Aminex PLC Final Results (0899K)

Share Name	Share Symbol	Market	Type	Share ISIN	Share Description
Aminex Plc	LSE:AEX	London	Ordinary Share	IE0003073255	ORD EUR0.001 (CDI)

	Price Change	% Change	Share Price	Bid Price	Offer Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	-0.05	-4.26%	1.125	1.10	1.15	1.15	1.00	1.15	24,757,846	14:59:17

Industry Sector	Turnover	Profit	EPS - Basic	PE Ratio	Market Cap
Crude Petroleum & Natural Gs	64k	-4.06M	-0.0010	-11.20	47.17M

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TIDMAEX

RNS Number : 0899K

Aminex PLC

14 April 2015

Aminex plc

("Aminex" or "the Company")

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2014

Aminex PLC ("Aminex" or "the Group" or "the Company"), the oil and gas company listed on the London and Irish Stock Exchanges, today announces its preliminary results for the year ended 31 December 2014.

HIGHLIGHTS

During the year:

   --     $15 million equity raised (before expenses) 
   --     New seismic in the Ruvuma Basin which high graded drill targets 
   --     Regional gas pipeline completed with sales line to Kiliwani North being connected 
   --     Part sale of Kiliwani North reduces corporate debt 
   --     US assets divested 
   --     Nyuni Area deep water potential reassessed 
   --     Provisional agreement to sell Moldova interest 
   --     Technical team strengthened 
   --     Ongoing restructuring and cost monitoring

Looking ahead:

-- 2015 will be the year when Aminex begins to reap rewards after a decade of exploration and development in Tanzania

-- In a difficult market favourable opportunities may present themselves and the Company is actively engaged in looking for production and development led opportunities

Aminex Chief Executive Officer Jay Bhattacherjee commented: "I would like to thank shareholders for their continued support. This is a very promising time for the Company, with a line of sight to first commercial production from Kiliwani North and ongoing appraisal of the Ntorya discovery. Going forward the Company will maintain strict cost control measures while opportunistically using the downturn in commodity prices to expand its business with production and development led opportunities in Africa."

 
 For further information: 
 Aminex PLC                     +44 20 7291 3100 
 Jay Bhattacherjee, Chief 
  Executive Officer 
 Max Williams, Finance 
  Director 
 
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 Dominic Barretto 
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CHAIRMAN'S LETTER

Dear Shareholder,

Herewith are Aminex PLC's ("Aminex") results for the year ended 31 December 2014. The Group made a loss for the financial year of $7.01 million (2013: $17.28 million).

Early in 2014 Aminex completed an equity raising of approximately $15 million before expenses which strengthened its balance sheet and enabled it to advance its projects in Tanzania. In conjunction with the equity raising, Aminex agreed the delay in the repayment date of its $8 million corporate debt until 31 July 2015 as detailed in the Financial Review section below. In the latter part of the year it agreed a sale of part of its interest in the Kiliwani North gas field and this has been completed since the year end. The proceeds are being used to retire a portion of its corporate debt which will de-gear the balance sheet. Also during the year, the Company achieved its previously stated objective of selling its remaining US properties and in doing so eliminating its exposure to the oil price which has fallen materially since then.

Further 2D seismic was acquired on the Ruvuma PSA during the year which has high graded the prospectivity of the area. Partners are being sought to accelerate development activity on the Ruvuma acreage in order to provide gas into the country's new pipeline infrastructure which is due to be completed and commissioned in the first half of 2015. In the Nyuni Area, a technical review has led Aminex and partners to favour exploration in the deep water part of the licence where drilling success rates are in excess of 90%.

In 2015 Aminex will become an African producer of natural gas for the first time when Kiliwani North comes on stream after delays which have been outside the Company's control. Kiliwani North will be connected to the main infrastructure via a sales line from the Kiliwani North wellhead at no further cost to the joint venture partners other than the supply and installation of a metering unit. The Kiliwani North Gas Sales Agreement is expected to be completed once it has passed the regulatory process and prior to any gas being delivered.

