Showing posts with label Study. Show all posts

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⚠️ PAET’s PSA: Complex, Outdated, and Unfavourable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

Friday, 25 July 2025

Aminex AGM Signals Acceleration:

Aminex AGM Signals Acceleration: CH‑1 Before Pipeline, Phase 2 Plans, and Market-Ready Momentum

For me, this year’s Aminex AGM marked a fundamental shift—not just in tone, but in tempo.

For the first time in years, the Board spoke with conviction and clarity. No ambiguity. No hedging. Just a clear message: Ntorya is entering execution mode, and the drill is coming before the pipeline is complete!

🔩 “CH‑1 Will Be Drilled Before the Pipeline Is Completed”

No hesitation. No caveats. That is now the base case.

The Board confirmed that all parties—TPDC, ARA, Aminex, and the Tanzanian government—are aligned and urgently pushing to get CH‑1 drilled. PURA’s involvement has been specifically to accelerate rig tendering.

Rig tendering is imminent. While a shared rig with M&P is being discussed, other rigs are in the running—and the Board made it clear that M&P’s timeline would be too late (mid‑2026). In other words: the M&P option may just be negotiation leverage.

Bottom Line:

TPDC is “pushing like crazy”

CH‑1 is on the clock

Phase shift confirmed. Execution starts now.

📈 CH‑1 Targeting 50 MMscf/d Flow Rate

The Board corrected the assumption of 20 MMscf/d per well:

“CH‑1 is expected to flow at ~50 MMscf/d.”

This well targets a thicker section of the reservoir with stacked pays, including Unit 3—making it much higher impact than NT‑2, which flowed 17 MMscf/d under constrained conditions.

A new CPR (Competent Person’s Report) is expected after CH‑1 or Phase 1 drilling, with upgraded reserves, production profiles, and valuation.

💧 Condensate Could Add +15% to Project Value

The Board confirmed condensate volumes could deliver ~15% additional value—clean margin revenue, possibly hundreds of millions over the field’s life.

💸 Gas Pricing Has Built-In Upside

Two key revenue drivers:

Inflation clause built into the GSA
Higher prices for industrial offtake vs. utility rates

With industrial gas demand rising in Tanzania, Aminex could see surprise upside on realised pricing.

🔗 ARA Wants Aminex to Stay

Why hasn’t Aminex been bought out or diluted? The Board explained:

ARA is happy with 75% and sees value in Aminex’s public listing
The listing provides transparency, valuation, and investor reach
If ARA wanted Aminex gone, it would’ve happened already

🚀 Phase 2 Strategy: 280 MMscf/d or Bust

The operator isn’t stopping at Phase 1:

6 more wells planned
Second pipeline to Madimba
Expanded processing facility

“140 MMscf/d won’t adequately drain the field. 280 MMscf/d brings reserves into production within the license life.”

This is operator-led strategy, not speculative dreaming. Ntorya is being built as a national energy asset.

🏦 Funding Runway + Cash Flow Timing

Aminex has used ~50% of its facility, with ~$1.5m available
Burn rate: ~$1.5m/year, so fully funded for 12 months
First cash flow expected ~September 2026, once the pipeline is commissioned

Payments will be a mix of USD and Tanzanian Shillings.

🧾 TPDC to Take 60 MMscf/d Initially

TPDC has committed to 60 MMscf/d of initial offtake, with the rest going to industrial customers. Virtual pipeline, LNG, CNG, mining, manufacturing are all in ARA’s strategy.

Demand is not a concern. Discussions are already underway.

🧪 NT‑2 Test Still Going Ahead

Despite the focus on CH‑1, the NT‑2 well test is still scheduled before pipeline commissioning. It will confirm deliverability and gas composition (expected 3% CO₂ content—low and manageable).

📌 TPDC Back-in Rights Still at 15%

The 15% back-in right has not been exercised yet, and that remains the limit under the PSA. Any change would be procedural and expected.

🔍 Kiliwani, Nyuni, and Exploration Strategy

Kiliwani is on hold, but still has potential. Seismic planned.
Nyuni is “too risky” for now. Scale-down and partnership are in progress.

📣 PR Reset and New Valuation Coming

The Board acknowledged past silence and promised a PR reset:

Regular updates to resume
Journalists engaged
New Shard Capital valuation incoming—expected to be more bullish

🧠 Final Word: It’s Not “If” Anymore

This AGM didn’t just confirm:

CH‑1 before pipeline completion
50 MMscf/d flow potential
Phase 2 expansion strategy

It changed the tone of the entire project.

We’re not asking if Ntorya will deliver.
We’re asking how fast, how big, and how long we stay invested.

