Aminex Share Discussion Threads

[greyingsurfer] 29/5/2016 14:32

Even if the share price reaches 2p/share, which is 17% below the share price when JB and PT joined, he'd have netted a pre-tax gain of £185k for what is essentially a reversal of value destruction to date.

Worth not forgetting that JB & PT actually came on board at 1p (the price when the deal was approved - receiving the same number of shares at the time even though the share price was well down on point of negotiating the deal), so whatever anyone may feels about the current price, it doesn't represent value destruction since they came on board. Also of course existing holders were given the opportunity to buy shares, both as an offer and on the market, at 1p and below, my last top up was at 0.85p, unfortunately many refused the opportunity to take the offer at 1p, which reduced the company's options somewhat, as well as passing up a 30% gain or so even at current levels. The BoD in fact put in about twice as much cash at the time of the offer, when cash was needed to move things forward, as shareholders were prepared to at the time. They have also taken shares in lieu of remuneration. So I think you can argue that the BoD have been prepared to put their money where their mouths are - more so than most other shareholders have. If they can move Ruvuma, and the company valuation, forward in the way that I hope they can then I am happy for them to be rewarded. If they fail within 3 years then their options will be worthless anyway.

Peter

[el1te] 28/5/2016 23:30

In the interests of wrapping up - as I by no means want to start a lengthy set of discussions - but respecting your comments:

BunBooster - Absolutely right; no-one is being forced to invest in Aminex. With regard to the cash flow, well arguably all the potential in the ground is irrelevant if they can't fix the balance sheet, without major shareholder dilution, to enable drilling in the first instance. The only cash flows that are looking closer to being a certainty are those from KN1, but the asset lifespan is fairly short, and they certainly are not huge, especially with the 15% security liability overhanging from Ruvuma commitments.

Greyingsurfer - Regarding the options package, there's no getting around the fact that Aminex's options policy is undemanding, to say the least. It's not much more than I'd expect of a micro-cap and it is in Aminex company policy, but setting explicit vesting targets, setting an exercise price higher than the current price, or even paying part of the salary in shares would be a much 'fairer' way to align interests. Of course, what you argue is the principal of a well-designed set of share options - this isn't well-designed at all, in my opinion.

I'd even suggest that Phil Thompson, for example, doesn't need any options to be incentivised. He already has purchased around £1m in stock if I remember correctly, drew a salary of £188k last year, and now apparently needs £375k in base case options to be incentivised? (alongside the internal driver of wanting to maintain some track record integrity) - Does the lack of options supposedly mean that he has not been incentivised to date? Of course not; excessive options packages are far too widely issued by management teams of small caps who recognise there are generally not shareholder revolts to their issuance. They're often an excuse to boost potential returns in the event of success, arguably even driving higher risk taking to unlock those returns, which is often termed moral hazard risk.

Even if the share price reaches 2p/share, which is 17% below the share price when JB and PT joined, he'd have netted a pre-tax gain of £185k for what is essentially a reversal of value destruction to date.

Edit: Won't go into the details regarding the farmout situation. Had fairly clear comments that were made, but no need to dig up old ground on that issue.

Anyhow, good to see there is still healthy debate on this board, and I wish you all the best and a happy bank holiday.

[blackgold00] 28/5/2016 20:35

thanks greyingsurfer for the time and the effort of that post and BunBooster you are so right, " Aminex has not been for widows and orphans". but with regards to the risk and reward every one has to calculate and invest according to their means, and then win or loss the experience can be ultimately enriching.

[warbaby43] 28/5/2016 12:14

Bizarre, and superficially at least, the sort of occurrence that is unlikely to promote much investor confidence in the Tanzanian government or its entities:



Speaks volumes that Symbion are prepared to go public in such a way

[bunbooster2] 28/5/2016 11:15

Elite - I would say that there is a very clear "long-term obvious cash flow potential that won't be re-invested into still fairly high-risk drilling"

It's the on shore Tanzanian assets. A neighbour hit 2.7TCF recently and reckons that is worth 8 billion dollars. Billions have been and are being spend on infrastructure that will use gas.

Aminex has always been high risk, high reward. The risk hasn't paid off and there is a high chance it never will - but the potential pay off is clear. It has never been for widows and orphans.

[blackgold00] 28/5/2016 09:47

yes mostly agree warbaby, there was talk via some Solo article last week about them meeting some business folk there as well, all a little bit interesting, time will tell.

[warbaby43] 28/5/2016 09:11

With regard to the Big trip, be interesting to know if anyone else is heading to Tanzania - RAK and Bounty too, if it's all about KN-1?

If it is, however, to be additionally or solely about Ruvuma discussions with TPDC, then while you might be right, blackgold, on the matter of the communication channel in normal times, these are anything but with the breaches of obligations on both Ruvuma and Ntorya, the aborted farmout, the AEX financial difficulties and the much promised issue of early N-1 development and N-2 drill. A Solo presence would, therefore, be unsurprising at a seemingly critical juncture.

