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Just the headline I am afraid
Mystery surrounds Providence shareholder’s identity
Former Glen Dimplex chief denies he is the unnamed major investor in oil and gas explorer
Barry J Whyte
Barry J Whyte
Chief Feature Writer
@whytebarry
Ian Guider
Markets Editor
@ianguider
Ian Guider
2nd August, 2020
Mystery surrounds Providence shareholder’s identity
Sean O’Driscoll, the former boss of Irish industrial giant Glen Dimplex, has denied that he is the S O’Driscoll in question.
Providence Resources, the beleaguered Irish oil and gas exploration company, cannot say for sure who one of its top shareholders is, despite notifying the stock market about the holding nearly a fortnight ago.
The company told the stock market on July 20 that a pair of investors, who were named only as “S O’Driscoll and R O’Riordan” held 3.56 per cent of the shares in the company, worth nearly €1.65 million at the current share...
Hopefully Barryroe will be the new Gas Field
https://twitter.com/OffshoreIreland/status/1287672456199774209?s=19
I posted this in early June from an article in The Phoenix Magazine. Current events may be pointing to a takeover by Mohammad Al Zubair. Now would be a good time to take over the entire company as it will be worth a fortune in the future.
On foot of Hall's second well success in February 2017, the Aminex share price went up to 7p in anticipation of a third well to prove up what could be a huge gas field. This, however, has not delivered and the share price has drifted down to the point where it is now, trading at less than 1p.
This price looks like a huge underestimate of even the remaining 25% stake Aminex has in the Ntorya gas field, which is covered by Aminex's onshore Ruvuma Production Sharing Agreement (PSA) in Tanzania. Significantly, this field is at the end of the huge 36-inch, 400-mile gas pipeline, funded by the Chinese, along the east coast of Tanzania right to the adjoining gas processing plant beside the field.
As Aminex has a carried interest here, it will not have to pay anything to develop the third well and any other wells, that would be required to bring the field into production.
On a very crude estimate of the field containing a possible recoverable 1 trillion cubic feet of gas, the Ntorya field has a potential gross value of $3bn. Assuming capital expenditure and operating costs of a generous $1bn, this means that Aminex's interest in this field could be worth an estimated net $500m. Moreover, the price of gas in Tanzania is not subject to variations like oil, but is fixed by the government at $3 a cubic foot.
At the current share price of just under 1p, Aminex is capitalised at £31m, a figure that comes nowhere near to reflecting the potential, even post the farm-out deal. Mohammad Al Zubair should immediately move to buy in the of Aminex's equity for something closer to the 7p these were trading at in March 2017. In this way, he could extract the independent Aminex shareholders from the unsatisfactory situation, wherein a significant shareholder clearly has huge influence, with even the chairman declaring a conflict of interest, while the CEO was a long-term employee of the sultan.
Three TDs from Cork South Central in cabinet one of them being the Prime Minister. Eamonn Ryan mentioned on the news that the cabinet will decide issues on a consensus basis. No mention who will be minister for health but it may be Catherine Martin.
The LNG plant was going to provide gas for the Irish gird, which will now have to replaced. Importing gas from the UK will result in possibly using fracked gas, making the ban on the LNG plant at Shannon look like a Irish solution to a Irish problem. Barryroe provides the most environmentally best option. It reduces the extra carbon emissions associated with importing gas from aboard and there is a comprehensive plan in place for carbon capture. You also secure energy independence as well have exchequer revenue and jobs. If the Greens wish to reduce global emissions rather than make political capital for their party, Barryroe is clearly the way to do so.
Hopefully they are also in talks with Statoil or Conco Philips about investing in Barryroe.
We need a much more realistic debate on this energy supply well done. https://t.co/ecrtVg0KeK
The LNG storage facility at Shannon has become the focal point of government formation talks. If the Green enter government and their coilation partners decide to go ahead sometume in the future with the plant at Shannon, the Greens are certain to bring down the government. Alllowing Barryroe to go ahead using the Kinsale gas pipeline and the existing infrastructure would secure domestic gas supplies for the foreseeable future and as Alan Linn has pointed out, Providence have a detailed plan in place for Carbon capture.
