Shares in small cap oil and gas firms Aminex (AEX:AIM) and Solo Oil (SOLO:AIM) are riding high after a big upgrade to the estimated natural gas resources at their Ntorya development in Tanzania.

An independent audit of the asset (75%-owned by Aminex and 25% by Solo) carried out by RPS Energy identified 1.87 trillion cubic feet of gas-initially-in-place.

This is up 12-fold on the previous third-party estimate and 44% more than previous in-house assessments.

It is important to understand that this gas-initially-in-place number does not reflect the amount of gas which will be produced – only some of it can be recovered from a reservoir. The proportion is known as the recovery factor.

The level of contingent resources offers a better guide and stands at 762.8 billion cubic feet. Contingent resources refer to oil or gas which is not yet ready for commercial development.

The RPS report suggests the drilling of a third well on Ntorya scheduled for later this year may be enough to deliver a viable project. There is a plan to link the field to the Madimba gas plant around 33 kilometres away through a pipeline.

Other key milestones on the horizon include the expected award of a 25-year development licence for the project. (TS)

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