Aminex Share Discussion Threads

[gerryjames] 07/6/2016 16:59

Like buses. Lol@LT. Not considering the dividends then. My money is on out because of voter numbers bothering. Very strong No camp, everyone will ensure they vote. Who'll go first between LT and Skin is uncertain and may depend on the share price

[gerryjames] 07/6/2016 16:58

Absolutly Vike. Don't know if this has been posted before. A concise legal document highlighting tax, page 3 of 5. It all adds up. Any divi has 10% repatriation tax. 12.5% of gas produced, 30% corporation tax.

[ngms27] 07/6/2016 16:53

I agree entirely a 1 TCF find WOULD BE Company making. The question is will they:
a) Have the license renewed to allow them to drill
b) Have the monies available to drill

Both are currently subject to major doubt.

And folks thats why we are where we are.

[last throw] 07/6/2016 16:51

Edgar

FWIW, I am so old and lead such a miserable life that anything above 4p changes my life and, believe me, 4p is just about my average!

At 8p I'll be able to buy the best care in the world!!!!!!

By the by, a good definition of Brexit is not missing the last chance to jump from the Titanic into a well-provisioned liferaft!!!

Read this and weep .... or, be inspired - try about 7mins 20 secs in for a sampler:



Not that I'd be controversial eh?

LT

[vike1] 07/6/2016 16:15

Agree that it feels like a tide is turning. Albeit slowly. And fraught with risks, but not as many as there were this time last year. Is great to see tangible progress being made such as gas flowing and invoices issued.

[edgar222] 07/6/2016 16:05

Vike

Just have the feeling that everything is coming together and that the "mood" is turning.

Not very scientific I know.

I have topped up recently (twice) and I know others are doing the same.

Always said 8p changes my life but I can see that happening with KN1 being paid and Ntorya 2 and 3 being funded and ready to go. If they then find another 1TCF that's the big prize. What share price then??

[vike1] 07/6/2016 15:36

It sounds like you're not quite sure what an NAV is.

For an NPV I'd agree, which includes many assumptions, but NAV is pretty straightforward.

[ngms27] 07/6/2016 15:23

There is no such rubbish as trading at a discount to NAV in this sector. It's just a number analysts come up with to justify themselves. There are so many assumptions and intangibles in the calculations it simply isn't worth the paper it's written on.

Every small company in this sector tend to trade massively below brokers NAVs, I wonder why? Actually I don't.

[vike1] 07/6/2016 15:04

edgar222, many thanks for posting. Is a sound analysis.

Amazing how we're trading at a 70% discount even with all the good news flow coming through. Looking forward to getting the extension and financing resolved!

[obsignal] 07/6/2016 12:15

Skinwalker:

What is shti?

[warbaby43] 07/6/2016 12:13

Have often wondered what Detmer the Delusional might be doing these days - now I know.

[impvesta] 07/6/2016 11:57

Neil Ritson on Proactive Investors again:

hxxp://www.proactiveinvestors.co.uk/companies/stocktube/5115/solo-oil-expects-to-release-gas-to-national-pipeline-within-two-months-5115.html


and yesterday on brr:

[ngms27] 07/6/2016 10:58

Two points:

1) Income will be less that they suggest (loss of 15% of KN-1 and lower production than forcast
2) KN-1 production will keep the lights on but won't fund drilling or seismic that's planned

[888icb] 07/6/2016 10:31

What a splendid report from Shore giving a clear case for the share price to increase x3 to get towards its risked NAV per share of 4.8p. Just look at the income projections for this year and more particularly next year. I am well aware that there have been many false dawns for AEX but at this point its looking positive.

[ngms27] 07/6/2016 09:28

Did the BOD pay them for this report?

Makes no account for the loss of 15% of KN-1 or monies required to drill Ruvuma.

Not worth the paper it's written on other than to wipe ones backside.

[edgar222] 07/6/2016 09:28

.....continued.....


Resolution of the financing aspects (along with renegotiation of the Ruvuma licence commitments) will be priorities for Aminex, alleviating financing and tenure concerns and enabling the commencement of an active drilling programme.

Ahead of this, we have in fact upgraded our Risked NAV estimate to 4.8p/share (from 3.9p/share–see Fig.2). This reflects (in particular)
cancellation of the deal with Bowleven, which had envisaged a partial
disposal at Kiliwani North and farmout at Ruvuma.

However, a forward work programme could not be agreed with Bowleven
and Aminex is instead left with a larger interest in two high uality, advanced projects. Our Risked NAV estimate aims to capture the financing
requirements through its net debt assumption.

Given the progress made to date, we have confidence in management’s ability to resolve these outstanding matters.

