Showing posts with label Commercial. Show all posts
Showing posts with label Commercial. Show all posts

Tuesday, 23 September 2025

Aminex: From Acorn to Oak – Chapter 6: Challenges and Decline

The pressure problems that forced a rethink


Every gas field has a natural life. For Aminex, the thrill of first production at Kiliwani North soon met the reality of geology and pressure.

By 2017, just a year after first gas, KN-1 was no longer flowing at its earlier rates. Inlet pressures at the wellhead began to fall, production slipped below 1 MMcfd, and the flare that had once burned brightly was now little more than a flicker.

It was a sobering moment. For a junior like Aminex, Kiliwani had been the showcase asset: the first revenue stream, the proof that Tanzanian gas could be monetised. But as production declined faster than expected, it became clear the field was only ever going to be a modest contributor.

By late 2017, the well was effectively shut-in. Without sufficient pressure to sustain commercial flow, and with little appetite for further drilling in such a small structure, the partners let Kiliwani slip quietly into the background.

For investors, it was a disappointment. After waiting years for first gas, the payday had proved brief. But the experience wasn’t wasted. The GSA, the commissioning of infrastructure, and the operational lessons learned at KN-1 all paved the way for what really mattered: the much larger Ruvuma basin discoveries.

In hindsight, Kiliwani was always a stepping stone. It gave Aminex credibility as a producer, even if only for a short period. It proved that Tanzania’s new pipeline and processing system worked. And it reminded shareholders that small fields can’t carry a company’s future — bigger projects were needed.



The fall of Kiliwani North closed one chapter, but it opened the next. Attention shifted firmly to the south, where the Ruvuma basin held a prize of a different scale.

➡️ Next time: Chapter Seven — The Ruvuma Basin Story. We’ll trace the Ntorya discoveries, the drilling of NT-1 and NT-2, and the promise of the much larger gas volumes that would redefine Aminex’s future.

Wednesday, 17 September 2025

Aminex: From Acorn to Oak – Chapter 2: Nyuni & Kiliwani Discovery

 How early wells revealed commercial gas potential


By the late 2000s, Aminex had weathered its first Tanzanian drills. Nyuni-1 had shown the system worked, and Likonde-1 had hinted at deeper promise. What the company still lacked was the magic word: commercial.

That breakthrough came not far from Songo Songo Island. In 2007, the company spudded Kiliwani-1, followed soon after by Kiliwani North-1 (KN-1). This was a decisive moment: KN-1 cut through a 60-metre gas-bearing interval and flowed at eye-catching rates — around 40 million cubic feet per day on test. For the first time, Aminex could point to a discovery that didn’t just prove hydrocarbons, but suggested they could be produced and sold.

This was the beginning of Kiliwani North as we know it — a modest field in size, but a giant step in confidence.

Behind the drill bits, the company kept building its knowledge base. Seismic campaigns across Nyuni and the surrounding licences tightened up the picture of the subsurface. New partners came in: RAK Gas, Bounty Oil & Gas, Solo Oil — each taking a slice of the action and, in turn, spreading both the cost and the potential reward.

It wasn’t all smooth sailing. Aminex still faced the usual hurdles of a junior explorer: raising cash, meeting licence obligations, and persuading the market that Tanzania was worth the wait. But KN-1 gave them something solid — a well that flowed, a resource that could be monetised, a discovery that put Aminex on the map.



For shareholders, this was the first time “production” stopped being a dream and became a near-term possibility. It still needed paperwork, partners, and infrastructure. But the direction of travel was clear: Aminex had a discovery capable of feeding into Tanzania’s emerging national gas network.

➡️ Next time: Chapter Three — Licence to Produce. We’ll follow Aminex as the Tanzanian government formally stamps approval on Kiliwani North, granting the development licence that turns discovery into destiny.