The last quarter of 2014 was a difficult time for our industry as crude prices fell beyond most people's expectations. Apart from the effects of negative sentiment in the markets, however, Aminex has not been badly affected by this new oil price environment which is highly unlikely to change the prices which it expects to obtain for its Tanzanian gas. Nevertheless, the Company has prudently undertaken a round of cost cutting measures.

During the year, the composition of the Board has changed with the appointment of Jay Bhattacherjee, Philip Thompson and Max Williams in March 2014 as Executive Directors. Around that time Mike Rego left the Company to take up an overseas appointment. In the second half of the year, David Hooker and Derek Tughan retired as Non-Executive Directors after long and valuable service to the Company. On behalf of the Board I would like to thank all the departing directors most warmly for their contributions. We were pleased to welcome Tom Mackay to the Board as a Non-Executive Director last September. Tom is a highly experienced oil industry professional, both technically and commercially, and we will be asking shareholders to approve his appointment at the forthcoming Annual General Meeting. As a consequence of director retirements, Andrew Hay has been appointed Senior Non-Executive Director and Keith Phair has been appointed Chairman of the Audit Committee.

I would like to thank shareholders for staying with us in turbulent times and for supporting our new management team as we move into a new phase of becoming an African gas producer. We look forward to seeing as many of you as possible at the Annual General Meeting in Dublin on 20 May 2015.

Yours sincerely,

Brian Hall

Chairman

CHIEF EXECUTIVE'S REVIEW

Aminex will shortly become an African producer for the first time and this will transform the Group. The team continues to explore and maximise the prospectivity of the Group's assets in preparation for production and the development of the onshore Ruvuma Basin where the Company has an existing discovery.

Tanzania

The major new regional gas pipeline being developed by the Tanzania Petroleum Development Corporation ('TPDC') was under construction throughout 2014 and is expected to be ready to receive commissioning gas in the first half of 2015. There is still work to do but the lion's share is complete and finalisation is in sight. The pipeline provides a commercialisation route for Kiliwani North gas and opens up the future commercialisation of the Company's Ntorya discovery and any other discoveries made in the Company's onshore Ruvuma Basin acreage.

Kiliwani North is expected to produce initially at a rate of 20 MMcfd through a new processing plant currently being constructed by the TPDC on Songo-Songo Island. The Company will sell gas directly at wellhead which will entail minimal operating costs and no liability to finance sales lines or for ongoing pipeline transportation tariffs. A Gas Sales Agreement has been negotiated and is passing through government approval stages. The agreement is part of a larger commercial transaction with neighbouring producers who will use the same facilities. The Company is aware of shareholder frustration surrounding the delays in finalising the agreement and appreciates the patience shown.

During 2014 the Company completed a new seismic acquisition programme in the vicinity of its Ntorya-1 discovery well on the Ruvuma PSA acreage. The programme was designed to identify the channel fairway associated with the Tertiary and Cretaceous reservoirs where the Ntorya-1 well tested gas at 20 MMcfd with 139 barrels of associated condensate. The seismic programme was completed on time and within budget. Based on management interpretations a resource increase from 1.3 TCF to 2.3 TCF was determined. The Company currently has an obligation to drill a minimum of four exploration wells by the end of 2016 but is in discussions with the TPDC first to focus efforts on the development of Ntorya with a view to accelerating the supply of gas into the new regional pipeline system. Should the Company have success in its appraisal and development drilling programme in the Ruvuma basin, any gas discovered can be commercialised through the new pipeline.

At the Nyuni Area PSA, the Company is looking to focus exploration activity on the deep water sector of the licence. The Tanzanian authorities have agreed to replace a commitment to shoot 2D seismic in the shallow zones with 3D seismic in the deep water sector. This will enable the acquisition of 700 square kilometres of new seismic in the deep water. As part of this approval, a two well commitment due to be carried out this year has been deferred to the next exploration phase which expires in October 2019.

United States

In 2014 the Company completed its US disposal programme through selling Aminex USA, Inc., the main assets of which were the Shoats Creek field, Louisiana, and Alta Loma field, Texas, to Northcote Energy Ltd. and Springer Oil & Gas LLC. The Company is now focused on developing its production-led business in Africa.

