Solo Oil PLC (LON:SOLO) told investors it has now entered into a conditional agreement to sell its stake in the Ausable Reef gas assets, in Ontario.

It owns 28.56% of the assets, some 23,500 acres of petroleum leases with shut-in operations, which will be bought by Levant Exploration and Production Corp.

In return, Solo will receive the equivalent of a 1% Gross Overriding Royalty over any future production revenues from the assets.

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Solo noted that previously, in 2017, it impaired the value of the Ausable Reef assets down to zero and last year incurred only nominal costs related to them.

“The disposal of the Ausable Reef interest is another milestone as we transition the company away from legacy assets and progress along our stated strategic path,” Tom Reynolds, Solo chief executive said in a statement.

“Over the last year we have made considerable progress in rationalising the portfolio to align it with our strategic objectives and provide line of site to value realisation on behalf of our shareholders. Completion of our ongoing Tanzanian assets sales process would mark a further major milestone in achievement of this strategy,” he added.

The company said that it expects to complete the transaction in the near future once conditions set out in the agreement are satisfied, including Levant’s due diligence.