Wednesday, 13 August 2025

TPDC’s Coastal Gas Push: 2000+ Industries, 102 km Pipeline, and the Strategic Role of Ntorya

 

President’s official announcement signals a major acceleration in Tanzania’s domestic industrial gas demand — here’s why it matters for investors.

1. The Announcement: Straight from the Top

On her official Facebook account, Tanzania’s President has outlined an ambitious new natural gas initiative.
Frame-by-frame translation of the video text reveals:

  • “TPDC opens doors of 2000+ industries to natural gas on the coast”

  • “TPDC to build 102 km pipeline from Dar es Salaam to Chalinze”

  • “2000+ industries to be established in Kwala Strategic Zone”

This is not speculative commentary. It’s a direct communication from the country’s highest political office, signalling official intent and policy direction.


2. Project Overview

The announcement contains three intertwined elements:

  1. 102 km Gas Pipeline (Dar es Salaam → Chalinze)

    • Extends the existing national gas grid north from Dar.

    • Likely to connect with or support future Dar–Mombasa pipeline plans.

    • Includes a branch to Kwala for industrial supply and export handling.

  2. Kwala Strategic Industrial Zone

    • Envisioned as a major manufacturing hub with 2000+ industries.

    • Positioned as a cornerstone of Tanzania’s industrialisation and export strategy.

  3. Integration with Regional Energy Trade

    • Although not stated in the video, previous planning documents have referenced the Dar–Mombasa subsea pipeline (with connections to Tanga and Zanzibar), indicating regional export ambitions.


3. Why This Matters: The Demand Shock

The scale of ambition is enormous.
For context:

  • In August 2024, TPDC reported only 56 industries connected to the national gas system.

  • Moving from 56 to 2000+ represents a 35-fold increase in industrial connections.

  • Even at a conservative 1 MMscf/d per industry, this would imply 2000 MMscf/d of new industrial demand — multiples of Tanzania’s current total production.


4. Current Supply Reality

Existing Production

  • Songo Songo: Small offshore field; mature and declining.

  • Mnazi Bay: Producing but with limited reserves and long-standing commercial disputes.

Offshore LNG Megaprojects

  • Shell and Equinor-led developments remain in negotiation stage.

  • First gas unlikely before the early 2030s.

Implication

The government’s own timelines for industrial build-out mean it cannot wait for offshore LNG.
It must rely on near-term, scalable, onshore resources — and that puts Ntorya in the spotlight.


5. Ntorya’s Strategic Position

  • Resource scale: Independent estimates show Ntorya’s gas in place sufficient for multi-decade supply at hundreds of MMscf/d.

  • Infrastructure: Pipeline to Madimba under EPC contract, with CNPC leading — first gas expected mid-2026.

  • Commercial terms: Aminex fully carried to ~$40m net, with a more favourable PSA than industry norms.

  • Market linkage: Named as primary supplier for the Mtwara LNG project (400 → 1,200 MMscf/d).

  • Ramp-up plan: 14-well programme targeting 420 MMscf/d capacity.


6. From Dar to Kwala: The Corridor Effect

The new Dar–Chalinze pipeline creates an industrial corridor:

  • Dar: Tanzania’s commercial hub.

  • Chalinze: Strategic road and rail junction.

  • Kwala: New manufacturing and logistics hub.

This corridor could act as a gas demand anchor in the same way industrial zones drive pipeline economics in other countries. Once in place, the network can:

  • Supply large anchor customers.

  • Spur smaller industrial users along the route.

  • Serve as a feed point for regional exports to Kenya and beyond.



7. Investment Implications

Short-Term

  • The President’s announcement provides political cover for accelerating infrastructure approvals.

  • Market sentiment could improve as investors see government-backed demand pipelines emerging in parallel with Ntorya’s development.

Medium-Term

  • Demand growth in the Kwala zone could outpace initial Ntorya production, giving Aminex and its partners strong pricing leverage — especially for industrial sales (which Orca’s 2024 data shows average $8.45/MMBtu).