Egypt

At the West Esh el Mallaha-2 ("WEEM-2") concession in Egypt, the Company holds a free-carried 10% interest. The South Malak-2 well was drilled in 2014 and was declared a discovery well in February 2015 by the Ministry of Petroleum in Egypt. Further progress on the concession is subject to the submission of a field development plan. In view of Aminex's carried position and the funding partner's cumulative costs which will need to be recovered, on receipt of the proposed field development plan Aminex will review the economic benefits which would accrue to the Company and act accordingly.

Moldova

In line with its Africa-focused strategy, the Company has reached a provisional agreement to dispose of its interests in Moldova. The Company has a Partnership Agreement with a local operator and no immediate further capital expenditures are planned in the country.

Evaluation of new opportunities

Throughout the period, the Company's management and technical team has been evaluating and analysing new business opportunities with the aim of creating a larger and stronger base for its activities in Africa, balancing risk against opportunity.

Looking Forward

I would like to thank our staff and all those that have been associated with the Company's progress for their consistent hard work and our shareholders for their continued support. This is a very promising time for the Company, with a line of sight to first commercial production from Kiliwani North and ongoing appraisal of the Ntorya discovery.

Jay Bhattacherjee

Chief Executive

FINANCIAL REVIEW

Financing and future operations

After successfully completing a $15 million fundraising in February 2014, Aminex achieved its targets to acquire, process and interpret additional 2D seismic over the Ruvuma acreage in Tanzania, dispose of its US assets and, with the successful completion of a partial disposal in the Kiliwani North Development Licence ('KNDL') for $3.5 million in February 2015, materially reduce its indebtedness.

The $15 million, before expensese fundraising comprised a placing, an open offer to existing shareholders and the support of certain creditors agreeing to convert amounts owed to new Ordinary Shares in Aminex. This was supplemented later in the year with the conversion of other debts to equity and the exercise of warrants. The Company also negotiated, through the continued support of the lender, an extension to the repayment date for the $8 million corporate loan to no later than 31 July 2015. The partial disposal of 6.5% of the Kiliwani North Development Licence for a consideration of $3.5 million in February 2015 has enabled the Company to reduce the corporate loan materially since the year-end.

The new 2D seismic acquired over Ruvuma enabled management to increase its estimates of resources over the Ntorya and Likonde prospects to 2.3 TCF and to identify at least four drillable locations to assist with the development of the Ntorya appraisal area. While discussions continue with a small number of potential farmees for the Ruvuma PSA, Aminex and its joint venture partner will also consider drilling the Ntorya-2 well based on the new interpreted seismic without a farm-out. Other appraisal, development and exploration targets are currently under review.

Production from the KNDL remains scheduled to commence in the first half of 2015. The gas infrastructure being constructed by the Tanzanian government is complete for all practical purposes and the commissioning phase should start during the first half of 2015. The KNDL joint venture anticipates minimal further capital outlay, limited to the acquisition and installation of a gas metering unit. All other facilities are being constructed and funded by the Tanzania Petroleum Development Corporation ('TPDC'). There have been delays in the finalisation of the Gas Sales Agreement ('GSA') due to regulatory procedures in Tanzania. The GSA will be signed prior to any commercial production. The agreement for a disposal of 6.5% of the KNDL since the year end gives the purchaser an option to acquire a further 6.5% for $3.5 million within thirty days of the GSA being signed. Although Aminex's interest in the KNDL would be reduced to 52%, the exercise of this option would enable further substantial corporate debt repayment prior to the final repayment date of 31 July 2015.

The Directors are seeking to concentrate the Company's resources on achieving high value for shareholders. The Company has been reducing costs and commitments by implementing a strategy of disposing of non-core assets. On 22 August 2014, Aminex received the approval of shareholders for the disposal of the Group's subsidiary company, Aminex USA, Inc. The consideration comprised cash of $150,000 and shares with a value of $350,000 in Northcote Energy Limited, an AIM-listed company, without any lock up restrictions, together with monthly production payments of $10 per barrel based on production from 1 January 2015 up to a maximum of $4.5 million. The Directors are also looking to dispose of other non-core assets.

