The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Why? His opinion is worth no more than anyone else's, on top of which, you can read the statement from the Deputy Prime Minister and Minister Of Energy and easily come to your own conclusion based on the facts, you don't need anyone's OPINION, not even mine.
I am keenly waiting to hear Crusty about this
Desperate Hams intellect is not looking so clever having been ripped apart by a proper accountant 😂😂🤣
Yes BG - it's called intellect.
BG I believe the budget was approved at government level this time last year
Lol, no friends rojo likes to hurt himself, he must have some sort of condition.
Prosciutto wants to convince you that Aminex will get no revenues for condensate. For example Prosciutto has said:
"TPDC owns the 'Condensate'. Orca Energy Group and M&P/WEN can attest to that" and...
"Please provide evidence that the proceeds of any 'condensate' is forwarded to Aminex. Orca Energy Group / M&P produce volumes of condensate and ALL of the proceeds go to TPDC.."
What you need to know...
From ARA Petroleum’s “Revised Resource Potential – Post 3D Seismic” presentation from Feb 2024:
P.3 - “A seismic inversion, performed by Ikon Geoscience, calibrated to the existing wells and the new Ruvuma 3D seismic dataset, focused on further derisking the lateral continuity of the main Ntorya reservoir. Static geomodelling based on the Ikon inversion has resulted in the definition of a higher confidence discovery outline area extending to an area of ca 75km². This area now yields a revised and matured “Development Pending” unaudited Contingent Resource estimate of 3.45 TCF Gas Initially In Place (GIIP) WITH ASSOCIATED RECOVERABLE CONDENSATE OF CA 20 MMbbls.”
P.17 - “in a success case, SIGNIFICANT VOLUMES OF ASSOCIATED CONDENSATE ARE EXPECTED TO BE PRODUCED based on the results of Ntorya-1 and Ntorya-2 as shown in Table 1. WITH EXPECTED LOW PROCESSING COSTS AND AVAILABLE EXISTING MARKETS, THE CONDENSATE COULD PROVIDE A LOW-COST, HIGH MARGIN SUPPLEMENTARY REVENUE STREAM FOR THE PROJECT.”
So, evidence enough then that:
a) they have confirmed they expect around 20 MMbbls of condensate – and that’s just for the NT1 & NT2 area
b) they have put in writing that they expect this to be a profitable additional revenue stream
Please DYOR people and do not be hoodwinked by our resident troll(s)!
Try not to fight it. It won't hurt as much ;-)
Yeah,yeah, yeah...
Meanwhile the SP is languishing...
If any of what you post is certain, the SP would be flying. It's NOT.
One of Prosciutto’s favourite slogans "Encourage the takeover of Aminex.. Be happy with a 30% premium to market and hope to hell the takeover will secure regulatory approval".
Completely ridiculous!
As mentioned before, recent reports from Aminex’s company stockbroker value the company at 4 to 6 times the share price at the time of the report (1.03p) if the 3D seismic were to confirm 2tcf of gas and depending on scenarios regarding rates of production.
Obviously, the 3D seismic has identified likely gas in place of 3.45tcf for NT1 & NT2, potentially another 4.5tcf associated with CH1 and perhaps as much as 16.38tcf across the license area.
As I have posted previously, you can easily extrapolate out from Shard Capital's figures and work out equivalent figures for 3.45 and 7.95tcf.
In summary, the 3.45tcf for NT1 & NT2 may justify a valuation of between 7.2p and 10.66p per share. If CH1 brings us to 7.95tcf, that would increase that to between 16.38p and 25.57p per share. Ranges depending upon production rates. Those figures are unrisked.
Another related wheeze of Prosciutto’s is try to convince people that ARA is conspiring for Aminex to be sold to TPDC in a fire sale!
This makes no sense whatsoever. At the last AGM, the Board that Aminex gives ARA options for monetisation of Ruvuma.
