Solo Buys into Tanzania Helium Explorer

UK-based Tanzania-focused independent Solo Oil said March 22 it has agreed to acquire a 10% interest in Helium One for £2.55mn ($3.18mn), of which £1.2mn has been arranged from institutional and private investors.

Helium One’s most promising prospect at Rukwa in western Tanzania is independently estimated by Netherland, Sewell and Associates to hold unrisked helium volumes close to 100bn ft³. After exploration in 2017, the company – which has no published accounts – plans to begin drilling in 2018.

Solo chairman Neil Ritson said: “Solo has for some time been investigating opportunities in the helium sector. Helium One's portfolio of prospective helium projects in Tanzania provide Solo with a unique early stage investment into a potentially world-scale helium resource.” Solo also has a 90-day call option to increase its investment in Helium One by a further 10%, for an extra £4mn.

Helium is expensive and relatively rare, with leading producers including the USA, Qatar, Australia and Algeria – but deposits have been found elsewhere, including in South Africa. It is nearly always found in association with natural gas, which may explain the Solo and Helium One partnership.

Helium is used in medical applications, as well as in airships such as this Airlander (Photo credit: UK-based Hybrid Air Vehicles)

The market's response was tepid, with Solo’s share price little changed. Its existing presence in Tanzania includes a 7.175% stake in the gas-producing Kiliwani North field and a 25% working interest in the Ntorya gas-condensate discovery, both on or near the coast, whereas the Rukwa region is on the opposite side of the country close to the border with DR Congo.

Kiliwani North three months ago was producing at only 15mn ft³/d gross, about half its nominal capacity.

Mark Smedley