Although the Company has reduced its cost base to reflect current market conditions, it has strengthened its technical team and will develop the team further as circumstances allow.

During 2015, Aminex will continue to seek alternative financing options to enable the further reduction and full repayment of the corporate loan or if necessary a refinancing solution. The Company looks forward to the first commercial revenues from Kiliwani North and is currently planning the drilling of Ntorya-2 in the Ruvuma Basin. Following the formal agreement for deferral of a two well commitment into the next work period on the Nyuni Area PSA, the Company and its partners plan to acquire 3D seismic over the outboard sector of that PSA where potential deep water leads have been identified.

Revenue Producing Operations

The US oil and gas properties have been accounted for during the period as discontinued operations to reflect their disposal, following shareholder approval at an Extraordinary General Meeting held on 22 August 2014. The results for the comparative period have been restated accordingly.

Revenues for continuing operations arise from oilfield services, comprising the provision of technical and administrative services to joint venture operations and sales of equipment to third parties. For the current period revenues were $444,000 (2013: $724,000 restated). Cost of sales was $412,000 (2013: $516,000 restated). The gross profit for the period was $32,000 (2013: $208,000 restated).

Group administrative expenses, net of costs capitalised against projects, were $2.80 million (2013: $2.59 million restated). The increase was due to one-off payroll costs, part of which related to the senior management remuneration conditional on the successful completion of the fundraising in February 2014, and consultancy fees. These were off-set by management's continuing review of services received and the implementation of cost savings throughout the Group which has led to a reduction in the monthly overhead while available resources are focused on technical and operational capability. The Group's resulting net loss from operating activities was $3.64 million (2013: $2.50 million restated).

Finance costs reflects an interest charge of $2.24 million (2013: $4.42 million restated), which mainly consists of the charge for the corporate loan, the basis of the charge having been adjusted at the end of February 2014 for the extension of the repayment date to 31 July 2015 and for a re-calculation of the exercise price of warrants granted to the lender. The charge also includes the unwinding of the discount on the decommissioning provision and bank interest.

The results for the US operations are disclosed as discontinued operations. The loss on discontinued operations for the current period was $1.14 million after transaction costs (2013: $10.35 million restated).

The Group's net loss for the period amounted to $7.01 million (2013: $17.28 million).

Balance Sheet

The Group's investment in exploration and evaluation assets increased from $75.1 million at 31 December 2013 to $78.7 million at 31 December 2014 as a result of 2D seismic acquisition, processing and interpretation on the Ruvuma PSA and general ongoing licence costs. After review, the Directors have concluded that there is no impairment to these assets, which include the cost of the Ntorya-1 gas discovery. Following the disposal of the US assets, the carrying value of property, plant and equipment has decreased from $19.0 million at 31 December 2013 to $13.5 million at 31 December 2014, which represents the carrying value of the Kiliwani North field and the net book value of the Group's plant and equipment. Non-current assets also include the fair value of the production payments up to a maximum of $4.5 million due from future production on the US assets sold during the year and the fair value of an investment in an AIM-listed company, Northcote Energy Limited, which was received as part-consideration on the sale of the US assets. Current assets include assets held for sale of $0.85 million comprising the fair value of the Moldova assets. The Directors consider that the Moldova assets are non-core and they are expected to be sold within the short-term. After review, the Directors concluded that the carrying value of the Moldova assets remains impaired but consider the provision of $0.62 million made at the half-year to be adequate. Other current assets comprise trade and other receivables of $1.22 million and cash and cash equivalents of $1.77 million.

