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I believe the news SCIR selling some or all of HE1 and their RNS re investment facility surely highlights that they are putting funds in place ready for first payment for CH1 3D and drill pad prep, so probably no sale agreed as yet then!
It would be good to hear what is going on but I feel the 3D and drilling must still going to plan. I guess you can tell by AEX silence they are not attempting to raise funds as they would be pushing the news flow to attempt to boost the price - slowly, slowly it is then I guess. They must have a plan for the ongoing cash flow situation as companies don't usually like to leave these things down the wire!
This is where the patient hopefully make their money, just how much more patience is still required is the big question
I am not suggesting SCIR can't pay CP; simply responding to BG's point about their, maybe, choosing not to pay......
GLA
I am delighted for SCIR that they are doing well with HE1. I also hope they can hang in there and make some money with AEX and APT. They have been loyal partners to AEX and helped us emormously in the dark days with actual cash injection.
Fwiw, I do not believe comparisons of share price between the two companies are particularly helpful. They just underline that the market is consistently not putting much value on our gas in Ruvuma. But we know that! The Helium story is hot at the moment. It is blue sky potential for SCIR. But it does not assist with valuation for AEX. IMHO.
though the resent rise in HE1 has been an God send for SCIR, which i'm sure are taking full advantage of.
SCIR already have the cash or near term equivalents for the 2021 budget, their HE1 shares they have been selling were worth more than the 2021 budget alone, never mind the Loan facility they also have available.
If Scir don't pay they concede their 25% interest - I don't think APT will be too worried BG do you?
no, i dont think APT would be to worried though i'm not so sure about SCIR share holders, and the fact remains they will be receiving Cash Calls, and in my mind soon if not already, from the $18 million 3D seismic costs over the coming months. i think one way or another news will be arriving over the coming weeks.
If Scir don't pay they concede their 25% interest - I don't think APT will be too worried BG do you?
You reference the JOA - so please point to the section that references "cash calls".
And there will be no cash calls for AEX - APT holds the purse strings.
Crusty "I am sure you are correct PoC but I would also expect that to be done in after the event and probably at the end of an agreed accounting period. Many have commented here on innumerable occasions that exploration bills are usually charged in arrears and not in advance."
Crusty, Cash Calls are made monthly and in advance, it absurd to think that ARA would take all the financial risk, of say drilling CH-1 ($20 million) and SCIR doesn't get billed until completed, what would happen if it was a dud, and SCIR decided not to pay? no its done in advance according to the JOA.
https://www.lawinsider.com/clause/cash-calls
"Cash Calls. On the basis of each adopted Program and Budget, the Manager shall submit prior to the last day of each month a billing for estimated cash requirements for the next month. Within 10 days after receipt of each billing, or a billing made pursuant to Section 9.7 or 16.4, each JV Participant shall advance its proportionate share of such cash requirements. The Manager shall record all funds received in the Business Account. The Manager shall at all times maintain a cash balance approximately equal to the rate of disbursement for up to 60 days."
"Cash Calls. On the basis of the adopted Program and Budget, the Operator shall submit to each Participant prior to commencing the Program, a billing for estimated cash requirements for the Program. Within 10 days after receipt of each billing, each Participant shall advance to the Operator its proportionate share of the estimated amount. Time is of the essence of payment of such billings. The Operator shall at all times maintain a cash balance sufficient to meet disbursement obligations for up to 21 days. All funds in excess of immediate cash requirements shall be invested in interest-bearing accounts with the Royal Bank of Canada, for the benefit of the Joint Account."
For licences to be extended APT will have to demonstrate it's commitment to it's obligations of the work programme, which means executing in a timely manner. APT can't just sit around waiting for licence extensions without doing nothing. They have to execute as per the terms of the licence of risk not fulfilling obligations. Obviously Aminex will be kept up to date on the progress APT is making. Certainly, Aminex will be having meetings with APT to discuss the work programme, costs and timings.
Expectations of future costs and timescales are one thing - the reality could be totally different Aimster.
What happens to those costs and timescales if the license extension takes months to arrive and if APT decide to defer 3D seismics (and other long lead items) until it comes through? What happens to those timescale and expectations? What happens to the Jan Spud date? What is there to inform the JV partners of? What expenditure? There will be nothing to report!
A news drought.
