Solo Oil's joint venture partner Reef Resources has secured additional funding through a private placing of shares, and this has triggered the second influx of funding from Solo to Reef.
Solo has acquired an additional 14.3% working interest in Reef's Ontario properties for $1.5m, bringing the AIM-listed company's interest in the Ausable field development to 38.1%.
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Reef's placing of shares and warrants raised gross proceeds of C$1.69m.
The funds will be used to roll out of the successfully tested hydraulic venturi system in all producing wells at the Ausable field to increase production, and complete two additional bypass gas zones at the Airport well and, if required, acquire additional natural gas for re-injection into the Ausable reef.
The initial production rate of 63 barrels of oil per day (bopd)established at Ausable well 1 is in the expected range (50-70 bopd) and confirms the venturi pump systems is achieving the anticipated results. Once the field is re-pressurised high production rates will be possible, the firm said.
Solo executive director Neil Ritson said: "We are extremely pleased that Reef has raised the additional funds envisaged under the agreement with Solo announced on 11 July 2011. The programme of well tie-ins and gas injection can now be pursued which will result in a significant increase in production.
"Along with our enhanced knowledge of the reservoir, gained through studies conducted during 2011, we remain confident that the field will deliver to our expectations and will be a model for similar developments in the surrounding area."
The share price fell 3.36% to 0.57p by 12:32.
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