Under current liabilities, loans and borrowings relating to the corporate loan (see commentary under Going Concern Review) have increased from $9.7 million at 31 December 2013 to $10.2 million at 31 December 2014: the increase reflects an additional loan charge for the year of $2.2 million, an additional transfer of $0.5 million to the share warrant reserve and interest paid of $1.2 million. Trade payables amount to $1.9 million (2013: $7.2 million). The decommissioning provision, current and non-current, has decreased to $0.4 million (2013: $2.3 million) after the disposal of decommissioning liabilities on US properties on the sale of Aminex USA, Inc. and now relates only to liabilities in Tanzania. Total equity has increased by $9.0 million between 31 December 2013 and 31 December 2014 to $86.5 million. The movement comprises the net increase in issued capital and share premium of $15.5 million arising mainly from the fundraising in February and an increase in the share warrant reserve of $0.5 million. The foreign currency translation reserve remains in line with the previous year and the loss of $7.0 million for the year under review has increased the retained loss to $80.1 million.

Cash Flows

The net increase in cash and cash equivalents for the year ended 31 December 2014 was $1.60 million compared with a net decrease of $0.33 million for the comparative period. The Company raised net proceeds of $12.7 million received on the issue of new equity through a placing and open offer in February 2014 and on the exercise of certain warrants in September 2014. Net cash outflows from operating activities amounted to $3.45 million (2013: net inflows $0.8 million) after interest payments of $1.2 million (2013: $0.2 million). Expenditure on exploration and evaluation assets in 2014 amounted to $7.1 million, relating mainly to new 2D seismic acquired on the Ruvuma PSA acreage, together with the related cost of processing and interpretation, as well as continuing licence costs and the settlement of liabilities carried forward from 2013. Expenditure on property, plant and equipment of $0.2 million mainly related to licence costs and settlement of 2013 liabilities on the KNDL. After transaction costs of $0.4 million for the disposal of the US properties and offsetting interest received and loan repayments, the cash balance at 31 December 2014 totalled $1.8 million (31 December 2013: $0.2 million).

Going Concern

The Directors have given careful consideration to the Group's ability to continue as a going concern. During the year ended 31 December 2014, the Group reached agreement with Argo Capital Management (Cyprus) Limited, representing the provider of an $8 million loan facility (the 'Argo Loan') (see Note 14), to extend the scheduled repayment date of this loan to the end of July 2015. Based on current cash flow projections, the Group will not be in a position to repay the balance of the loan, (estimated to be approximately $7.8 million including interest and redemption premium and after actual and expected capital repayments since 31 December 2014), in full on the due date or meet its operational and capital expenditure planned for 2015 and 2016.

However the Directors have taken into account that in February 2015 the Group completed the partial sale of its interest in the Kiliwani North Development Licence, selling 6.5% for $3.5 million, of which Aminex applied net proceeds of $3.3 million to pay down the Argo Loan. Under the terms of the Asset Sale Agreement, the purchaser has an option to acquire a further 6.5% for consideration of $3.5 million: the option period is for thirty days following the signing of a Gas Sales Agreement for Kiliwani North gas by Aminex's subsidiary company, Ndovu Resources Limited. While the additional sale of 6.5% in the Kiliwani North Development Licence remains at the purchaser's option, the Directors have a reasonable expectation of the option being taken up and the consideration received prior to the Argo Loan repayment date of 31 July 2015 and therefore being able to pay down an amount of approximately $3.3 million from net proceeds of the second sale. The Directors are in discussions regarding the amendment of the terms of the Argo Loan, including the potential extension of the repayment period to enable the balance of the loan to be repaid from revenues from Kiliwani North expected to start being received in the second half of 2015. The Directors are also in discussions with third parties to seek a re-financing of the Argo Loan. The Directors are also reviewing other measures available to the Group, including the sale of assets, deferral of planned expenditure and alternative methods of raising capital to enable it to repay the Argo Loan.

These factors indicate the existence of a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern and, therefore, it may be unable to realise its assets and discharge its liabilities in the normal course of business. Nevertheless, after making enquiries and having considered the uncertainties described above and the options available to the Group, the Directors have a reasonable expectation that the Group either will be able to extend the repayment period of or re-finance the Argo Loan and will have sufficient funds available to it to meet other planned expenditures when they fall due for the foreseeable future. Based on the above, the Directors continue to adopt the going concern basis for the preparation of the financial statements. The financial statements do not include any adjustments that would result if the Group was unable to continue as a going concern.