Long-Term

  • If the 2000+ industry target is even half-met, Tanzania will require multiple hundreds of MMscf/d of new supply, creating room for both domestic sales and LNG exports.

  • Ntorya could transition from being one supplier among many to being the critical swing producer in the domestic market.


8. Risks and Realism

  • Execution risk: Government timelines for industrial build-out have historically slipped.

  • Funding: The 69.6 billion shilling allocation for the 102 km pipeline (~$26.5M USD) covers construction but not necessarily all ancillary infrastructure.

  • Demand pacing: While 2000+ industries is the target, actual connections will likely ramp gradually.

However, policy intent is clear, and the infrastructure moves are real enough to warrant investor attention now.


9. Bottom Line for Investors

The President’s public endorsement of a 102 km coastal pipeline and a 2000+ industry Kwala zone signals a new phase in Tanzania’s energy and industrial policy.
For Aminex and Ntorya, it means:

  • Locked-in demand growth that fits perfectly with Ntorya’s production timeline.

  • Pricing upside from industrial sales into a market with tightening supply.

  • Strategic positioning as the only near-term, large-scale onshore resource capable of meeting these targets.

At today’s sub-2p share price, the market is valuing Aminex as if these policy shifts didn’t exist. If execution follows even half of the announced plan, that disconnect won’t last.

Monday, 11 August 2025

From 80p to £1.35: Rising Gas Prices Supercharge Ntorya’s Valuation Potential

 

Orca’s 2024 realised prices reveal a higher-value demand mix, doubling Aminex’s projected upside in the 14-well scenario.

When we modelled Ntorya’s long-term value earlier this year, our 14-well, 420 MMscfd case used conservative gas prices of $3.50–$5.50/MMBtu. That produced impressive numbers — with some scenarios approaching 80p per share.

But the latest Orca Energy 2024 annual report changes the game. It shows:

  • Gas-to-power: $3.88/MMBtu

  • Gas-to-industry: $8.45/MMBtu

  • Weighted average realised: $4.95/MMBtu

Many of Ntorya’s likely buyers — CNG stations, GTL, fertilizer, LNG trucking hubs — fall into the higher-priced industrial category. Using blended scenarios based on Orca’s real-world data lifts our projections dramatically:

  • 50/50 industrial/power blend = $6.17/MMBtu

  • 70% industrial blend = $7.08/MMBtu

  • 80% industrial blend = $7.54/MMBtu

Applying these to our 14-well, 420 MMscfd case with a 40% effective cash entitlement to Aminex, the implied share price potential jumps from ~80p to as high as £1.35 at standard market earnings multiples.

This isn’t pie-in-the-sky speculation — it’s grounded in realised Tanzanian gas prices from a peer producer and in Ntorya’s planned production profile. With the Mtwara LNG project naming Ntorya as its primary supply source and multiple high-value industrial markets lining up, the revenue mix could lean heavily toward premium-priced sales.

For investors, the takeaway is simple: as the demand mix shifts towards industry and transport, Ntorya’s economics strengthen — and the gap between current market price and intrinsic value widens.

Updated Orca-Based Valuation:

Our original 14-well, 420 MMscfd projections used conservative gas price assumptions of $3.50–$5.50/MMBtu. However, Orca Energy’s 2024 report confirms a weighted average realised price of $4.95, with a $3.88/Mcf gas-to-power rate and an $8.45/Mcf gas-to-industry rate. Applying blended scenarios of $6.17 (50/50), $7.08 (70% industrial), and $7.54 (80% industrial) lifts projected share price outcomes significantly across all market multiples. At the upper end, the industrial-heavy blends more than double the implied valuation compared to our earlier chart, reinforcing the bullish case for Ntorya’s earnings potential as higher-value industrial demand ramps up.

Thursday, 31 July 2025

💥 Why Aminex’s PSA Is Superior:

 

Lessons from PAET’s Disadvantageous Deal

One of the most overlooked factors in the energy investment space is the profit-sharing structure within Production Sharing Agreements (PSAs). A compelling comparison can be made between Aminex and Orca’s subsidiary Pan African Energy Tanzania (PAET)—and it shows just how advantaged Aminex really is.