ARA owns nearly 30% of Aminex. If/when the share price reaches several times current levels, the value of their stake in Aminex would give them back all the money then need to spend on full field development and more.
ARA could have let Aminex fail back in the dark days of the previous Tanzanian government and whilst everything was on hold. Instead, they propped us up with loans.
If ARA and the Aminex BOD wanted Aminex to fail or wanted to engineer the company being bought out on the cheap...
Why the loans to keep Aminex going?
Why do a raise last year to cover costs until production?
Why the more fulsome and positive updates over the last year or so – particularly the very positive 3D seismic results?
Why hire a new PR firm in Feb to get the word out about Aminex (new website already, the X / Twitter account is getting a workout too)?
Simple answer – you wouldn’t do those things unless you wanted Aminex to prosper and increase in value.
Our resident troll(s) want to subdue sentiment but, in the end, the value will out. The license secures the asset. Opportunity to buy in at these low levels may be running out IMHO. DYOR and good luck to all genuine investors here.
The Deputy Prime Minister and Minister of Energy said the license had been granted.
What does granted mean? To me it means signed off by those at the top of the Tanzania Government.
Once signed off it still has to go through government procedure the issue the license to ARA. This is what we are waiting for, nothing more.
Nothing is misinterpreted in this statement that's been published on several websites including a version they translated into English that says the same thing.
"In the small natural gas sector, he said, effective management is underway where, under the Sixth Phase Government, it has been granted a licence for the extraction of natural gas at the Ntorya well in the Mtwara region, with the last licence being issued in 2006."
The pertinent words being 'HE SAID', which means it is quoted directly from his speech at the Energy Convention.
https://youtu.be/-McXXaPA_60?si=XXNVYb2jDK7AygH9
What say I about what or whom Mrs Gaslady?
I wonder if it's the Ministry of Energy's budget that will provides for the Ntorya pipeline to the processing plant, or whether it comes from the TPDC own budget. ?
Prosciutto likes to cast doubt on Aminex’s future profitability - drawing misleading parallels between Aminex and Orca:
Prosciutto: “Aminex has a 25% interest in Ruvuma so Ruvima would need to produce 487.2 MMscf/d to equate to Orca's 121.8 MMscf/d. Orca Energy Group lost ($0.02/sh) in Q4 and the foreign exchange reserve deficiency was a contributing factor”…“If Orca Energy Group is unable to generate a profit, it raises the question of how Aminex could possibly be expected to do so. Why proceed with a business plan if it is destined for a loss?”
What you need to know:
Orca End of Year Results of 04 Apr 2024: “Total gross conventional natural gas production, including fuel gas, was in line with revised forecasts and averaged 121.8 MMcfd for Q4 2023, OF WHICH 80.8 MMcfd WAS ADDITIONAL GAS.
They only get revenues on the ‘Additional Gas’. The 121.8 MMcfd is a GROSS figure (INCLUDING AMOUNTS BELONGING TO TPDC AND FOR WHICH ORCA RECEIVES NO REVENUES). Using the 121.8 MMcfd is therefore an unfair comparison (and before anyone says it, there is nothing to say they will be able to sell TPDC’s ‘protected’ gas when agreements expire in July).
So, the gas volumes attributable to Orca are about 35% lower than Prosciutto is suggesting.
Then let’s look at that loss of $0.02 per share. Firstly, that is for Q4 of 2023 only. Looking at 2023 as a whole, they had net income attributable to shareholders of over $7million, which equated to A PROFIT of $0.35/share.
SO, THEY DID MAKE A PROFIT FOR THE YEAR. It was however considerably down compared to 2022 ($27.3million). The report explains this:
“Net income attributable to shareholders decreased by 75% for the year ended December 31, 2023 compared to the same prior year period, primarily as a result of the decreased revenue, increased depletion expense, including a one-time accelerated depletion charge in Q4 2023 with respect to costs previously incurred in relation to the 3D seismic acquisition and processing program, and higher net foreign exchange loss”.