The above report comes thanks to the attendance at the AGM by Prospero

Aminex Model Update 25th July 2025

📌 Recent AGM & Operational Update

According to the 2025 AGM feedback and RNS issued on 17 July 2025:

Chikumbi‑1 drilling has been moved forward and is now scheduled before pipeline completion, meaning drilling activity may precede first gas pipelines.
Pipeline construction is set to begin by end of July 2025, with commissioning expected by July 2026

🧾 Does This Change the Revenue-Sharing Model?

Not materially. The PSA and GSA remain confidential, but public disclosures confirm they follow the favourable 2022 gas fiscal addendum:

These terms remain in force regardless of drilling sequence

Consultations with ARA/TPDC indicate the PSA’s exceptional commercial terms heavily benefit JV partners, especially as Aminex is carried through development.

✅ Implications for Value and Share Price

Operational Acceleration:

Drilling CH‑1 early could fast-track resource confirmation, potentially moving SP catalysts forward by months.
Rig tender launch by mid-August 2025 now likely to precede major pipeline coverage—earlier drilling → earlier data → earlier valuation triggers.

Revenue Model Intact:

Offtake structure, cost recovery profile, and contractor split remain exactly as modeled.
No change in Aminex’s fiscal share or exposure—only impact is timing of cash flows.

Share Price Impact:

Expect possible 20–50% stock moves on positive CH‑1 updates or rig contract awards.
Timeline for first gas remains mid‑2026; commercial ramp-up projections still valid.
Earlier drilling may shift upward price momentum ahead of pipeline completion.

🧪 Recalibrated Forecast Table

Milestone	Approx. Timing	Potential SP Upside (%)	Commentary
CH‑1 Drill Contract Award	Mid‑Aug 2025	+20–30%	Accelerates early-chapter SP drivers
CH‑1 Spud / Rig Mobilisation	Late 2025	+30–50%	Confirms resource & de-risks field plan
Pipeline Construction Underway	July–Aug 2025	+20–30%	Narcot entry into execution phase
Pipeline Commissioning	July 2026	+50–100%	Gas generation capability solidified

📌 Final Word

Yes, shifting CH‑1 earlier is a meaningful operational acceleration—pushing several SP value drivers forward.
No, it doesn’t alter Aminex’s revenue-sharing model or fiscal upside.
The core valuation remains valid—but the timing of expected SP triggers and cash flows is now more immediate.

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.

Thursday, 10 July 2025

Walking a Mile in ARA's Shoes - Strategic Rationale for Retaining Aminex PLC in the Ntorya JV

Here’s a strategic rationale written as if from ARA Petroleum Tanzania’s internal planning team, arguing for maintaining the current JV structure with Aminex PLC, emphasizing the benefits of Aminex’s London market presence:

📄 Strategic Rationale for Retaining Aminex PLC in the Ntorya Joint Venture

Prepared by: ARA Petroleum Tanzania – Strategic Planning Unit
Date: July 2025

1. Capital Market Access & Optionality

Aminex’s listing on the London Stock Exchange provides the Ntorya JV with indirect access to one of the world’s most liquid and reputable capital markets. This offers multiple strategic advantages:

Enhances visibility of the project to institutional and retail investors.
Preserves optionality for future fundraising—whether for downstream integration, exploration expansion, or reserve monetisation.
Provides a clear public valuation benchmark for our asset base through Aminex’s market capitalization and disclosures.

2. Governance, Transparency & Investor Confidence

The London listing mandates high standards of financial reporting, ESG compliance, and corporate governance. As a result:

Aminex strengthens the JV’s perceived integrity and regulatory alignment, both domestically and internationally.
Transparent public disclosures de-risk the JV in the eyes of financiers, multilateral institutions, and host governments.
Enhanced transparency provides reassurance to the Tanzanian Petroleum Development Corporation (TPDC) and other local stakeholders.

3. Geopolitical Diversification & Host Country Comfort

Retaining a Western-listed partner brings geopolitical balance to the JV, providing:

Greater international confidence in the project’s operational structure.
A “dual footprint” approach that aligns with host government interests in balancing foreign investment across regions (Middle East, Europe, Africa).
Increased credibility with development finance institutions and bilateral aid agencies exploring gas infrastructure support in East Africa.

4. Exit Optionality & Capital Efficiency

Aminex’s presence in the JV:

Offers ARA long-term strategic flexibility, including potential monetisation of stakes via reverse takeovers, secondary offerings, or spin-offs.
Allows for capital-light development, given Aminex’s cost-carry arrangement and minimal capital exposure during early ramp-up.
Keeps ARA’s balance sheet flexible, with the ability to scale operations without assuming full ownership risk at this stage.