The details of any financing solution have yet to emerge and our net debt assumptions (and assumed P&L interest expense) are perhaps rather notional ahead of confrmation of this. There are various moving parts in
our models and a farm-out, disposal or debt re-financing, for example, would all have different effects. It is difficult to make a firm assumption
but, ultimately, we believe that our Risked NAV estimate reflects the fair value of the asset base and funding requirement.

Aminex has already retired debt with partial disposals at Kiliwani North (to partner Solo Oil +)and operating cash flow will also be supportive
; a definitive financing solution on satisfactory terms (and subsequent commencement of drilling) could provide the catalyst for a narrowing
of the significant discount to Risked NAV, we believe.



ENDS

[edgar222] 07/6/2016 09:24

.....continued......


Re-entry of Ntorya-1 would offer the potential for early production via gas-to-power or compressed natural gas, and the new trans-national pipeline
passes through the acreage to provide a monetization route on a larger scale. However, Aminex is committed to drill four Ruvuma exploration
wells by the end of FY2016 and the commencement of drilling depends on Aminex
finding analternative to the cancelled Bowleven farm-in. Given Aminex’
s long standing positionin country, we fully expect successful extension or renegotiation of its licence commitments to enable appraisal and early development. We believe that Aminex
will be pursuing a variety of options to fund drilling and that, with well planning and tendering underway, resolution of this issue would provide a powerful springboard for growth.

Forecasts and valuation

Our updated FY2016 forecasts (see Fig. 3 and Fig. 4) reflect the timing of gas sales at Kiliwani North, where we anticipate the completion of commissioning and establishment of a commercial flow rate in mid-2016. We assume six months of production and an average daily flow rate of 20mmcfd to reflect ramp-up post-commissioning; Aminex will already have
been receiving some revenues from commissioning gas so we believe that this is a conservative approach. We are forecasting revenues of US$6.1m (compared to US$6.4m previously) and an adjusted net profit of US$0.5m
(compared to US$1.9m). Our newly introduced forecasts for FY2017 indicate a robust financial performance next year, when we forecast revenues of US$15.2m and an adjusted net profit of US$6.3m.
We expect gas sale s to translate into operating cash flow of US$1.9m
in FY2016, rising to a very healthy US$9.8m in FY2017. Our forecast capex for this year is US$18m, reflecting Aminex’s share of drilling and recompletion costs at Ruvuma. Aminex’s debt facility with
Argo falls due for repayment at the end of July 2016 (when it
estimates an outstanding balance of US$9.4m). Our forecasts
indicate net debt at the year-end of circa US$20m,so there is an implied
need to extend the Argo repayment date and secure additional financing.
However, Argo has demonstrated a past willingness to provide extensions and we understand that Aminex is pursuing a range of financing alternatives which could include a farm-out, disposals, new debt facilities and
the deferral of expenditures.

[edgar222] 07/6/2016 09:19

....continued....

[Cant cut and paste the table but 2017 has Turnover of $15.2 and profit of $6.3m]


Gamechanging Ruvuma potential

With commissioning gas now online at Kiliwani North, Aminex expects to book its first reserves in Tanzania this year and has agreed to complete commissioning and testing and move into commercial production at the end of June 2016 (with the achievement of an optimal flow rate expected by early July)

First gas from Kiliwani North was achieved in April 2016, marking Aminex’s transformation into a Tanzanian gas producer, and the company is guiding towards monthly net cash flow of circa US$1m once a commercial
flow rate is established.

Kiliwani North production is expected to ramp up to 25-30mmcfd and commissioning gas is already being paid for under the terms of the gas sales agreement (GSA) signed earlier this year

Production is sold at the wellhead and the GSA incorporates an initial gas price of US$3.07/mcf (with annual indexation).
On 6 th June 2016, Aminex released a very encouraging update on progress at Kiliwani North; commissioning of the power generation and other auxiliary facilities has been completed and commissioning of the gas plant and subsea pipeline commenced at the start of the month. Gas has now
entered the pipeline system connecting the Songo Songo plant with the national pipeline and TPDC has been invoiced for both April and May gas production, in accordance with the GSA terms. Aminex plans to conduct a well test during production build - up to determine the optimal flow rate for commercial production and, importantly, it is now expected that the well will be tested at closer to 30mmcfd (i.e.
at the upper end of the anticipated 25 - 30mmcfd range). So, with the
KN-1 well performing very satisfactorily and commissioning on schedule, we are highly encouraged by progress here.

Now that first gas has been achieved, we have incorporated netbacks
from Kiliwani North into our newly -introduced forecasts for FY2017. The field is a single well development but of strategic importance to Aminex, in our opinion, and we expect relatively material operating cash flows going forward. However, we continue to view Ruvuma as Aminex’s flagship asset
in Tanzania

Here, the Ntorya-1 well successfully tested gas at over 20mmcfd (with 139bbl
of associated condensate) in 2012. The company has since acquired 181km of 2D seismic data to further delineate the discovery and has selected drill locations over the key Ntorya, Namisange and Sudi prospects. Given the available seismic and well data, we believe that Aminex has developed a very high level of subsurface understanding at Ruvuma.