More on the fall in revenues…
“Gas deliveries decreased by 15% for Q4 2023 and by 1% for the year ended December 31, 2023 compared to the same prior year periods. The decrease for Q4 2023 was primarily due to declining production from the currently producing wells and reservoir compartments in the Songo Songo field.”
“Revenue decreased by 23% for Q4 2023 and by 7% for the year ended December 31, 2023 over the comparable prior year periods”… “The decrease for the year ended December 31, 2023 over the comparable prior year period is primarily a result of higher TPDC share of revenue as an outcome of decreased capital expenditures and lower Cost Gas revenue”
How ‘Cost Gas’ revenue works…
“75% of the gross field revenues derived from the Discovery Blocks, less processing and pipeline tariffs and direct sales taxes in any year (“field net revenue”), can be used to recover p
More on that depletion charge…
“The depletion charge for natural gas interests increased by 52% for Q4 2023 and by 43% for the year ended December 31, 2023 over the comparable prior year periods. The increases were mainly due to a reduction in estimated proved reserves. Additionally, during Q4 2023 accelerated depletion totalling $7.0 million was recognized on engineering, acquisition, processing and associated costs related to the 3D seismic acquisition and processing program which will not be pursued in the absence of a license extension”
In summary then, because their license is about to run out and they have no clarity regarding if/when it will be extended, they have put most of their planned capital expenditure on hold. That meant they had fewer costs to recover as Cost Gas, significantly reducing revenues to Orca. Compounded by lower production in Q4. Profitability was then further impacted by greatly increased depletion charges resulting from a reduction in estimated proven reserves and $7m of costs for the terminated 3D seismic programme.
So, Prosciutto has given misleading and inflated comparisons of production rates – by including volumes produced for TPDC and for which Orca does not profit from under terms of contract.
Prosciutto then tried to make it appear as though Orca was making a loss on those inflated production volumes – saying, what hope then for Aminex! The reality being that Orca is profit making. However, their profitability has decreased sharply due to factors that are very specific to Orca’s circumstances and not relevant to Aminex.
ORCA - Cancelling almost all capital expenditure because their license is due to expire in 3 months and very, very little progress has been made on that.
AMINEX – Full Field Development Plan approved, Gas Sales Agreement approved, 25yr Development License either 1 step from approval or fully approved – this will unlock more than $100m of expenditure by the joint venture partners (Aminex fully carried for our share)
ORCA – reporting “a reduction in estimated proved reserves”
AMINEX – From end of Feb 2024 RNS “Operator's geomodelling significantly increases Ntorya GIIP to 3.45 Tcf” and “3D seismic reveals considerable upside for Mtwara Licence with total unrisked GIIP of 16.38 Tcf”…and “RPS has been engaged to undertake a revision of their 2018 CPR…with the aim of defining preliminary 1P and 2P reserve estimates. These reserve estimates are expected to increase substantially as phased development and project maturation progresses”
Very, very different circumstances then. Remember, as outlined by Shard Capital, Aminex is forecast to be very profitable indeed.
Don’t forget the $110m in unused tax loses and the $90m loan to Ndovu which together, as confirmed by the Board at the AGM will allow Aminex to have a number of extraordinarily profitable years once in production.
DYOR and you will see that Aminex is significa
Prosciutto likes to try to worry people about availability of US dollars in Tanzania.
Prosciutto's recent quote from Orca report, hoping to worry Aminex shareholders:
"There is a risk that the Company may not be able to convert Tanzanian shillings to hard currencies, such as US dollars, in the future as and when required. It is not known when the foreign exchange reserve deficiency in Tanzania will be remedied, if ever." 1. 2023 Orca Energy Group Annual Report
What you need to know:
On 01st March 2024, Tanzania’s Minister for Finance, Mwigulu Nchemba was quoted as saying that he is confident that the supply of dollars in Tanzania will stabilise once mega projects are operational, easing the pressure of importing necessary equipment.
