Anglo African Oil & Gas (LSE:AAOG) has announced that its highly-anticipated TLP-103 well in the Congo is expected to spud on 15 August, pushing shares up 1pc to 13.3p. In an update, the business said that the setup of its SMP-102 rig is now around 80pc complete thanks to clearing customs ahead of schedule. The anticipated date of spudding TLP-103 is subject to rig testing and acceptance, and drilling is expected to take 64 days in total.
Anglo African, formerly Namibian Resources, believes that completing a drilling programme on the TLP-103 well will be transformational. The move could allow it to begin extracting oil from the Mengo Sands and the Djeno Sands, two deeper horizons that are both prolific producers on nearby fields. TLP-103 will target producing reservoirs containing 2m barrels and an 8.1m barrel gross contingent resource discovery. Anglo African will also test a deeper prospect with a 58.4m barrel resource.
The plan is for this to ultimately take the business to its >1,000bopd production target. If this occurs, drilling on the Mengo and Djeno sands on Tilapia is successful, and oil prices are higher than $30/bbl then the firm plans to distribute free cash to shareholders through regular dividends of at least 50pc of net profits. If production reaches 5,000bopd and oil prices are above $30/bbl, then the bonus will be at least 75pc of net profits.
Today’s news follows a roller-coaster ride for Anglo African’s investors, with a £7.4m placing to fund TLP-103 receiving approval in June after repeated threats of shareholder activism.
In today’s update, David Sefton, executive chairman of AAOG, said: ‘I am delighted that we have a spud date for TLP-103 and am grateful for the hard work of our operational team that has brought this date forward in such a professional manner. TLP-103 could be truly transformational for the company and its shareholders and I am looking forward to providing further updates in due course.’