⚠️ PAET’s PSA: Complex, Outdated, and Unfavourable

The PSA signed in 2001 between the Tanzanian government and PAET is widely regarded as one of the most complex and least favourable ever agreed. It is not remotely comparable to the modern, commercially fair terms under which Aminex operates.

Here’s why:

❗Protected Gas: ~30% Given Away for Free

Under PAET’s PSA:

  • PAET is required to supply up to 45.1 MMcf/d of “Protected Gas” to TPDC.

  • This gas is given away at no revenue gain to PAET—TPDC provides it on a “no gain, no loss” basis.

  • Result: Around 30% of PAET’s total production has generated no income in recent years.

⚙️ Step 2: Costs Are Recovered from Remaining Revenues

  • PAET must recover all costs—even those related to Protected Gas and TPDC’s share—from the remainder of revenues.

  • This shrinks profitability even further, especially in high-capex years.

💸 Step 3: Profit Sharing Still Favours TPDC

Even after costs:

  • Profits are shared based on production tiers.

  • At typical recent production rates (~85–95 MMcf/d), TPDC takes 45% of the remaining profit.


📉 Despite These Challenges, PAET Made Money

To their credit, Orca/PAET has delivered shareholder value:

  • 2021 Net Income: $16.37 million

  • 2022 Net Income: $27.73 million

  • 2023 Depletion Charge: $34.9 million (includes 3D seismic costs, not free-carried)

2024 was an unusual year due to operational disruptions (e.g., Songas shutdown), but in normal years, PAET still manages profitability—even under a flawed structure.


🚀 Why Aminex Is Positioned for Stronger Returns

Now imagine all that without the burden. Aminex benefits from a simpler, more investor-friendly PSA, with multiple strategic advantages:

✅ Simple, Transparent Gas Pricing

  • Aminex gas is sold at the wellhead.

  • Different pricing tiers: power gas vs. industrial gas (with the latter commanding higher prices).

✅ No Free Gas Obligations

  • No “Protected Gas” burden—100% of Aminex’s production will generate revenue.

✅ Strategic Financial Advantages

  • No corporate debt dragging on profits.

  • Free carry covers all development CAPEX (any unused portion gets paid to Aminex from ARA’s share).

  • $115.7 million in tax losses can be used to offset future taxable income.

  • $103.4 million intercompany loan (from Aminex to Ndovu) to be repaid tax-free, using future Tanzanian revenue.


NB the above is based on currently known PSA terms

From the pen of guest writer Ufufuo.

If I may say so, a nice piece that refutes a fair bit of nonsense that has been constantly spewed out on the boards when comparing Aminex to Orca and on occasion Wentworth.  To finish I wanted to clarify the accuracy and I asked an industry research model its opinion on the above. The results below...

✅ Confirmed Accurate

🟢 PAET PSA (2001) Complexity and Protected Gas

  • Protected Gas obligations under PAET’s PSA are well-documented in Orca’s filings. PAET supplies up to 45.1 MMcf/d free of charge, reducing revenue-generating capacity.

  • Cost recovery from remaining gas revenue is accurate, including TPDC’s costs.

  • Profit gas split with TPDC up to 45% is consistent with Orca’s public disclosures.

🟢 Aminex PSA (Ntorya)

  • The PSA for Ntorya is modern and post-2005, structured differently than PAET’s.

  • Aminex is free-carried by ARA up to $140m, which covers seismic, drilling, and infrastructure.

  • There are no protected gas obligations or government-imposed “no gain” provisions.

  • Tax loss carryforwards of ~$115.7 million and intercompany loan to Ndovu of ~$103.4 million are disclosed in Aminex’s annual reports.


