Solo Oil PLC (AIM: SOLO), a natural resources investment company focused on acquiring a balanced portfolio of production, development and exploration assets, today announced that it has signed agreements with THREE60 Energy ltd and NRG Well Management Ltd to provide the Company with an operational capability as it implements its strategy.
Commenting on the announcement, Alastair Ferguson, Executive Chairman said: “I am pleased to announce the completion of these agreements with both THREE60 and NRG to provide Solo with the technical services to support the execution of our strategy and look forward to updating shareholders as progress is made. The structure of these agreements minimises the Company’s exposure to fixed operational costs and allow for the continued management of G&A exposure. We look forward to working closely with these top-quartile service partners as we further progress towards the completion of our strategic production goals.”
Agreement with THREE60
Solo has entered into a Service Collaboration and Risk Sharing Model Agreement with THREE60 Energy (https://www.three60energy.com/), a fast growing energy services group, to provide a range of specialist support services throughout the full asset life-cycle. The agreement provides subsurface, engineering and facilities management services in a flexible and cost-effective manner that ensure the Company is prepared to deliver on its strategic production growth plan to over 5kboepd. The agreement defines a model of risk sharing, that will minimise capital expenditure through incentive schemes linked to asset and production performance.
THREE60 has the broad industry capability and leadership experience to support Solo as it transitions from an investment company to an operating company as per the Company’s new strategy announced in March 2019. The signing of the agreement is a significant step by Solo to create a cost-effective partnering model with industry leading services companies allowing for flexible access to a full range of specialist skills necessary to grow the organisation with zero exposure to fixed overhead. The risk sharing model under the Agreement provides alignment of the companies in the outcome of asset performance and has been a proven operating model delivering significant returns from mid to late life assets.
THREE60’s aim is to deliver value adding services for owners, developers and operators of energy assets. Offering lean, fit for purpose technology driven solutions, in subsurface, wells and facilities from exploration through to decommissioning. They have demonstrable track record and extensive senior leadership experience on both transition and transformation management supporting E&P companies grow and improve their asset and production performance.
Agreement with NRG
In addition, Solo has also signed a Framework Agreement with NRG (https://nrgwellmanagement.com/), which provides engineering and project management solutions to the global upstream Oil and Gas Industry, and delivers a complete managerial and technical support package covering exploration, appraisal, development and P&A well life cycle. This agreement will provide Solo access to NRG’s vast experience in executing top-quartile drilling performance and global knowledge of well integrity.
There is no cost to the Company associated with putting in place either agreement; costs are only incurred by the Company as and when agreed activities are performed by either THREE60 and/or NRG.