Aminex Share Discussion Threads

[greyingsurfer] 23/11/2015 09:16

Hi WB

I said:

then AEX has to cover 37.5% of that - $13.5M. Then take off the free carry, $10m (BLVN doesn't get to free carry its own costs), leaving $4.5m.

You said:
Quite right about BLVN and free costs but shouldn't the deduction for AEX be $7.5m (75% share of the $10m)

Yes, you are correct - I was overlooking the fact that the carry was for 50% of both AEX and SOLO's holdings, so $7.5m covers AEX's costs on their remaining 37.5%, and the rest is passed on to cover Solo's 12.5% share of costs, and WI.

You were too kind to point out that I'd also managed to subtract 10 from 13.5 and got 4.5. So the difference in the answers is smaller than it might have been!

Peter

[jacks13] 23/11/2015 09:13

A virulent blvn strain has now been found in the wild, skin. Sufferers have been seen stumbling into Sofa World!

[impvesta] 23/11/2015 09:05

I knew we could rely on you to keep the unfaith skin!

[skinwalker] 23/11/2015 08:59

Warning!
Demented AS and AS2 sufferers on the loose :-)

[impvesta] 23/11/2015 08:07

Steady lads......there's a real danger of Impvesta type optimism breaking out here!! :-)

[blackgold00] 23/11/2015 08:02

now you're seeing it warbaby. N-3 is going to be a very exiting well if it is indeed drilling the larger up-dip Notrya, and I should think that TPDC would want that proved up as a matter of priority, so they can then plan and expand their industrial development

[warbaby43] 23/11/2015 07:47

greyingsurfer @ 54775, back to the matter of the arithmetic and mode of calculation - "Then take of the free carry, $10m (BLVN doesn't get to free carry its own costs), leaving $4.5m." Quite right about BLVN and free costs but shouldn't the deduction for AEX be $7.5m (75% share of the $10m) leaving around $6m from my very rough guestimate of $36m for a four well programme. More importantly, if that $36m is anywhere close to realistic then I would agree that an AEX commitment of around that $6m should certainly be "doable."

Overall, having looked back over the posts of the last few days, my initial misgivings over the deal have largely dissipated and I would agree with the conclusion drawn by yourself and others that Aminex is now in a far better and much lower risk position than it was a week ago. Additionally, should the first two wells N-2 and N-3 be successful and TPDC indicate a path to production, that would be truly transformative and greatly facilitate future financing.

[gerryjames] 23/11/2015 07:45

"At 487.3 million barrels, U.S. crude oil inventories remain near levels not seen for this time of the year in at least the last 80 years," said the official report."

This is proving a bitter battle. How far and long can OPEC go to maintain market dominance.

[haggismchaggis] 22/11/2015 19:14

Fertilizer plants use natural gas as the feedstock, converting the gas into ammonia or urea and from that into Fertilizer. The limit of how much gas they consume is defined by the size of the plant. A $1Bn plant is going to be huge and use up a lot of gas.http://naturalgasnow.org/fertilizer-made-natural-gas-lifting-world/

[greyingsurfer] 22/11/2015 17:48

Nice find, WB

[greyingsurfer] 22/11/2015 16:30

Why are we doing calculations on the cost of four wells?

Clearly we don't know at the moment what the drilling program will be, and quite possibly the company doesn't yet either.

However, we do know that they need to drill 4 wells in 2016 to satisfy obligations, and that drilling 4 wells in one go is going to be a lot faster and cheaper than doing 2+2. So though there may be advantages in drilling 2, and recompleting 1, then reanalysing and planning the last 2, it may also make a lot more sense to do 4 at once. We will see on the program is made public.

The point is that the company probably is now in a position to drill a 4 well program without needing extra funding (the BLVN carry is for use on the whole of Ruvuma, not just restricted to the Ntorya wells), or possibly a smallish financing raise. So the option exists, which it certainly didn't a week ago.

Peter

[warbaby43] 22/11/2015 16:11

With regard to prospective local markets for Ruvuma gas and the proposed Mtwara fertiliser plant, what has surprised me is the amount of gas such a plant can require. Looking at Bowleven and their Etinde asset:

"It is envisaged that the Ferrostaal-led fertiliser scheme will be the first of a series of gas offtakers for the Etinde acreage. Negotiations to finalise the gas sales agreement (GSA) are at an advanced stage. Under the terms of the draft GSA the Etinde group will supply 70 mmscfd of dry gas to the plant for a 20 year period representing a committed total gas volume of approximately 500 bcf and expected liquids production of approximately 100 mmboe"

[blackgold00] 22/11/2015 16:00

I wonder what the drilling commitments are for Ophir and their East Pande block, and whether RAK GAS still plan to hold their 30% interest.