Page 36 of the Programme for Government:
We will harness the natural resources to meet our needs in this country, without compromising the ability of future generations to meet theirs.
We Will
? End issuing of new licenses for exploration and extraction of gas, on the same basis as the
recent decision in relation to oil exploration and extraction.
? Support the tightening of the sustainability assessment rules prior to the approval of any
projects on the EU PCI list.
? Ensure that Bord na Móna is required to take into account climate, biodiversity, and water
objectives as they deliver on their commercial mandate, through an amendment to the Turf
Development Acts 1998.
As Ireland moves towards carbon neutrality, we do not believe that it makes sense to develop LNG gas import terminals importing fracked gas, accordingly we shall withdraw the Shannon LNG terminal from the EU Projects of Common Interest list in 2021.
We do not support the importation of fracked gas and shall develop a policy statement to establish that approach
We will ensure that local development plans are developed to stimulate economic activity for those
areas which were expecting economic development arising from new fossil fuel infrastructure. As
part of that we will consider how the potential of the Shannon Estuary in terms of regional economic
development across transport and logistics, manufacturing, renewable energy and tourism, and
develop a strategy to achieve that potential with support from the Exchequer.
George Lee RTE news
There will be a ban on the importation of all fracked gas, not just that planned for the Shannon LNG project.
Sounds like good news from DelBoi. We will have to wait to see how things work out, but if the LNG plant does not go ahead in Shannon, it does increase the importance of Barryroe for energy security.
Hi Longwait and I think the LNG plant is in real difficulty going forward. LNG gas has a very big carbon footprint. I remember John O Sullivan referring to a article showing importing LNG gas would result in a carbon footprint 10 to 15 times higher than Corrib. On top of that it is fracked gas which has a very poor image. As for Barryroe I am sure Providence will be pointing to the existing infrastructure at Kinsale and to the pipeline, giving availability to the national grid. The leader of Fianna Fail and their fiance minister, as well as the deputy leader of Fine Gael all represent Cork South Central.
https://twitter.com/MichealLehane/status/1272132489453150208?s=19
The question is what does the word further mean in this context. Further: Additional to what already exists or has already taken place or been accounted for. Hopefully the word further means that Barryroe will not be included in the ban as it already has being accounted for under previous legislation.
Here is the start of the Phoenix article:
It is difficult to know what exactly is going on inside Aminex and exactly where it is getting its leadership from. What is clear is that there have been some board and executive appointments that have hugely increased the links to the major shareholder - Mohammed Al Zubair, the Sultan of Oman. The unfortunate independent shareholders have seen the share price sink over the last three years, from 7p to less than a penny, despite the huge potential of the company's main asset, its stake in the Ntorya gas field in Tanzania, which could have a gross value of $3bn.
Aminex has had three chairmen and three CEOs over the last two years, which must put it at the top of some sort of league- and not a good one. Brian Hall believed that he had found a successor in Stuard Detmer nine years ago, but he was gone within two years.
Hall then found Jay Bhattacherjee, who became CEO in 2014, with Hall retiring in August 2018. Bhattacherjee surprisingly jumped ship in May last year on the grounds of ill health. ( He is currently chairman of Nu-Oil and Gas.) The CEO exited just a week after intimating that Aminex had a great future, not just on its big onshore gas discovery in southern Tanzania, but also on its tiny Kilwani gas field offshore further north, which under his watch had completely dried up.
When he then exited without warning, Bhattacherjee organised a hefty (given the size of Aminex) $300,000 pay-off for himself, having taken out $400,000 in the previous year. In contrast, Brian Hall took $72,000 in 2017 and $167,000 in his final year 2018.
Hall oversaw the company's projects through Russia to Tanzania, where he risked an offshore well that was budgeted to cost $6m, but actually cost $12m, partly because there were no services in the area. This proved a dud, but Hall drilled another well that turned into the producing Kiliwani gas field, although this has since run dry.
More significantly, in 2012, Hall entered into a 50/50 deal with Aidan Heavey in Tullow Oil to drill the big onshore Ruvuma licence. When this hit its primary target, which proved a dud, Heavey decided to pull out, but Hall accepted solo risk on the drilling of the secondary target, which proved a big find. When flow tested in June 2012, the perforated upper 4.5 metre section of sands flowed at a very substantial rate of 20 million cubic feet a day, with accompanying oil of 139 barrels a day.
