AAOG provide results from Djeno

Wireline logging confirms the presence of a 12 m oil column in the Djeno proving a functioning reservoir in this formation in the Tilapia permit area. This discovery brings the combined total of oil encountered by the Well to an aggregate of 56 m across the identified horizons.

TD of 2683 m was reached at 10h00 on Saturday 26 January and over the course of the weekend the Company ran Schlumberger wireline logs. Having completed logging the Company commissioned a CPI to calculate and qualify the results. This CPI was completed by Schlumberger on Tuesday 29 January. The results of the CPI confirm TLP-103C has encountered a 12 m oil column with a further 4 m transition zone from 2396 m to 2411 m in a dolomitic interval with a high content of shale. The interval is of Neocomien age.

Furthermore, there are several smaller potentially oil-bearing intervals which have been difficult to precisely identify due to a mud build up on the calliper. The data gathered from the Well will, subject to funding, enable the Company to optimise the location of planned well TLP-104 in order to produce from the Djeno reservoir at optimal levels.

The Company is confident that there is also a further Djeno reservoir below the current drilled depth which is prognosed to be in sandstone. The Company intends to test this secondary reservoir target with well TLP-104 along with the Vandji formation. Due to poor performance of the rig throughout the Well, the Company has decided for safety reasons not to attempt to drill further with this equipment. Accordingly, the Company intends to commission a new rig to drill TLP-104.

The Company has received technical advice that it should upgrade the topside facilities before attempting to produce from the Djeno. Moreover, the results of this Well allow the Company to enhance the well design of TLP-104 as it seeks to optimise production from the Djeno. Accordingly, the Company will now plug back TLP-103C to the Mengo and then flow test and produce from the Mengo reservoir and seek to co-mingle with the R2 reservoir in order to enhance and optimise production of this Well at high rates. During this time the Company intends to upgrade the existing topside facilities and look at options of direct pipelines to the Coraf/export terminal in Pointe Noire.

The 12 m oil column in the Djeno brings the total aggregate payzones encountered by the Well and confirmed by wireline logging to 56 m across all targeted horizons, including a 26 m oil column in the Mengo; an aggregate 13 m of oil columns across the new horizons identified between the R3 and the Mengo; and a 5 m oil column identified in the R2 reservoir (see announcement of 7 January 2019 for further details).

With the end of the Well, the Director General (Hydrocarbons) of the Republic of the Congo has written to the Company with a letter of intent confirming the intention of the Government to award the Company with a new licence over the Tilapia field which will extend to 2042. The Government has a team currently working in AAOG's Pointe Noire office to complete formalities before looking to conclude negotiations over the terms of this new licence.

David Sefton, Executive Chairman of AAOG, said, "To have encountered hydrocarbons in the Djeno at the first attempt is an excellent outcome and is testament to the quality of the geological model we put in place for Tilapia ahead of commencing drilling operations. While this Well will produce from the Mengo and R2 rather than the Djeno, we have now encountered oil in all the targeted horizons, with a total combined oil of at least 56 m, including a combined 44 m of oil in both the Mengo and R2 and across discovered additional reservoirs. We now plan to bring TLP-103C into production, and thereby increase production and cashflow at Tilapia such that this asset will become cash generative in the very near future.

Following that the Company intends to source a new rig and drill a new well, TLP-104, which will specifically target bringing the Djeno into production, as well as testing the deeper potential reservoirs in the Djeno and the Vandji.

Encouraged by indications from the government around the licence, the Company now intends to plan for a full field development at Tilapia.

We continue to be very grateful for the support of our shareholders and are pleased to have been able to bring this well to a conclusion with success in each targeted horizon."

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