"Ophir has a 70% operated interest in the East Pande licences with Ras Al Khaimah Gas Company (RAK Gas), holding the remaining 30% stake"

[warbaby43] 22/11/2015 14:33

greyingsurfer, I take your point regarding my error on the arithmetic and mode of calculation. However, with a single well pre price drop being c$12-15m, my rough guestimate of $36m does take back-to-backing and the advantageous rig market into account as well as their claim that they do already have a substantial amount of drilling equipment on site. Much less than $36m would be a real bonus.

One point, however, in this regard is that there does not appear to be any clear indication in the RNS that N-2 and N-3 (the biggie) are going to be back-to-back, hopefully they are and this will be confirmed following completion of the tendering process which must by now be well advanced.

With regard to timing, interesting to note from the IG Mr Smoothie video that the drilling has now gone out from late 2015, to early 2016, to sometime in H2 2016 and possibly back end of Q1 2016. Hopefully, just hopefully, that means sometime before the end of next year.

As far as TPDC's back in rights go - "Under the terms of the Ruvuma PSA, after the grant of a development plan, TPDC may elect to contribute a participating interest of 15 per cent. of costs, excluding exploration costs in order to obtain a participating interest of 15 per cent. in production and revenues."

Meanwhile, I am looking forward to the Circular which will have to bring us up to date on a number of factual matters, not least the state of play with the licences.

[vike1] 22/11/2015 13:38

When thinking of the 'free' present from Tullow, also remember the c.$8m(?) we paid to re-run the Ruvuma seismic. That should be subtracted from our net gain. I'm not opposed to the deal, but considering the size of KN1 we sold (which will pay for itself quickly), we sold for near net $0... but did attract a new dance partner.

[blackgold00] 22/11/2015 12:32

yes Gerry, as far as the market is concerned there is at the moment still a question mark hanging over Tanzania. hopefully a few more RNS like Wentworths first payment and perceptions could change.

[gerryjames] 22/11/2015 12:21

And the whole sector is bombed out and abandoned. As we know, unfortunately.

[gerryjames] 22/11/2015 12:17

BECAUSE Tanzania is not trusted, you're not doing business with the Dutch. This will take a while to fix. Track records of payments and development. And for that reason it still holds an attraction going forward for early players, who are still in business, if they do it right.

[dan_the_epic] 22/11/2015 12:03

Same old stuff from those with rose-tinted specs on. My posts seem to have garnered more agreements than yours.

I come back to the really simple point. If this is such a great deal, then why, on large volume, has the share price barely moved and the market thoroughly unimpressed?

[rich2006] 22/11/2015 11:58

Haggismchaggis
Spot on.
Obviously Dan is trying to create doubt to assist with his short on AEX.
Hopefully the 2 drills can be done early 2016. Then we could have an option for a further 2 drills late 2016 after they have had time to analyse the results and add them to the seismic data.

[blackgold00] 22/11/2015 11:55

haggismchaggis, its just that at the moment we still have a PSA commitment to drill 4 wells by end of 2016. though I am confident JB will negotiate a suitable outcome.
IMS
"While there are further exploration drilling commitments required by December 2016 in addition to the current drilling plans, Aminex is currently in discussions with the TPDC to facilitate and accelerate the development of Ntorya and meet the remaining obligations."

[greyingsurfer] 22/11/2015 11:44

To be fair it cost the extra drilling costs at Ntorya1 and the new seismics which AEX and solo funded.

Well, yes, you're right of course, but it sounds better the way I put it :-)

I do agree with both yourself and bunbooster 2 that it is a good deal and that AEX would not be able to fund 75% of the work program without substantial dilution. For me it is all about risk and AEX have reduced their risk, no drilling is guaranteed to give positive results although appraisal drilling is less risky and the extra seismics has reduced the risk.

I agree there. I argued some time ago (probably a couple of years now, time seems to move on!) that I'd prefer a farmout rather than trying to go it alone. I know many disagreed at the time, but I'm happy that the deal involves a farmout.

Peter