The Directors understand that, as in prior years, the auditor will likely make reference to this in the auditor's report and that the auditor's opinion will not be modified in this respect

Max Williams

Finance Director

OPERATIONS REPORT

TANZANIA

Kiliwani North Development Licence - Near-term production

                                                At 31 December 2014      At date of report 
   Aminex (operator)                             65%                          58.5% 
   RAK Gas Commission                        25%                             25% 
   Bounty Oil                                              10%                             10% 
   Solo Oil plc                                                   -                            6.5%

Aminex expects first production from the Kiliwani North field during the current half-year. This will start with the supply of gas to pressure-test the new sales pipeline and gas plant. Revenue gas will commence flowing shortly thereafter. The construction of the major new regional gas pipeline system in Tanzania, from the south-east corner of the Ruvuma Basin, close to the border with Mozambique, to Dar es Salaam, is complete and commissioning is expected during the first half of 2015. The new facilities are within easy reach of Aminex's Kiliwani North and Ntorya discoveries in Tanzania, making gas production on and close to shore in Tanzania commercially viable. Negotiations on a Gas Sales Agreement ('GSA') remain subject to continuing delays as the draft agreement passes through various Tanzanian governmental reviews but Aminex expects the GSA to be completed and signed in the near future, with satisfactory payment protection terms in place and prior to first production from the Kiliwani North field. The Tanzanian government's newly installed 540 km 36" diameter pipeline will provide ample delivery capability for Kiliwani North gas and a new treatment plant on Songo-Songo Island is located less than 2 km from Kiliwani North. TPDC's contractors have constructed a sales line from the Kiliwani North wellhead to the nearby processing plant at their cost and Kiliwani North gas will be sold at wellhead through a metering unit which the Company is installing at minimal cost to the joint venture. The price that the Company will receive will be net at wellhead and not subject to any pipeline tariff or processing cost. Kiliwani North-1 has been production-tested at 40 MMscfd but production is expected to commence at 20 MMscfd (approximately 3,500 BOED) from the field in order to manage depletion most effectively. The Company believes that this level of production can be maintained for 36 months and then declined in a manner best suited to maximising the life of the reservoir. After a partial disposal of Kiliwani North to Solo Oil plc, completed in February 2015, Aminex's wholly-owned subsidiary Ndovu Resources Limited ('Ndovu') has a 58.5% working interest and is the operator of the field.

Ruvuma PSA - Onshore Appraisal and Exploration

   Aminex (operator)                                          75% 
   Solo Oil plc                                                         25%

An appraisal licence (or "Location") has been issued by the Tanzanian Government for the Ntorya-1 gas discovery. Aminex acquired 181 km of 2D seismic during 2014 to appraise the Ntorya discovery and to select drill locations over the key Likonde and Namisange prospects. The Ntorya-1 well, drilled in 2012, discovered a gross 25-metre sandstone interval and, based on the new 2014 seismic, Aminex estimates 1.9 TCF Pmean gas in-place resource for the Cenomanian sandstone reservoir. The Ntorya-1 well flowed over 20 million cubic feet per day on a 1" choke (equivalent to over 3,000 BOPD) with produced 139 barrels of 53˚ API associated condensate, believed by the Company to be the largest volume of liquid hydrocarbons tested to date in the Ruvuma Basin, onshore or offshore. The Ntorya-2 appraisal well, planned to be drilled in 2015, will target the primary Cenomanian and the secondary Tertiary reservoir intervals. It will test a total of 2.3 TCF Pmean estimated gas in-place.

Prior to Ntorya-1, the Company and its partners drilled Likonde-1 in 2010 which identified a 250-metre reservoir section with strong indications of migrated liquid hydrocarbons and which encountered source gas at depth. The new seismic data has identified two new drill locations updip of Likonde-1 and an additional well location over the Namisange prospect aimed at unlocking the potential of that part of the PSA area.