5. ESG and Institutional Alignment

Through Aminex, the JV gains exposure to ESG-conscious investor groups and reporting frameworks, including:

Task Force on Climate-Related Financial Disclosures (TCFD)
UN Sustainable Development Goals (SDGs)
Local stakeholder engagement protocols under LSE guidelines

This strengthens the project’s profile among:

Sovereign lenders (e.g., AfDB, World Bank)
Global investment funds pursuing sustainable energy in Africa
Local regulators focused on responsible energy development

Conclusion

Maintaining the current JV structure, with Aminex as a 25% non-operating partner listed on the London Stock Exchange, strategically benefits ARA Petroleum Tanzania in multiple dimensions: capital flexibility, regulatory alignment, stakeholder confidence, and future monetisation. These outweigh any perceived advantages of immediate consolidation. We recommend continuing and deepening the partnership during the upcoming pipeline and production ramp-up phases.

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.

Aminex 30KM Gas Pipeline Construction

As in the most recent RNS, the Tanzanian Minister of Energy and Managing Director of TPDC outlined the Government's strong commitment to:

· Develop additional gas resources as soon as possible;

· Accelerate Ruvuma's production, which will play a vital role in achieving the country's short to medium-term gas needs; and

· Construct a 30 km pipeline to tie the Ntorya gas field into the existing Madimba processing and pumping station in the next six to nine months.

Action on the Ground - Signs of Aminex 3D Seismic Survey

Aminex Seismic Action

There are signs of action from Aminex ARA on the ground with discernible tracks showing across the proposed seismic survey area

Stock Image

Anticipation of An Aminex Update

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!

Robert Ambrose Interview - A Reminder of Aminex Future Prospects

Sunday, 25 October 2020

Aminex to feed Madimba Gas Plant

Aminex Ruvuma Development

(As known contained within the Farm-out circular dated 7th December 2018)

Forming part of the binding agreement between APT and the company

5.7 Development Cost Estimates

The initial production scheme, Case A, is designed to produce from three wells with flowlines tied to a central manifold. Onward transmission to the Madimba plant is via a 18” line. This is expected to be supplemented by a further eight wells, Case B, to absorb the remaining plant ullage. Flow assurance has been assessed with no significant issues foreseen.

Aminex PLC RNS Announcement - Farm-out completion

Aminex Farm out Completion

23 October 2020

AMINEX PLC (“Aminex” or “the Company”)

Completion of Ruvuma Farm-Out Aminex is pleased to announce the Completion of the Ruvuma Farm-Out. The Company, through its wholly owned subsidiary, Ndovu Resources Limited, has transferred a 50% interest in, and operatorship of, the Ruvuma PSA to ARA Petroleum Tanzania Limited (“APT”).

Aminex PLC - Drewky's List

Congratulations to each and everyone of you, it's been a long time coming but hopefully you will all feel a little better tonight. It was never in doubt for me although I admit my bottom was begining to twitch over the last few days.

Anyway Good luck to you all. Raise a glass and one day soon we may just well have that party! Here is the updated list and if it helps people to understand where we are then please share.

Aminex - Impressive History of New Non Executive Chairman Charles Santos

Charles Edward Santos

See footer *

From 1987 through 1989, Mr. Santos was special assistant to Diego Cordovez, the United Nations Under- Secretary General for Special Political Affairs and the Representative of the Secretary-General for Afghanistan responsible for mediating an end to the war in Afghanistan and the withdrawal of Soviet troops.

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.

TPDC Aminex Ndovu Ara Farm-Out Merger Closing in

IN THE MATTER OF THE MERGER NOTIFICATION BY ARA PETROLEUM TANZANIA LIMITED TO ACQUIRE INTEREST IN NDOVU RESOURCES LIMITED PUBLIC NOTICE (Made under Section 65 (2) (g) of the Fair Competition Act No. 8 of 2003 and Rules 42 (5) and 49 of the Competition Rules, 2018)

Rainy Season Information Mtwara Region Tanzania

CLIMATE AND AVERAGE MONTHLY WEATHER IN Mtwara, Tanzania

The following should be a useful reference when understanding the logistics where Aminex may be subject to working around the rainy seasons in the Mtwara region

Here are some average weather facts collected from historical climate data:

During the months of May, June, July, August and September you are most likely to experience good weather with pleasant average temperatures.

The Preachers List - Remedation Underway

Aminex_PLC - The List that Matters

LATEST - **KILWANI REMDIATION UNDERWAY ON SCHEDULE**

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

io commercialisation study est. $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 2020 to 2049” "Fully covered"

FARM OUT - APT have committed to spending a possible $110milion on the full field development of the Ruvuma project...

The Aminex List Updated 28/8/18