He said “Once these projects conclude, the scarcity of dollars will be history. We are also focused on enhancing crop production and expanding the value chain to facilitate the sale of more products abroad, thereby increasing the availability of dollars”
Then, on 15th April 2024, The Citizen news outlet reported that “The government is optimistic that the dollar crisis will start to ease from next month when the high tourism season begins. The situation will improve further, courtesy of a projected rise in exports of traditional crops and an increase in gold prices, according to the Bank of Tanzania (BoT)”
If you want a bit more detail, the article continued:
“Tanzania earned $1.3 billion from tourism in 2021, but receipts soared to $2.5 billion and $3.4 billion in 2022 and 2023, respectively. Gold brought in $2.7 billion, $2.8 billion and $3.06 billion in 2021, 2022 and 2023, respectively. With projections pointing to a further rise in tourist arrivals and gold prices, BoT is optimistic that foreign exchange challenges the country has faced in recent months will soon be history. "We anticipate a surge in revenue from tourism beginning this May, coupled with exports of traditional crops such as cotton, sesame and others"
and...
“The government has implemented multifaceted strategies to address the foreign exchange crisis, including reducing dependence on dollar imports for commodities that could be locally produced, such as palm oil and sunflower oil. This involved developing improved seed varieties to reduce cooking oil imports. Additionally, the government waived taxes on solar products to lower import costs, aiming to reduce dependence on the dollars and alleviate its shortage. Reports also listed proactive government measures taken in the previous year, including providing export credit guarantee schemes and supporting local businesses to boost exports”.
So, lots of action has been taken and the situation is fast improving – with data to back that up and assurances from the Bank of Tanzania themselves.
In summary then, the evidence suggests that this is an ever-diminishing risk, and soon to be a non-issue. Beware the scare-mongering troll(s) and, as ever, DYO
▪️BUDGET MINISTRY 2024/2025 LANDS IN PARLIAMENT
Deputy Prime Minister and Minister of Energy. Dr. Doto Biteko (Mb), today April 24, 2024 presenting to parliament the Energy Ministry's Revenue and Spending Estimates for the 2024/25 Financial Year at the Fifteenth Session of the Thirteenth Session.
During the presentation, various officials and guests of the Ministry were invited to testify.
Prosciutto is always banging on about negative working capital. Saying a raise will be needed and that Aminex's financial situation is precarious.
As detailed in Aminex’s 2023 Half-Yearly Financial Report (issued 29th Sept 2023) the company had:
Current assets: $6.598m
Current liabilities: $10.206m
Difference: -$3.608m
So, it is true that there was negative working capital. However, the situation is explained in the Annual Report (of 28th April 2023):
P.5 – “A number of claims have been received from Tanzanian tax authorities. Provision has been made for all amounts either ceded by Ndovu Resources Limited or where management determine the likelihood of success through the objection or appeals process is unlikely. However, until these claims are settled, it will remain unclear whether NRL’s objections will be successful and therefore the amount and timing of potential cash outflows remain uncertain. THIS HAS CAUSED CURRENT LIABILITIES TO EXCEED CURRENT ASSETS, BUT MANAGEMENT ARE CONFIDENT THIS CAN BE MANAGED OVER THE COMING YEAR”.
So, the situation is due to provision for disputed tax claims - which the Board did not expect to need to be paid in the period but could be managed if they did need to.
The proof is in the pudding...
Working capital is the difference between current assets and current liabilities – specifically cash and other assets expected to be converted to cash 12 months Vs amounts due to be paid to creditors within 12 months.
The 12-month period from the last Annual Report finishes this Sunday. Fact is, no additional funding has been needed in the period – unless they reveal a loan or something in the next annual report, which is due in the next few days. So, the Aminex Board were telling the truth.
