LONDON (Alliance News) - Aminex PLC Thursday said it has extended a six-month loan extension for its USD7.6 million corporate loan facility as it continues to progress broader refinancing negotiations.
The oil and gas company has already said it expects to produce first gas from its Kiliwani North project into the new Tanzanian regional pipeline by the middle of this year, but that's dependent on final commissioning of the new pipeline, the completion of a processing plant in Songo-Songo Island that the company said is on schedule, and the signing of a gas sale agreement for Kiliwani North.
It said Thursday that the gas sale agreement is complete apart from finalising the payment protection clauses and guarantees, but given that there's uncertainty over the exact timing of a signed agreement, it has negotiated an extension of its loan facility until January 31, 2016. That'll allow it to complete the ongoing repayments and its broader refinancing talks.
Aminex said it currently in talks with a "substantial financial group" which has indicated a willingness in principle to make loan finance available to Aminex. That would allow the company to pay down existing loan obligations and continue to develop its Tanzanian licences, especially the Ruvuma PSA.
"While there can be no certainty that these discussions will conclude satisfactorily, the board of the company has a reasonable expectation that an initial part of such a facility would be available prior to the commencement of production and will not be conditional on signature of the GSA in Tanzania or commencement of production," Aminex said.
It also said that the option it granted to Solo Oil PLC to buy an additional 6.5% interest in the Kiliwani North development licence remains in force, and the net proceeds from this sale would also be used to reduce any corporate loans and potentially help in developing the Ruvuma assets.
It said its refinancing options have been assisted by the results of the recently-completed Competent Persons Report, which attributed 28 billion cubic feet gross of contingent resource to the Kiliwani North gas field and 70 billion cubic feet gross to the Ntorya gas discovery. It expects to book reserves for Kiliwani North when it signs the gas sales agreement and starts production.
Aminex is the operator of the Kiliwani North license with a 58.5% stake whilst fellow London-listed Solo Oil holds a 6.5% stake, with an option to increase it to 13%. The project is connected to the country's main infrastructure after the regional pipeline connecting Dar es Salaam to Mnazi Bayand was completed at the beginning of April. Kiliwani North will initially produce around 20 million cubic feet per day of gas through the processing plant, and gas will be sold from the wellhead to minimise operating costs.
The project has faced delays, mainly attributable to the gas sales agreement. The agreement is part of a larger commercial transaction with neighbouring producers who will use the same facilities, which has caused delays, and the company previously said it is aware of "shareholder frustration" regarding the situation.
Aminex shares were up 4.8% at 2.20 pence early Thursday.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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