Be interesting to know too if The Lender, whoever that might be, is also Tanzania bound.

[blackgold00] 27/5/2016 18:14

i spend a lot of my time working out what abbreviations stand for, i just worked yours out thecynical,jmo, "just my opinion", i think. :)

[thecynical1] 27/5/2016 17:26

ref 56557 - that would involve reality....what are you thinking? you can't expext reality from a company who may not have licences this time next year.....jmo.

[thecynical1] 27/5/2016 17:23

post 56570 inspires confidence..NOT....guess some stuff got lost in translation.......calling consultants "not fit for purpose" is a bit of a classic.... ; )

.wonder when that guy will decide that the gas suoply should be under government control as well....

[blackgold00] 27/5/2016 13:50

from LSE biglad0001 SOLO TWEET

Solo Oil and Gas ‏@solooilgas 5m5 minutes ago

#Solo Chairman Neil Ritson will be travelling with Jay Bhattacherjee, CEO of @AminexPLC to #Tanzania next week.

well by then it will be about 60 days since first gas from KN, i'm wondering whether they'er ready to conduct the well test

from the last IG interview from about 30sec in



also from first gas RNS, my brackets

"Initial production rates will be carefully managed to allow for testing and commissioning of the gas processing plant and pipeline, while recording critical pressure and flow rate measurements to determine the optimal flow rate to maximize the life of the reservoir. Together with TPDC the Company plans to conduct a well test (during the production build up) to determine the optimal flow rate. It is this optimal flow rate that will become the Commercial Production Rate and the Company intends to flow gas at this rate for as long as possible prior to a natural decline in production."

[blackgold00] 27/5/2016 13:35

yes warbaby, i think Tanzania has come of age, and woe to the independent that hasn't Tanzania's best interests at heart.

the article is a couple of months old now, but its becoming clear where this is all leading, as far as the energy sector in Tanzania goes, the state will be in control.



(Build, not hire, Tanesco directed)

"Hired plants are very expensive. They are a big burden to consumers who have to pay more to compensate for the high capacity charges, thereby benefitting the companies, which sign up with Tanesco like it was the case with IPTL,” Dr Magufuli observed.

He added that there had to be a point whereby the country could produce its own reliable electricity and be able to sell the surplus to other countries - just like what some countries are doing.

“That capacity is there,’’ the president stated. Dr Magufuli directed the Minister for Energy and Minerals, Professor Sospeter Muhongo, to work on the issue and always be wary of experts who advise on the use of hired power plants to handle shortages.

"Experts or consultants who advise us to hire power plants instead of buying our own are not fit for the job and if possible, terminate them since they do not wish this nation well," President Magufuli further observed and directed

Laying of the foundation stone for Kinyerezi II 240-megawatt plant came a few months before the launch of Kinyerezi I, which currently generates 150 megawatts with plans afoot to extend its capacity to 185 megawatts. Dr Magufuli said the government will inject 20 million US dollars for the extension of the project.

"Japan has injected 85 per cent of project funds, which amounts to 292 million US dollars while Tanzania has committed 15 per cent to the project, equivalent to 52 million US dollars (110bn/-)," said Prof Muhongo.

The project will be implemented by SUMITOMO Company from Japan and would be responsible for all the engineering work and plant procurement.

"This project is going to be owned by the government through TANESCO by 100 per cent, therefore the country will be the sole-owner of the electricity being generated,"

[warbaby43] 27/5/2016 10:16

It is/was Symbion seeking funding for a 400 rising to 600MW Mtwara power plant:

[gerryjames] 27/5/2016 09:44

Say "no comment required" PJ.

[greyingsurfer] 27/5/2016 09:29

PJ1

I believe AEX have approached at (at least) one Company (NOTE-not the other way around) who's published strategy is to 'acquire' distressed assets, by either farm in or contract via a strategic partner.

I've no doubt that the company are talking to all sorts of people about ways forward, in particular how to progress the work Ruvuma, no surprise really. Farm ins and strategic partnerships have both been mentioned.

Did anyone bother to contact the Company for clarification?

Did you? And I don't mean on the boards.

Though quite why this exercises you so much, given that you don't hold and have stated you have no interest in doing so escapes me somewhat.

Peter

[tmmalik] 27/5/2016 08:34

Finally some signal about payment next week.

[blackgold00] 27/5/2016 04:40

Hallowed Be Thy Name..........Member since: 24 May 2016.....?

[hallowed be thy name] 26/5/2016 22:03

Brilliant! 1-0 to the PJ1 hook,line and sinker.

[emptyend] 26/5/2016 20:20

#56558: PJ1 "I do often get it wrong" .......No comment required.Bit busy on other matters at present & no time to follow boards, so please don't presume otherwise from this post.

[pj 1] 26/5/2016 19:54

p.s. I am fully aware emptyend, responsible for corporate governance reads this thread. Maybe he would like to respond?