⚠️ Partially Confirmed / Context Needed

⚠️ “100% of Aminex’s production will generate revenue”

  • This is broadly accurate assuming current PSA terms persist, but future changes (e.g., TPDC back-in rights, new offtake agreements) could introduce deductions or allocations. Still, compared to PAET, the structure is materially more favourable.

⚠️ “Gas sold at wellhead” with two-tier pricing

  • Aminex’s GSA terms are confidential, so while industrial pricing potential is real (and discussed at the AGM), we cannot confirm the pricing structure definitively. However, past statements have indicated potential for differentiated pricing (power vs. industrial).


❌ No Material Errors Found

The post maintains a truthful, favorable comparison without exaggeration. It contextualizes Aminex’s financial positioning clearly and contrasts with the PAET PSA in a fair and fact-based manner.


📝 Verdict

Post is accurate and balanced.
🔍 Minor qualifications could be added (e.g., "based on currently known PSA terms") for extra precision.
💡 No misleading or exaggerated claims were detected.



Monday, 14 July 2025

Aminex Share Price Triggers - 7 Events to a Multi-Bag Rise?

What is the expected timeline of news events coming from Aminex PLC during the coming twelve months. i.e. events that may trigger a lift in the SP!  What sort of lift (% wise) might each news item bring? Given the current known assets where might we expect the value to be?

So, how do the triggers stack up against what we have seen historically in small cap energy stocks...

Taking into account Aminex’s own projections of $40m net cash flow potential, I  have looked at the possibility of achieving 10p per share under both conservative and bull-case scenarios

The following percentages were based on typical small-cap reaction patterns in frontier gas developments—not strictly on cash flow modelling.


✅ Can These SP Rises Happen?


EventLikely SP ImpactJustified by Fundamentals?
Ground breaking      20–30%   Partially—triggers confidence
CH-1 Spud      30–50%   Yes—tied to future cash flows
CH-1 Success      50–80%   Yes—confirms resource potential
First Gas      70–100%   Strongly—actual revenue begins
Condensate Sales      30–50%   Yes—adds new revenue stream
Resource Upgrade      30–60%   Only if tied to faster monetisation
Buyout Speculation      100–200%   Market-driven, not model-driven


🧠 Final View

  • These catalysts can move the price strongly—but the justification for long-term value >10p/share requires optimism beyond what current 5-year cash flows support.

  • In short: 10p is possible, especially on momentum—but sustainable only with new news, either from condensate, strategic deals, or expanded reserves, which we do expect.

On Friday 11th July 2025 the price closed at 1.48p with a bid price of 1.4p. Assuming the 7 event triggers achieve the rises predicted above; based on the those percentages, what might the SP closing price be?  Both Worst and Best case scenarios...

If all seven major catalysts are successful and the share price reacts as expected, then:

  • Worst-case cumulative share price: ~19.9p

  • Best-case cumulative share price: ~74.8p

These are compound gains based on historical and speculative reaction ranges—not purely fundamentals. That said, these numbers show how speculative small-cap energy stocks can move dramatically with the right momentum.

Personally I think the first six events are all possible within the next 12 to 18 months, the seventh event is not something I see happening right now but it can't be ruled out long term, however that could be at a much higher SP than we currently have. Even without the seventh event we could be looking slightly under 10p from the worst case figures in a very short space of time.

Conclusion:  There are lots of minor triggers that can build momentum throughout the year and I feel 10p per share is achievable and particularly if the news flow from here remains strong.  With the AGM taking place next week, it is likely we will have an update on the FFD plans which could see another surge in price.  With EPC pipeline contract announced only 11 days ago we have already seen 23% rise from 1.2p to 1.48p and reading elsewhere,  Grok AI is predicting the SP to reach 1.59p within the next fourteen days.  As I conclude 1.52 has just been paid.  

NB: these percentage's are based on my own calculations and are not guaranteed figures. You should always do your own research and make your own decisions.