Sorry PoC, I missed your question: "Crustypete, Surely if APT are spending money on the work programme or awarding contracts they need to let Aminex know to account for costs as part of the farmout. "
I am sure you are correct PoC but I would also expect that to be done in after the event and probably at the end of an agreed accounting period. Many have commented here on innumerable occasions that exploration bills are usually charged in arrears and not in advance. Add that to the fact that they will not be coming to AEX for cash so they are far more likely to be informing AEX of how they have spent AEX's "carry" and not how they WILL be spending it. Accounts are retrospective, statements of past expenditure and income after all.
SCIR will expect a full breakdown of costs and timescales. That’s why they specified CH1 spud date as January 2022.
They certainly will CP; of that there is no doubt ;-)
H2 already? Yes indeed the year is passing far too quickly for my liking - before we get any warm weather we will be staring at the evenings already getting shorter!!
They will need to inform SCIR when they have a cash call. Interestingly SCIR have been converting assets to cash either due to a cash call or at least in preparation.
H2 not far off now.
They have no more obligation to SCIR than they do to to AEX.... of course as JV partners you would expect them to be informed but there is no guarantee nor obligation on APT's part to do so. Former shareholders of Scirocco will attest when NR ran the company ( as Solo) and when AEX were the operator (another listed company) and even then they were often kept in the dark until AEX were obliged to inform the market; only then were Solo updated. APT on the other hand have no obligation to inform the market and the JV partners will be totally reliant on APT on if and when they are kept up to date.
If APT are under no obligation to inform AEX on progress and costs, they definitely are with Scirocco Energy, who in turn would inform the market.
A test of how business friendly and flexible the Tanz gov are now, will be seen with HE1.
If HE1 can work well with the Tanz gov then so can APT/AEX/SCIR.
HE1 extended their 2D seismic campaign from 150km to 200km (now completed).
Found a better target site to drill.
So have revised the drill start date from mid May to early June.
They have revised the work plan to construct a different road and drill pad construction at the new site.
All of these changes (seismic, road, drill pad site, drilling new well) require some kind of permit/approval from Tanz gov.
Will it all proceed as smoothly as HE1's CEO thinks?
"..Relocating our first well to Tai will necessitate approximately two weeks of additional time required to upgrade existing tracks, construct a drill pad, and receive all necessary regulatory permits to commence drilling at this new location..."
"even if APT are doling out contracts for the work programme with or without a License extension they are under no obligation to make it known to the AEX shareholders".
Crustypete, Surely if APT are spending money on the work programme or awarding contracts they need to let Aminex know to account for costs as part of the farmout.
You forgot the receivables and mergers that are all on their way. Check out the telegram group if you fancy a chuckle. Not sure why BG posts as Mandy.
"Adding time again"? Really MD? If we were to get some short term news then you are likely to be right; there again, if we are about to enter another news drought then maybe not. During periods of no news this share price always drifts lower.
"Yes" I hear you bleat "but we will soon be hearing about a license extension, about continuation of the work programme, of contracts for drilling, of ......"
But none of those are within the Aminex Board's gift, MD. License extension is down to Tanzanian Authorities (who are up to their necks in Covid now that they have finally admitted it actually exists) and even if APT are doling out contracts for the work programme with or without a License extension they are under no obligation to make it known to the AEX shareholders.
Of course it would be great to get some material news but I certainly won't be expecting it; that would confound the lessons of history.
GLA
Adding time again
The current market cap here is below the level of the free carry from ARA so AEX's $500 million share of the gas reserves is for free. There is 3d mapping this Summer and drills to follow, I am happy this share will increase significantly over the mid term. Certainly compared to the wider energy market I think way undervalued.
Not only resource upgrade but can increase CoS and also, more leads. My understanding is that 3D seismic is primarily for the development stage (production) for FDP submission.
agreed boom.boom.
I have compltly derisked my share in HE1 - the way i see it is HE1 is like a covid share.
AEX- although taking its time will come good. I am hoping for some good news... most likely the 3D result- can you imagine another resource upgrade? ;-)
There is no comparison between AEX and HE1.
HE1 is purely speculative and hyped share, and over £100m market valuation is insane. If something goes wrong in the drill, the market will be brutal. I hope, many will de-risk their investment and make money from HE1,
On the other side, having big discoveries, proven gas resources the AEX is undervalued with a market cap of only £29m; but it will rerate soon once news comes out, about license extension and commencement of 3D and drill prep