Aminex Unofficial Blog Direction Change

Having not posted on the bulletin boards since July 2019 my personal views apart from limited words on Twitter have been pretty much kept to myself.

However I think it's time I should let my own feelings be known once again, but I'll not be doing it on the lunatic asylums known as the bulletin boards.

Therefore my thoughts and views will be placed on the blog and the article links will be tweeted out @AminXunofficial as per usual.

Firstly, I'm going to review and update the famous list that the bears love to pick apart.  Where time estimates were given, I have added two years to allow for the delays by government in granting it's approvals.  It is fairly clear now that those approvals are just around the corner and though frustrated myself like any other true investor.  I have never doubted they will come!

The current gas in place figure is 1.87tcf  a twelve fold increase in the CPR of 2015

5 TCF GIIP - for Ruvuma - Ntorya 1.9TCF GIIP - 368 BCF 1C - 763 BCF 2C & 1162 BCF 3C

There were significant oil shows at the last drill NT2

Chikumbi 1 is the next drill to be spudded and expected before Qtr1 2021

Farm-Out with Ara Petroleum (APT) to provide Aminex a Full carry worth $140,000,000 include 25% Solo Oil input.

io (Baker Hughes) commercialisation study estimated... $143m spend to recover 3/4 tcf based on current gas price, $3.27/mcf is worth $25m to $35m cashflow per annum to Aminex from 2022 to 2051” "Fully covered" (adjusted price $2.70/mcf = $21m to $30m per annum) 

APT commitment is $110milion on the full field development of the Ruvuma project...

...which includes a committed spending of $40million to Aminex. $5m cash & balance $35million paid as full carry up to 40MMscf/d at which point any unspent remainder will be paid in cash from gas profits.

APT are acquiring 50% of the Ruvuma project with Aminex retaining 25%.  Solo Oil hold the remaining 25%

“APT will establish an early production system to achieve an accelerated first gas to a minimum a MINIMUM gross rate of 40MMscf/d by Qtr1 2022” representing full carry to minimum $10 to $12m p.a. cashflow “Not revenue – Free Cash”

Much more expected!  "Not worth building a 30Km pipeline for just 40MMscf/d"

Adding the Solo share of costs $35m gives $140m total potential spend & brings full carry to profitability as per “io” projections

"Any further spending will be self-generated"

“Chikumbi-1 well pad is complete - planning to drill this year” (Held up awaiting approvals - Long lead items ordered)

APT opened a specific office for the project in Dar Salem

“Multiple Targets - Gas - Oil at the lower level - Oil shows found down dip at previous drill”

“Planned around same time as CH1 drill” APT will acquire 3D seismic data over 200km2 to optimise further drilling targets

Based on results of CH1 and 3D seismic APT will build a 33km pipeline to Mdimba gas plant to allow for maximum gas delivery “planned for 2021”

“Q1 2022 Monetisation to coincide with demand call”

“Plan” Drill CH1 alongside 3D & back with further 3 to 4 drills (possibly 2020/21)

Full field development is projected to 140mmcfd by 2024/27’s

“Kiliwani remediation with income stream was planned to resume 2018” (This is understood to be suspended due to costs and other uncertainties over time schedules to get the farm-out approvals)

There are still options open to resume that work after the approvals and there is possibility of a further drill at Kiliwani South

Nyuni – There are plans for 3D seismic with a further partner hinted at since in the pipeline.

**TPDC have announced feasibility study for gas pipeline to supply Uganda.  UPDATE: AGREEMENT NOW SIGNED FOR CONSTRUCTION (Aminex in pole position to supply)

**SADC nations agreed to develop plan to allow gas imports from Tanzania, Mozambique & Namibia

Since the above was initially put together we have seen many board changes and our CEO left due to ill health in summer 2019 - The latest news is that Charles Santos has joined the company as non executive chairman & Tom Mackay has returned as NED while Robert Ambrose has reverted to interim CEO

Negatives

Delay after delay over the approval. These delays are obviously not of the companies choice and though the bears continually blame the board for their own trading deception purposes, they know as well as anyone else, that it is a red tape issue.

The company have completed all that has been required.  They have paid a capital gains tax as required and have been fully supported by APT in this, as they have provided a loan to cover the amount.

They have changed the name of the drill at the request of the government from Ntorya to Chikumbi.

The TPDC conducted the required E&H studies, accepted the proposals for the farm-out and sponsored those proposals to the ministry.  The government put out the official merger notices to the country 7th August 2019, and an extension licence was granted earlier this year. My view is that the government would not waste its time with all this if it had no intention of granting approval.

Cash position - Not clever, as there is no current income coming through, but a $5m payment from APT plus back costs since agreement are due to be paid on approval. Additionally, there is a significant sum still to be paid for gas already supplied, currently withheld and in dispute due to the companies belief an unjust tax claim. The sums withheld far exceed what is claimed, so whatever the outcome of the dispute the company will still be due a significant seven figure payment once settled.  The directors and senior staff have all taken large cuts to their salaries and operational costs have been cut overall.  I get the impression keeping the lights on is not an issue and that management are extremely confident of approval coming through anytime in the next few weeks.

It is understood that the Zubair family are extremely supportive of the company and they wish to help the company grow.

Latest accounts 2019

While Malcy a well known oil & gas commentator may not be happy with the government delays he stated...

"The Zubairs are putting $105m on the table, they wouldn't be doing this if they did not think it was worth a lot of money" ”It's in the bucket, it's for a good reason. The value of this asset is high!"