What is that Aminex update and when is it due?
The short answer, how long is a piece of string?
However, anticipation has been clearly building over recent weeks as the share has at time of writing almost doubled in value to a level that in my view is still massively undervalued at this stage!
Work on Phase one of the Farm-out agreement outlined below, began on November 15th as per 2nd December RNS...
"ARA Petroleum Tanzania Limited ("APT") has confirmed that the seismic contractor commenced preparatory works as planned on 15 November 2021, has now established the GPS control points and survey equipment is being calibrated for ground staking. The Joint Venture expects line clearing and mobilisation of the camp to commence next week. The contractor is making good progress with the mobilisation of the necessary equipment with five vibroseis trucks now ready to be offloaded at the port of Dar es Salaam and the importation of the receivers is ongoing with the expectation that this will be completed next week.
The Joint Venture expects the contractor to be fully mobilised and to commence the survey on 15 December 2021 in line with the expected timetable. The first phase of seismic survey activity will continue until the weather permits and commence again once the rains have abated in late Q1 2022."
As the weather in country so far has been kind, many consider the 3D programme could be ahead of schedule. Personally, I think any early progress news over the results will not come before March possibly April, however combine that good weather, while looking back further to the operations update RNS 22nd October, it can be seen that they are clearly on schedule with regards to work programme and there are grounds to be optimistic about earlier news...
"APT, the operator, has confirmed that mobilisation of the seismic team has commenced, and the first phase of the seismic shoot will begin on 15 November 2021. The team will then complete the second phase of the seismic shoot in Q1 2022 after the Tanzanian rainy season. The Chikumbi-1 well is expected to commence drilling in Q3 2022.
The seismic acquisition and subsequent interpretation will seek to refine and confirm the exploitable gas resources of the Ntorya field. As previously announced, through a re-interpretation of the existing 2D seismic dataset, APT's revised mapping and internal management estimates suggest a mean risked gas in place ("GIIP") for the Ntorya accumulation of 3,024 Bcf (8,236 Bcf unrisked), in multiple lobes to be tested and a mean risked recoverable gas resource of 1,990 Bcf (5,419 Bcf unrisked)."
On 24th September it was announced that the seismic acquisition contract had been signed
"The acquisition will consist of approximately 338 km² of 3D seismic data focusing on the area of primary interest. AGS will mobilise, weather permitting, and focus on the proposed location for the Chikumbi-1 well ("CH-1") to acquire as much data as possible before the start of the rainy season with the programme re-commencing after that with no additional cost to the JV partners."
My own view is based on the understanding that data from the seismic machinery is processed as things go and assuming they have begun the process from around the site of the Chikumbi 1 drill pad as above, then that being the case, then this may allow for some early positive news prior to the completion of the full seismic which is why I plump for March.
Let us see how long that piece of string is! It is certainly looking likely to be "The Year" to be in #Aminex #AEX
Below is the original agreement showing its value to Aminex and although a large amount was handed over for the free carry, as shown above, the reinterpretation has massively upgraded the potential and with the seismic expected to perhaps do so even more, things look very promising for its long suffering shareholders.
11 July 2018
AMINEX PLC
(“Aminex” or “the Company”)
Transformational Ruvuma Farm-Out
Aminex is pleased to announce that its wholly-owned subsidiary, Ndovu Resources Limited, has signed a binding farm-out agreement (“Farm-Out”) with The Zubair Corporation LLC (“Zubair”). Zubair plans to assign its interest in the Farm-Out to ARA Petroleum Tanzania Ltd (a company under formation) (“APT”), which will be an affiliate of Eclipse Investments LLC (“Eclipse”), the Company’s largest shareholder.
Subject to the detailed terms set out in the Farm-Out agreement, it is intended that the Farm-Out will accelerate the development of the Ntorya project, carry Aminex through to a minimum gross production rate of 40 MMcf/d and be self-funded through a full field development project.
Deal Summary:
- In exchange for a 50% working interest in the Ruvuma PSA, APT will become operator and will conduct the following minimum work programme:
- Drill, complete, and test Chikumbi-1 (formally Ntorya-3) as soon as reasonably practicable
- Acquire, process and interpret 3D seismic over a minimum of 200 km2 within the Ntorya area, which is understood to be the first time 3D seismic has been acquired onshore Tanzania
- Establish an Early Production System to achieve accelerated first gas to a minimum gros rate of 40 MMcf/d (equivalent to approximately 6,700 bbls/d)
- Pay Aminex $5 million cash in two tranches, $3 million payable on closing and the remaining $2 million 180 days later
- Fully carry Aminex for its share of costs up to $35 million in respect of its remaining 25% interest (post-transaction) (the “Aminex Carry”), which implies a potential expenditure during the carry period of up to $105 million for the aggregate 75% working interest held by APT and Aminex
- In the event that the minimum production target of 40 MMcf/d is achieved prior to Aminex’s 25% interest having been carried for the full $35 million, APT will assign one quarter of its share of profit gas to pay the unspent Carry amount until the full $35 million is realised by Aminex
The Board of Aminex believes that the Farm-Out will accelerate development of the Company’s principal asset and substantially reduce project and other risks. The Company will retain a 25% interest in the Ruvuma PSA which includes Ntorya’s 1.87 TCF (311 million boe) Pmean gas initially in place (2017 RPS
Energy Consultants Limited report) and which is expected to be developed without the need for new funding by Aminex.
The Farm-Out constitutes a Class 1 and a related party transaction pursuant to the listing rules of Euronext Dublin and the Financial Conduct Authority and therefore requires the approval of Aminex shareholders. A circular will be posted to shareholders to convene an extraordinary general meeting which will be held in due course to approve the Farm-Out. The Farm-Out is also conditional upon Tanzanian government and other approvals. The Farm-Out Agreement is expected to be completed prior to 30 November 2018.
Please Note: My Comments are not intended as investment advice and are purely my personal views. Please do your own research before investing in any stocks