(Alliance News) - Shares in Aminex PLC rose on Tuesday as the firm said it is nearing completion of the farm-out agreement for Tanzania's Ruvuma project.
Aminex shares were 11% higher on Tuesday morning at a price of 1.11 pence each.
Aminex agreed a farm-out of 50% of the Ruvuma gas field with ARA Petroleum LLC in 2018, and has experienced delays in completing the deal. All conditions within the two partners' hands, Aminex said Tuesday, are now complete.
The company said the government is making good progress resolving issues with other parties in Tanzania, giving the firm enough confidence to start pre-drilling activity at Ruvuma.
ARA is to provide USD3 million to Aminex before the farm-out is formally completed, instead of at completion. The USD2 million second tranche, which had been due 180 days after completion, will now be paid on completion.
The longstop has also been extended, once again, to June 2020, but Aminex and ARA do not expect to need all of that time.
Aminex Chair John Bell commented: "ARA is suitably encouraged by the ongoing discussions with the Tanzanian authorities to accelerate the planning and preparation for the spud of Chikumbi-1. Furthermore, these advanced payments demonstrate a commitment to this excellent asset, which when on production will play an important role in meeting domestic demand for gas from the people and businesses of Tanzania and a possible international market through export arrangements with neighbouring countries.
"Alongside our partner ARA, we continue to work towards completion of the Ruvuma farm-out, and are proactively engaged with the Tanzanian authorities to obtain the outstanding approvals and licence extension."
By George Collard; georgecollard@alliancenews.com
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