Also worth remembering that G&A / running costs are now very, very lean. The decrease in current assets between the Annual Report of last April Vs the Half-Yearly Financial Report of last September was just $0.529m in that 6-month period.
‘Cash at bank and in hand’ last June stood at $5.036m inc. $1.023m held on behalf of partners in joint operations – so, $4.013m that could actually be used by Aminex.
Aminex has said that the CPR which is in progress will enable them to book reserves. As pointed out by gaslady, if Aminex did need additional cash a Reserve-Based Lending (RBL) loan would be possible. Or, also as pointed out by gaslady, if TPDC decides to exercise their rights to back in, that may result in a considerable injection of cash.
In conclusion, the situation was explained by the Board in the annual report and assurances given that it would not be an issue. With operational costs so lean, unless they need money for a disputed tax claim, we should still have some headroom. If Aminex does need more cash, they should have plenty of options.
Old English, "What have you done when you better a fool" why waste time reading or replying to drivel.
Tullow would not have abandoned TZ had they found oil just North of Nt-1.
" TPDC back-in rights, is upto 15% of the Ntorya development .... " blackgold00
"Don't expect any back-in payment from TPDC"
He really has not got a clue how tpdc back-in rights work. What a dip stick. Lol, he reminds me of that very strange character Bunbooster, yes well he disappeared in a puff of smoke hopefully this one will as well.
With more laugh a minute twaddle from 'Desperate Ham'
The author writes more like the envious One Tick Mick with every issue he posts and looks like it too with that inevitable tick that appears with in minutes of the publication.
At least now this fella is running on borrowed time here, he won't be getting these prices for too much longer.
Utter rubbish
What say you MrMoi?
Highlights of the week
" There's oil alright." 1. jamtart1
Tullow would not have abandoned TZ had they found oil just North of Nt-1.
" TPDC back-in rights, is upto 15% of the Ntorya development .... " blackgold00
Don't expect any back-in payment from TPDC. Orca Energy Group has been waiting 15 years for a back-in payment from TPDC. Do expect TPDC to be more than 'on board' and 'in your face'. Utilizing delaying procedural tactics often results in a postponement that can put Aminex in a financially precarious spot. Aminex has no control against these multitude of nefarious forces lined up against it.
The bigger concern should be whether or not TPDC will sanction the 'going concern' of Aminex. TPDC may consider purchasing the remaining assets of this foreign entity at a reduced price due to financial distress.
= = = = = = = =
Question of the week
It doesn't matter what the 3D seismic depicts. If you can't make a profit, you can't make a profit!
Why proceed with a business plan if it is destined for a loss?
= = = = = = = =
There are so many issues still to be resolved.
Has a rig been contracted? Is there a rig available?
Is there a resolution to the foreign exchange reserve deficiency? Why would ARA proceed without a resolution to this issue?
It doesn't appear that cash flow will arrive in time for Aminex! What are they going to do?
It doesn't appear that they'll be able to retain the operator status for Kiliwani. What are they going to do?
How do you anticipate the company generating a profit when payments are made in Tanzanian Shillings?
Do you truly think that TPDC will proceed with a back-in payment?
= = = = = = = =
The company's track record is essentially 10 to 15 years of missed opportunity costs. Aminex is non sine periculo .... far, far from it.
" Wisdom consists in being able to distinguish among dangers and make a choice of the least harmful." 1. Machiavelli
Receiving a takeover offer can be considered fortunate and may be seen as a blessing if it occurs. Regrettably, the imposition of a substantial capital gains tax renders this option improbable. Perhaps, TPDC may be able to find a solution to this 'tax' issue.
I am still of the opinion that the speech which include a reference to licences has been widely misinterpreted.
That is not to say the current uptick in the SP is beginning to reflect the true potential and I still think its undervalued.
The impending licence will come (possibly, maybe, hopefully, imminently, some time in the next 1-2-3-4 qtrs) I just do not believe the the licence has been finalised by the TZ govt and signed sealed and delivered to ARA or AEX.