Solo Oil looking for another European gas portfolio after North Sea deal falls through

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Solo Oil PLC‘s (LON:SOLO) proposed reverse takeover with ONE-Dyas gas has fallen through due to a failure to renegotiate terms after a slump in European gas prices.


In addition, cost forecasts rose, while the share price was knocked by Brexit uncertainty.


Solo agreed in October to acquire a package of natural gas fields in the Dutch section of the North Sea from ONE-Dyas for EUR30.2mln upfront, EUR2mln deferred and partly funded by a GBP20mln equity raise.


Solo added it has enough cash to meet its commitments in Tanzania but has now set up a data room for anyone interested in acquiring its 25% stake in the Ruvuma PSC.


A formal sales process will start next week, with Solo, in the meantime, looking for another portfolio of European gas assets to acquire.


Tom Reynolds, chief executive, said: “It is clearly disappointing for management and shareholders that we could not complete the proposed transaction, however, the value of the asset package changed significantly after the signing of the SPA and it is the board’s responsibility to ensure the company does not overpay for acquisitions.


“This package of assets was one of a number targeted by Solo and, whilst this has resulted in a delay to achieving completion of the first transaction in line with our strategic vision, it does not alter our strategy to build the company around opportunities in the European gas market.”

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