Aminex Share Discussion Threads

[warbaby43] 27/6/2015 13:28

Thanks jacks, so we've got to get the Anniversary card bought, signed and posted by 28th August.

Meanwhile, back to the speculation on our out-of-left-field N-1 sidetrack, this is what what His Imminence told Miss Blondie:

"We've told the markets before that it (N-1) wasn't drilled in the optimal location for the cretaceous discovery that's been made. What we're planning now is to re-enter that well and halfway down kick off and move into an area which is further up-dip and chasing the same cretaceous play that was the discovery but this is just re-entering a well and instead of drilling a new well, we're utilising a wellbore to go in and develop that place, so it's quite a positive thing"

And to Mr Smoothie he described it as

"a cheaper option to go in and potentially get gas on stream a lot quicker"

But how a sidetrack can specifically help to achieve that without processing arrangements and a pipeline connection being in place I'm struggling to get to grips with, which has prompted this question in my mind.

Without a farmout, we know how much AEX and its shareholders have riding on Ntorya-2, especially as we approach the anniversary of Kea's fatal Pukka-3 appraisal dud, so the question I'm asking is whether the real purpose behind the sidetrack is to drill towards the N-2 target sands to seek to confirm that what they think is there really is there - a sort of appraisal of the appraisal well.

If that is indeed what it is, I will be mightily relieved at a reduction of risk but with the retention of that oh-so-valuable 75%.

Answers on a postcard please.

[jacks13] 27/6/2015 13:03

I've sold out of these now. I'd set myself a deadline to review things in late March, with in mind the signing or otherwise of a gas sales agreement as this obviously is pivotal to the financial health of the company. I let things slide for a while but decided finally to await any statement around the time of the recent AGM. As that proved negative I decided enough was enough. Had things unfolded to anything like the timetable the company was hoping for this I still believe would have been a very nice investment and I would have stayed with it.

There is a temptation to blame the board at least in part for the delay in the GSA but I think that would be unfair. What is making the delay painful is that it at best is eroding shareholder's stakes through debt, dilution and asset disposal and at worst threatens the viability of the company as a going concern.

The board, and I am obviously speaking with hindsight here, made a major mistake when they opted for debt over a new equity issue when they took out the Argo loan. Jay and Phil came after that and from my perspective have done little wrong. It's not their fault that the government have been slow to sign the agreement, they have done their part. Their interests are after all aligned with the PIs' and they stand to lose out too.

They are right to insist on payment protection but I don't think that is actually the only or even a major sticking point, there is a bigger picture for the government to manage. I don't think the TPDC and the government care much about the fate of the company. Aminex are maybe an irrelevance to them; the gas won't disappear if Aminex goes under and anyway wouldn't the partners step up to the plate in that event? I'm sure they would raise funds somehow to protect their investments in Kiliwani . The wider licensed resources outside of that would be forfeit if not wanted or not affordable.

Stripping away the emotional attachment to this investment and what you're left with is a company with no control over the key events that will decide its future well-being. It may survive as a going concern, and I think it probably will, but it won't now come through undamaged. A lot of the meat will likely have been stripped from the bones by the time future debt and dilution have kicked in. This may be being overly pessimistic, I hope it is. I'd like the company to prosper but as things currently stack up there is no compelling investment case here.

[jacks13] 27/6/2015 12:02

Two years by the end of August warbaby.

The History:

29 Aug 2013 - “Gas sales negotiations nearing conclusion”

31 Oct 2013 - “…..are at an advanced stage and expected to be concluded prior to year end.”

19 Nov 2013 - “..... largely negotiated and should be ready for signature shortly...”

9 Dec 2013 - “......has been submitted to the Tanzanian Petroleum Development Corporation for approval, which is expected to be received shortly.”

9 Jan 2014 - “.......largely completed and should be ready for signature shortly...”

19 May 2014 - “.....is largely negotiated, with no material issues remaining....”

28 Aug 2014 - “.....has been agreed with the TPDC with no material issues remaining and is currently being vetted by the Government prior to execution...”

23 Sep 2014 - “....the GSA is awaiting final completion and production is expected in H1 2015.”

12 Nov 2014 - “....a Gas Sales Agreement is largely complete for KNDL, with no further negotiations expected, and is currently awaiting final approval from TPDC and the Ministry of Energy.”

18 Nov 2014 - “.....A Gas Sales Agreement (“GSA”) with the Tanzania Petroleum Development Corporation (“TPDC”) is in final form and pending sign-off from the board of TPDC.”

...and from the 2014 Annual Report regarding the signing of a GSA:

Chairman’s Statement:
‘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.’

Chief Executive’s Review:
‘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.’

Financial Review:
1. ‘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.’

2. ‘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.’

[warbaby43] 27/6/2015 11:34

jacks13, while you're about - memory tells me that a few months back you did some research and posted the whole ghastly history of the GSA "promises"

Can you tell us from that research just how close we are to the second anniversary of that hare being set running.

[jacks13] 27/6/2015 10:39

Gerry - you seem a little harsh on our optimistic blogger. He seems eminently qualified.

[gerryjames] 27/6/2015 09:05

The poster anon portrays a notion the World Bank, just last week, is assisting with the mistrust over payment by injecting a 38 year 100m credit line is simply wrong. He describes it as a timely intervention to the impass over payment...lol convenient then.

