programme to be carried out on the Tilapia field in the Republic of the Congo requires recovery of the contributions due from Société Nationale des Pétroles du Congo ("SNPC") and timely future contributions by SNPC towards its cost. While the Company is pressing SNPC hard for repayment of the outstanding debt, which is currently in excess of US$5.3 million, it has not received any repayments since the announcement on 19 September 2019. The Company has formally requested the Oil Minister to coordinate a meeting in January with SNPC and AAOG to resolve this highly unsatisfactory situation so that the work programme, or a modified plan, can proceed.
In the light of this significant cash shortfall, allied to the lower than anticipated payments under the Investor Sharing Agreement announced on 17 July 2019, the board is taking steps to reduce costs and is reviewing financing options. Absent payment from SNPC or other sources the Company will not be able to drill well TLP-103C-ST.
Moreover, the Company has recently been informed that the rig over which the Company had signed an option, as announced on 12 November 2019, to drill TLP-103C-ST, will now not be available until June 2020 at the earliest. The Company has identified two further potential rig options to enable an earlier mobilisation of the proposed programme.
The Company refers to the announcement of 12 July 2019 in which it notified the market of a proposed acquisition of Tunisian assets that it had pursued earlier in the year (the "Proposed Acquisition"). The Company received indications from significant shareholders at the time that they would not support the Proposed Acquisition and therefore AAOG did not pursue it. AAOG is aware that the acquisition of the Tunisian licences that were the subject of the Proposed Acquisition has been completed by Anglo Tunisian Oil & Gas Limited ("ATOG"), a company of which James Berwick is a director and significant shareholder. As contemplated, the Company is negotiating with ATOG for the recovery of the costs incurred by AAOG in relation to the Proposed Acquisition. The Company will make further announcements in due course.
Mediation between AAOG and SMP, which took place in the autumn, was unsuccessful. As a result, the Company is continuing vigorously to pursue legal proceedings in the Paris courts. The next procedural hearing has been set for 5 February 2020 for the filing of the Company's submissions.
Licence negotiations for the re-attribution of the 25-year Tilapia Licence are continuing. The Company has agreed the majority of the principal commercial terms.