Member Info for Aimster

There is always risks until a deal is finalised. Scirocco with a £2.5m market cap, for one, is a prime target for a takeover.

Because it would be foolish to take the risk

ufufuo … nobody has stated that the SCIR deal will not go throu. The discussion is whether ARA will progress the project any further until the deal is finalised.
By the way FYI , Scirocco had a legally binding deal with One Dyas, look what happened there.

Looking at the latest SCIR presentation it looks like there are 4 layers of approvals until the deal is completed.
The first, FCC Fair Trade Competition which has just been approved after 4 months.
The second is TRA Tanzania Revenue Authority. Remember they decided put a tax on the AEX/ARA farmout.
The third is PURA/TPDC
And finally Ministerial, once all the various agencies have signed off the transaction the final step is the Tanz Minister of Energy.
Will the deal be approved in Q1 2023? Based on previous experience, probably not.

I agree with Jacktrade. They cannot drill ch-1 until the deal is completed. What happens if they hit a billion barrels of the black stuff. If there is no clear deal completion date (remember this is Tanzania. It took over 2 years to complete the AEX farmout), how can they book a Drill Rig contractor for a specific date.

Thanks Keith

Is it the SCIR deal that’s holding us up?
ARA will not drill until the deal is done. So will ARA arrange to mobilise a Rig before the deal is completed? Probably not if there is still doubt when the deal will be fully approved.
There’s also confirmation of CH-1 location. At the moment as part of the JV, ARA are still legally obliged to provide SCIR with the same info as AEX. Perhaps 3D seismics results has doubled or tripled gas resources but ARA will keep updating the model, rather than releasing results, until the SCIR deal is signed off.
Until the SCIR deal is complete, IMO ARA do not want to do anything that may put the deal in jeopardy.
I could be totally wrong, but I would have thought CH-1 location should have been confirmed by now.

Thanks for info.. so mid-Feb spud could be a possibility. So beginning of New Year, 2 weeks to transport rig and 4 weeks to build, test and sign off.
Can anyone confirm existing Drill Pad is sufficient?

Blun91 …. Do you know if Invictus have decided to postpone drilling Baobab-1?

Full payment for the drill is AFTER the drill is complete. I expect the drill to cost between £3m-£5m based on TD required and on Invictus costs. With $5m cash in June we have enough cash for any initial upfront costs.
The Placing will come once we have rig mobilisation and a confirmed spud date which IMO will be early new year. FOMO will probably then kick in as the SP gradually creeps higher.

You could value AEX Ruvuma assets at $16m (not including development)!!! That’s what ARA is paying for Scirocco’s 25%. Plus $35m free carry in development costs. With a current MC of £46m ($55m) with no income you could say that we are overvalued.

Just hope hope CH-1 location hasn’t changed else March drill looks at risk.

2016 - NT2 Drill RNS with AEX as the OPERATOR

1 Aug - Civil work for the Ntorya-2 appraisal well has commenced and it is expected that the well pad will be completed within 10 weeks.

23 Sept - Rig contractor signed off for NT-2 drill

18 Oct - Civil works for NT-2 well site complete and mobilising Caroil 2 rig. Spud late Q4, drill expected to take between 45-60 days

5 Dec - Caroil 2 rig independently inspected.

19 Dec - Caroil 2 rig formally accepted by company. Spud is expected next few days.

21 Dec - Spudding NT-2

It’s been over 4 years since the farmout was announced and it took 2 years to complete. It just seems to take forever in Tanzania. I just hope the ARA Scirocco deal doesn’t take 2 years because that needs to be concluded before we get any GSA or spudding of CH-1.
Is the Tanz Gov corrupt? How many layers of bureaucracy does the application have to go through before approval? If a brown envelope is missed at each layer does it have to been resubmitted? Beggars belief.

Invictus Energy, who currently have the rig that we will now using, budgeted 25m Aus Dollars (£14m) for 2 Drills, both over 3000m to TD.
So I assume one drill (Tai) at just over 1000m would cost around £3m-£5m.
This time last year we had £8.5m in cash in the kitty. So the question is will DM wait until a discovery after Tai results when the SP will be substantially higher OR go the less risky route on the run-up to Spud?

This project is a little like the chicken and egg scenario. The Tanz gov are doing the PR to attract investment by stating to they’ll build the pipeline in 6-9 months time. The daily flow rate has jumped from 60mmcf/d to 160mmcf/d in order to attract customers. At the moment Wentworth are meeting current gas demands. I’m waiting for Tanz gov to sign off the ARA Scirocco deal and ARA to confirm CH-1 location. The GSA will not be signed until the Scirocco deal is done and dusted. Any other news is just noise.

IMO there’s 2 things that need resolving ASAP. First is the ARA Scirocco deal. IMO ARA will not progress anything until that is completed and most likely letting the Tanz gov know so. I expect that to be completed very soon after last weeks photo shoot. The second is confirmation of CH-1 location. They can’t mobilise any rig until CH-1 location is confirmed. My main concern is missing the Jan/Feb weather window to construct a new Drill Pad and access road if required.

Edgar … excellent post.

Yes, over the years, I’ve witnessed lots of PR photo shoots and document signing agreements for the Uganda to Tanzania Oil pipeline , which hasn’t even started construction yet, if it ever will. All the LTHs should remember when we first heard about that. Recently the Chinese are showing an interest.

Looks like a PR exercise to encourage investment into the country. $500m investment and now 160 mmcf/d . No real news on real progress. Just hot air at the moment. I will be interested to see if we get an RNS on Monday, but stating what with regards to AEX?

Looks like we need to keep an eye on the Tanzania media for any news. TPDC stated that CH-1 would be drilled Q1 2023 WEEKS before any AEX RNS informed us.
I’m still waiting for confirmation of CH-1 location from 3D Seismic results.