Friday, 11 July 2025

Ntorya Gas Deal: What Aminex Really Stands to Gain (Gas, Condensate & Long-Term Upside)

With pipeline construction set to begin and first gas targeted for mid-2026, Tanzania’s Ntorya gas project is entering full execution mode. For investors in Aminex PLC, now is the time to understand the full commercial picture—not just the gas volumes, but the growing revenue streams from condensate and long-term field expansion.

Here’s a breakdown of the key financial drivers and what Aminex’s 25% stake actually means in dollar terms.


🧭 Who’s Involved—and What’s the Deal?

The Ntorya development is governed by a 25-year Production Sharing Agreement (PSA) and a long-term Gas Sales Agreement (GSA) signed in 2024. The parties include:

  • TPDC: Tanzania’s national oil company; owns the pipeline and buys the gas.

  • ARA Petroleum Tanzania (APT): Project operator with a 75% stake.

  • Aminex PLC: Holds 25%, and is fully carried through development (≈$35 m net cost).

How the Revenue Works:

  • 12.5% royalty goes to government off the top.

  • 50% of the rest is used to recover costs.

  • The remaining profit gas is split: a sliding scale gives the contractor 30–40%.

  • Aminex gets 25% of the contractor's share.


🔢 What Kind of Cash Flow?

At a baseline gas price of $3.00/MMBtu, Aminex could earn around:

  • $1.4 million in Year 1

  • $5 million+ annually by Year 5 as production reaches 140 MMscfd

But that’s not the only scenario. Here’s how cumulative 10-year returns change if gas prices climb.

📊 Gas Price Sensitivity

At $3.45 (the likely GSA price), Aminex could earn $42.6 million over 10 years. At $4.00, that rises to over $49 million.


🔭 Long-Term Growth: 13 Wells, 280 MMscfd

The field development plan calls for up to 13 wells, targeting a potential production scale-up to 280 MMscfd over 10 years. This could double Aminex’s earnings versus the current 140 MMscfd model.


🛢️ The Condensate Bonus (Based on $70 per Barrel)

Often overlooked is the valuable condensate discovered alongside Ntorya gas:

  • ~3.5 barrels per MMscf based on Ntorya-1 test data

  • Up to 20 million barrels in place

  • Crucially, TPDC has no claim over condensate—meaning it can be sold at wellhead

At $70 per barrel, condensate alone could earn Aminex nearly $900,000 in Year 1, growing to $3.1 million annually as output scales.

📊 Condensate Revenue Forecast

📌 Note: condensate prices fluctuate based on oil markets, refining demand, and local offtake capacity.


✅ The Big Picture for Aminex

  • Gas: Low-risk, long-term earnings with development costs covered

  • Condensate: Pure upside on top of core returns

  • Expansion: Real potential to double revenues as new wells are drilled

For a company with modest G&A costs and no debt-linked development risk, Ntorya offers Aminex a rare mix of stability and optionality in a frontier gas economy.


Tuesday, 6 December 2022

Aminex in Tanzania Europe's Next Gas Station

 

Oil Giants Eye South African Coasts as Fuel, Climate Crises Merge

French energy giant Total Energies is preparing to submit its final application for approval to drill up to five wells for oil or gas between Cape Town and Cape Agulhas, writes Liezl Human for GroundUp.

The application is one in a rush of offshore oil and gas applications along South Africa's coast.

Monday, 28 November 2022

RNS - Aminex PSA Amendment Sets Out Terms For Gas Production

 Mon, 28th Nov 2022 07:00

RNS Number : 6981H
Aminex PLC

 

Aminex plc

("Aminex" or "the Company")

Ruvuma Commercial Update

On 25 November 2022, at the Tanzania Petroleum Development Corporation ("TPDC") headquarters in Dar es Salaam, the parties to the Ruvuma PSA signed an addendum to the PSA ("PSA Addendum"). The Ruvuma PSA, as with all other PSAs in Tanzania, contained profit share, royalty, and taxation rates only for oil production. The PSA Addendum sets out the relevant terms for gas production.