Ntorya-1 encountered 25 metres of gross pay, of which 3.5m was tested (giving a
flow rate exceeding 3,000boepd on an oil equivalent basis), and best estimate contingent resources of 70bcf are attributed to the discovery. Prospective resources totalling 1.1tcf of gas-in-place are estimated for the greater Ntorya
field in the Cretaceous , illustrating the size of the prize in a project where Aminex has a 75% operated interestand is targeting substantial sand thicknesses. A step -out appraisal well (Ntorya-2) is planned for FY2016 along with the Ntorya-3 exploration well and potential re-entry of Ntorya-1. Ntorya-2 is targeting the same reservoiras the discovery well and has an estimated 60% probability of success, while Ntorya-3 (30% PoS) will go up -dip to test the main Cretaceous channel fairway(in addition to a Tertiary objective interpreted to be an up -dip extension of the Likonde-1 well)
.

[edgar222] 07/6/2016 09:11

With thanks to James Ashton on Twitter, here is the Shore write up.

Aminex

Strong operating cash flow in FY2017

Our newly introduced forecasts for FY2017 indicate a robust performance
as Aminex reaps the benefits of its first full year of Tanzanian production and begins to generate meaningful operating cash flow. Our updated FY2016 estimates reflect the precise timing of Kiliwani North gas sales; we are highly encouraged by the latest update on
progress here and have upgraded our Risked NAV estimate to 4.8p/share (from 3.9p/share). This upgrade reflects accretion driven by cancellation of the Bowleven deal, which has left Aminex with a larger slice of the Kiliwani North and Ruvuma pies. Aminex is pursuing alternative solutions to facilitate its planned work programme at Ruvuma, which offers scope for early production. We have been impressed by the well invested management team’s restructuring of the business and expect operating cash flow to provide valuable support as Aminex works to fully unlock the value in its refocused portfolio.

Introducing forecasts for FY2017:
With commissioning gas on stream at Kiliwani North, the latest update provides strong visibility on well deliverability and imminent commercial
production; we are forecasting US$15m of revenues next
year. According to our forecasts, this will translate into FY2017
operating cash flow of US$10m, providing a valuable boost to Aminex’s financial position as it pursues solutions to commence appraisal and exploration drilling at Ruvuma.

Risked NAV of 4.8p/share:

Our Risked NAV estimate increases by over 20%, partly due to cancellation of the proposed deal with Bowleven earlier this year.
Our assessment at the time indicated some NAV dilution so noncompletion is accretive to our estimate. With our sum of the parts valuation dominated by the Ruvuma up dip prospects, we believe that the facilitation of drilling via an alternative structure could provide a strong foundation for outperformance.

Management continues to impress

In our opinion, management has done an excellent job, having achieved first gas at Kiliwani North and exited FY2015 with a relatively manageable net debt position of US$6.4m. We have confidence in Aminex’s ability t
o replace or extend the tenor of outstanding debt and facilitate
the commencement of drilling at Ruvuma, where we see considerable unrisked potential to complement the cash flow emerging from Kiliwani North.

[skinwalker] 07/6/2016 08:32

Blimey Obsignal ! Are you full of shti, or just nearly full?

[ngms27] 07/6/2016 08:29

Only two ;

[blackgold00] 07/6/2016 08:23

obsigna, all info is appreciated, stick around its not a bad board, but of course in all walks of life there is always the odd moron or two.

[bo42] 07/6/2016 07:51

Thanks Ob.
Now get lost!

[warbaby43] 07/6/2016 07:49

Going to need an awful lot of gas, and oil, that lot:



Post 55267 gives some background, but the implications for both Africa and the West of a sub-Saharan population explosion of 400m+ between 2015 and 2040, are quite frightening.

PS Probably not unconnected is this, but one can all too easily imagine the wolfish grins on the faces of the CCM comrades, their cronies and their Swiss bankers at the thought of $1.21bn up for loot:

[obsignal] 07/6/2016 00:44

Dear Jacks13:

How incredibly rude! And how appropriate that your handle should be demotic Dublinese for lavatory.

I did not expect that my offer to GIVE information would elicit a response DEMANDING same, as if of right.

Might I suggest that the old policy of seeking favour with honey rather than vinegar would be worth considering? Or perhaps such a genteel approach would be so foreign to your nature and your practise that you would not even consider it?

I had intended to share everything I learned with the people here. But if you are in any way representative of their number, I should perhaps be minded to think again.

Sincerely

Obsignal