"The series of policy-based budget support operations will focus specifically on education, water, and health"

Lifting the lives of the neglected populous and their basic human needs. Nothing to do with assisting private corporate profit to be redistributed among foreign investors...that's not in their mandate....never has been.

"A perfect investment horizon"...if it was Holland perhaps or if such a thing exists. A bit rampy and misleading this guy, imo.

PS Great sport next Tuesday when Sirius Minerals SXX is suspended first thing pending the Planning decision on it's potash mine...now that's a home grown one for the retirement pot, probably.

[greyingsurfer] 26/6/2015 18:09

Only last week the World Bank Group, approved a $100 finance package to help Tanzania increase transparency and accountability in governance and improve public financial management

Generous of them!

Good link, thanks.

Peter

[gerryjames] 26/6/2015 10:41

Good Luck Larsson.

[ngms27] 26/6/2015 09:42

The election is a smokescreen. The result of Octobers election is already known. The ruling party will remain in power with 95% of the public vote.

Next

[larsson 2] 26/6/2015 09:27

Well I have just listened to that ProActive interview: Starts of confidently but right at the end even the interviewer cannot hide her smirk when JB at the last breath of the interview spits out 60-90 days for the GSA. So it's definitely not mid 2015 but end of September.

JB is wise in insisting on the guarantee cover within the GSA but you can see this Government dragging its heels and not in any rush and with the election due that must have an influence one way or another. However the individual lender (refers to 'he' in the interview?)is supportive and probably will be for the forseable future. Nevertheless I am not sure the GSA will ever be signed now and so I have sold up. Good luck the long suffering AEX holders Ive been here for 4 years and just had enough so taken a hit but can always return as the share price is bound to rise on rumour before D-day if it ever happens.

[jacks13] 26/6/2015 08:52

greyingsurfer - Aminex are caught between an expensive debt and a customer in no hurry to buy their goods. In the meantime they have costs and commitments to meet. It's all well and good to point to the government's incentives to get a move on but it seems to me that the company's needs are the more pressing. The gas will be in the ground available for extraction with or without Aminex's assistance as will the resources elsewhere.

[skinwalker] 25/6/2015 19:38

Gerry
I did seriously consider buying 95% of the shares, but then thought better of it. Opened another bottle of Bollinger and watched the ships pass through the Strait.
You've got to be MAD to invest here. MAD!
This is, and always has been, going nowhere. Sad but true. A dead duck! Shame.

[greyingsurfer] 25/6/2015 18:54

edit: the interviewer is either exceptionally well informed and brilliant at her job or she has an inside track by virtue of being a shareholder as someone earlier commented; perhaps both. I noticed she drew attention to the fact that the government appear to hold all the cards which Jay was allowed to bat away.

Not clear on what basis you think the Proactive interviewer was "well informed and brilliant"! She kept stating the cash was for "drilling", when it clearly never was, then talked about the "side track thingy - what's that"

Not sure why either it was clever to draw attention to the govt holding a lot of the cards - since everyone knew that anyway, and Jay said so in the interview.

It's not, of course, true either that they hold all the cards, as the much better IG interview makes clear, and I and others have repeatedly said on this and other boards. The Tanzanian govt has invested a large fortune in creating a gas supply infrastructure, has a desperate, and growing need for gas and has an election coming up in Oct. Do you really think that they can afford to fail to get the GSAs and guarantees sorted by the time the pipeline is commissioned, to sit on their hands while paying off the loans, with no revenue coming in, and an increasingly angry energy starved electorate about to go to the polls?

Peter

[edgar222] 25/6/2015 18:39

Listening to Jay B it seems clear that its Aminex that are holding up the GSA for the payment protection terms.

If so, I applaud them.

Totally necessary given the payment history we know about in Tz with others.

[jacks13] 25/6/2015 17:43

Didn't, once upon a time, Jay say that no gsa then no gas for testing? Aminex have however now softened that stance as I recall.

edit: the interviewer is either exceptionally well informed and brilliant at her job or she has an inside track by virtue of being a shareholder as someone earlier commented; perhaps both. I noticed she drew attention to the fact that the government appear to hold all the cards which Jay was allowed to bat away.

[vike1] 25/6/2015 17:06

Interesting too that in the IG interview he was asked who took up the equity issue and he responded more detail on that would come out shortly.

[blackgold00] 25/6/2015 16:13

JB says in interview, the Tanzi government will want gas feeding into pipe-line no later than Sept so they can campaign in the Oct elections with gas being delivered into the new pipe-line, or something like that. So GSA by Sept.

[whoppy] 25/6/2015 15:59

I think the Tanzania government would see any payment protection as protecting them from not having to pay and leave it up to someone else who is offering the protection. This GSA is all a nonsense. The government won't sign it. No ones going to offer protection. It's like getting Greece to say they will offer payment protection to it's lenders on it's debts.

[lfdkmp] 25/6/2015 15:55

Years ago I used to work in export finance. The medium of payment was often through future dated bills of exchange. There was always a risk that these bills would not be honoured on the due date. There were generally two forms of payment guarantee/insurance.

1) ECGD cover
and/or
2) "Confirmation" ie guarantee (including commercial and sovereign risk) of the bill of exchange by a financial institution of good standing.

1) above probably isn't applicable in this situation, but 2) maybe?

[ngms27] 25/6/2015 15:50

Plus have to keep greasing the palms...

[bigsi2] 25/6/2015 15:50

Invest in Africa and you'll need patience