Drilling is scheduled to begin in the second half of 2015 to appraise the Ntorya discovery. The new regional gas pipeline will provide ample delivery capability for gas from the expected development of Ntorya and probably for any subsequent discoveries which the Company may make in the Ruvuma basin. The main pipeline will pass within 12 km of the Ntorya-1 discovery well.

Exploration drilling is planned over key prospects prior to the termination of the PSA in December 2016 when the remainder of the exploration acreage, outside designated appraisal, development or production licences, is due to be relinquished.

Nyuni Area PSA - Onshore, Shelf and Deepwater Exploration

   Aminex (operator)                             70% 
   RAK Gas Commission                        25% 
   Bounty Oil                                                5%

The Nyuni Area PSA was awarded in late 2011 for an eleven year period and replaced the Nyuni/East Songo-Songo PSA after it had expired, with all obligations met and a commercial discovery established. Aminex has drilled, as operator, four exploration wells in the Nyuni Area, including the Kiliwani North gas discovery which is now the subject of a separate development licence and ready to produce.

With its partners, the Company's focus has now moved from the shelf to the deep water, highly prospective outboard sector of the PSA where 3D seismic is planned, for which a variation of the work commitment and an extension to the current work period has recently been approved by the TPDC. Aminex has identified the key Pande West lead on 2D seismic in the deep water, eastern part of the PSA acreage and expects to find more prospects on the basis of a new 3D seismic programme. The drilling success rate from 3D seismic in the deeper water east of the continental shelf is very high due to the quality of the petroleum system in this basin. Aminex is currently reviewing appropriate seismic vessel options operating in the close vicinity, so as to minimise mobilisation/demobilisation costs, to acquire 3D seismic data over this area. Lower oil prices are currently impacting seismic costs, which should provide further cost savings on the acquisition programme. As the Company's initial focus is primarily on the Ruvuma PSA acreage and development of the Ntorya discovery, the Company is unlikely to be in a position to drill an expensive deep water well in the Nyuni Area in the foreseeable future without introducing a larger company as farm-in partner.

EGYPT - Onshore Exploration

Gulf of Suez - West Esh el Mellaha-2 PSC ('WEEM-2')

   Aminex Petroleum Egypt Limited         80% 
   Triumph Energy Group                               20%

Aminex has a 10% beneficial interest in this PSC through its 12.5% shareholding in Aminex Petroleum Egypt Limited. Aminex's interest in this PSC is free-carried by a partner through to first commercial production and the Company therefore has no day-to-day control over the timing of drilling operations. Three wells were drilled prior to 2014, of which one tested oil in non-commercial quantities. Activity was restricted due to political issues in Egypt and a change of control of Aminex Petroleum Egypt Limited's ultimate parent company. The Egyptian authorities extended the second period of the WEEM-2 PSC to facilitate completion of a delayed drilling programme and Aminex was notified in September 2014 that the South Malak-2 ('SM-2') well had been spudded. In February 2015 the SM-2 well was declared a discovery well by the Ministry of Petroleum in Egypt. Tests showed production flow rates of approximately 430 barrels per day of 40˚ API crude. Based on the success of SM-2, a full field development programme will be presented to the Egyptian Authorities and partners prior to commercial development. Once the full development plan has been presented and in view of the Company's carried interest which will generate income only after the funding partners have recovered their cumulative investment, Aminex will assess the economic benefit of this discovery to the Company and act accordingly.

MOLDOVA - Production

Following the acquisition of Canyon Oil & Gas Limited in February 2014, Aminex has an interest under the terms of a partnership agreement with Valiexchimp SRL, the concession-holder of two licences for the Valeni and Victorovca oil and gas fields in the Republic of Moldova. Since signing the agreement and prior to its acquisition by Aminex, Canyon drilled two wells. As the Board considers the Moldovan assets not to be core to Aminex's business, no further wells are currently planned and the Company has reached provisional agreement to dispose of its interest.

OILFIELD SUPPLY & LOGISTICS

During the year, Aminex ceased to supply equipment through its service division, AMOSSCO, as part of the process of reducing costs and concentrating on core exploration and production assets. The Group will continue to provide technical and administrative support to Aminex's operated joint ventures.

Group Income Statement