TIDMSCIR
RNS Number : 3776A
Scirocco Energy PLC
02 February 2022
2 February 2022
Scirocco Energy plc
("Scirocco Energy" or "the Company")
Operations Update
Scirocco Energy (AIM: SCIR), the AIM investing company targeting
attractive assets within the European sustainable energy and
circular economy markets is pleased to provide the following update
on its operations:
EAG Joint Venture
The Company recently supported Energy Acquisitions Group Ltd
("EAG"), the specialist acquisition and operating vehicle in the
sustainable energy sector, to acquire its first cash generative
anaerobic digestion asset, Greenan Generation Limited ("GGL"), in
which Scirocco Energy holds a 50% interest:
Financial
In Q4 2021 the revenue received for the quarter by GGL totalled
GBP300,352 (unaudited) supported by high power prices through the
period. This compares to the same period in 2020 where revenue was
GBP232,968 (unaudited). At current power price levels EBITDA for
the first 12 months of EAG ownership is estimated to exceed
GBP600,000 rather than the GBP470,000 guidance previously
issued.
Operational
Q4 2021 was the first complete quarter of EAG's ownership of
GGL. During the quarter the following upgrades were initiated to
ensure biological, mechanical, and financial stability going
forward.
-- Engagement and retention of a consultant biologist to
commence a medium-term biological analysis of the plant to support
optimisation of feedstock and process.
-- A number of equipment upgrades including the installation of
an automated radar system to remove the requirement for operator
intervention on digester recirculation and level monitoring.
-- Extended equipment support contracts and upgraded control
software systems to ensure operational efficiency and mechanical
stability.
-- Recalibration and replacement of gas monitoring and treatment
equipment to ensure accurate recording of methane and associated
gas values.
-- Replaced a number of the mixers due to normal wear and tear
experienced over the plant's six-year operational life. This will
ensure good mixing and support optimal operational performance
going forward.
Furthermore, the EAG team is currently reviewing options for a
feedstock optimisation programme.
Business Development
From a business development perspective, EAG is currently
carrying out due diligence on two additional AD plants. Under the
arrangement with SEM (announced by Scirocco in an RNS dated 9
December 2021) the Company and EAG gained exclusive access to a
technical solution for the processing of digestate into a nutrient
dense organic fertiliser. The EAG team is engaged in discussions
regarding two merchant installations of the SEM equipment on third
party AD plants.
Tom Reynolds, Scirocco Energy CEO commented "We are delighted to
see excellent operational performance supported by the current high
wholesale power prices. EAG's experienced team have begun investing
to automate and future proof the asset and are making clear headway
with an attractive pipeline of opportunities to support further
investment. Scirocco's 50% interest in EAG represents a robust,
scalable platform primed for growth and we look forward to working
with the team going forward."
Tanzania Operations
Operational activities under the Ruvuma PSA in Tanzania, where
Scirocco Energy owns a legacy 25% working interest, have progressed
under the supervision of operator, ARA Petroleum Tanzania
("APT"):
-- Seismic camp fully constructed, and the contractor Africa
Geophysical Services Limited ("AGS") is completing the mobilisation
of all necessary equipment to site. This work is expected to be
completed by mid-February;
-- Acquisition of the 338km(2) 3D seismic survey will commence upon full equipment mobilisation;
-- The 3D seismic survey is an integral step in progressing and
de-risking the Ntorya gas discovery ahead of the drilling of the
Chikumbi-1 ("CH-1") well;
-- The seismic acquisition and subsequent interpretation will
seek to refine and confirm the exploitable gas resources of the
Ntorya field. Additionally the survey will provide greater clarity
of the potential upside of the discovery as identified by the
operator APT, through a re-interpretation of the existing 2D
seismic dataset. APT's revised mapping and internal management
estimates suggest a risked prospective gas in place ("GIIP") for
the Ntorya accumulation of 3,024 Bcf (gross basis, mean case), in
multiple lobes to be tested, and a prospective, risked recoverable
gas resource of 1,990 Bcf (gross basis, mean case); and
-- APT continue to progress with well planning for the CH-1 well
with key contracting now being undertaken. The operator continues
to target a Q3 spud.
Commenting on the update, Tom Reynolds said "Ruvuma Operator,
ARA Petroleum Tanzania, has injected energy into the operational
programme and we are seeing the benefit of this engagement now.
Following the award of the seismic contract in Q4 2021 and the
ongoing mobilisation of the equipment to site, the Joint Venture
expects to commence shooting seismic imminently. This will provide
the high quality 3D definition of the subsurface in preparation for
the appraisal well to be drilled in Q3 this year. An exciting time
on the licence which has the potential to prove up substantial gas
volumes. As Scirocco moves towards these key operational milestones
we are continuing with our ongoing discussions regarding possible
farm-down and divestment options, while simultaneously progressing
our funding options in the event that we retain 25% interest in
Ruvuma at the time of the CH-1 well."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation No. 596/2014, which forms part of
United Kingdom domestic law by virtue of the European (Withdrawal)
Act 2018.
For further information:
Scirocco Energy plc
Tom Reynolds, CEO +44 (0) 20 7466
Doug Rycroft, COO 5000
Strand Hanson Limited, Nominated Adviser +44 (0) 20 7409
Ritchie Balmer / James Spinney / Rory Murphy 3494
WH Ireland Limited, Broker +44 (0) 207 220
Harry Ansell / Katy Mitchell 1666
Buchanan, Financial PR +44 (0) 20 7466
Ben Romney / Jon Krinks / James Husband 5000
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