On the back of this success, Hall raised $25m to enable Aminex to drill a second well, which was done with the support of Mohammad Al Zubair, the Sultan of Oman. The latter put up $17m in return for a 28% stake for his company, Eclipse Investments LLC, a subsidiary of Zubair Corp.
In early 2017, Hall drilled a second well, the so-called Ntorya-2 appraisal well, which encountered 51 metres of gross gas-bearing sands. This flowed at a stable rate of 17 million cubic feet a day, even though it was working through a restricted choke.
On foot of this second successful well, Hall got RPS Energy to carry out an independent report, which came up with an estimated 1.87 trillion cubic feet of gas.
On a recovery rate of 55% this would put a potential gross value on the field of $3bn, - a huge figure for a company as small as Aminex.
Hall had planned to drill a third well with a much larger 4-mile step-out , the so-called Chikumbi-1 well. If successful, this would have not only hugely increased the estimated resource, but also upgraded this field to a significant proven gas discovery. This should have been drilled in 2018 but, when Hall retired in August that year at the age of 73, Keith Phair took on the chairman's role on an interim basis. CEO Bhattacherjee inevitably ended up with increase influence.
Rather than drilling the third well in an effort to significantly increase the scale and status of the gas discovery (which would improve fundraising or farming-out prospects ), he decided to implement a farm-down of two-thirds of Aminex's 75% stake in this potentially hugely valuable onshore gas field for what looks like a pretty miserable $5m ( The other 25% is held by Solo Oil ) That deal was agreed on July 11, 2018, the day before Hall resignation was announced.
Moreover, the farm-out was done with Aminex's largest shareholder, the Sultan of Oman. This move did,obviously, de-risk the whole project from Aminex shareholders point of view, but gave away a potentially huge, short-term upside value for relatively small change. The result was that the company's largest shareholder ( with a 28% stake ) managed to end up with a 50% stake in the gas field at what could prove to be a bargain price.
What is most surprising is that Bhattachherjee gave an interview on April 30th 2019 to the Proactive Investors investment media platform and talked about Aminex having in total an estimated upside gas prospect of 6 trillion cubic feet, representing huge optimism for the company's future. The following month, however, he resigned, at which point control of Aminex was handed over to Tom Mackay on an interim basis.
The appointment in April this year of Robert Ambrose as CEO further reflects the remarkable level of overlap between the interests of Zubair Corp and Aminex. Ambrose was an employee of the Sultan of Oman's Zubair Corp for the last 19 years ( most recently as COO of the energy division) and had even been appointed as a Zubair nominee on the Aminex board on September 6, 2019. Seven months later, he replaced Mackay as Aminex CEO, with the press releases stating that he was "no longer a representative of Eclipse on the board of Aminex or otherwise associated with Zubair."
Surely, given the influence of Zubair on the company, what Aminex needs is a CEO who is clearly totally independent of its largest shareholder (which also happens to be farming into a 50% stake in Aminex's big onshore gas field.
Moreover, according to the latest (2019) annual report, the current chairman, John Bell, had to recuse himself from an Aminex board meeting because of a "conflict of interest".
Aminex told The Phoenix that the conflict related to one board meeting that discussed Bell's " appointment as chairman in the earlier part of the year".
Appearances matter in a situation like this and it surely requires the London Stock Exchange to at least carry out a review of all of the appointments made since Brain Hall left in August 2018, particularly in light of Bhattacherjee's unexpected, resignation on May 23 last year.
The unfortunate independent Aminex shareholders must be bemused at these events.
Article in The Phoenix Magazine this week. Most is a history of events so far, but here is the end of the article:
On foot of Hall's second well success in February 2017, the Aminex share price went up to 7p in anticipation of a third well to prove up what could be a huge gas field. This, however, has not delivered and the share price has drifted down to the point where it is now, trading at less than 1p.
This price looks like a huge underestimate of even the remaining 25% stake Aminex has in the Ntorya gas field, which is covered by Aminex's onshore Ruvuma Production Sharing Agreement (PSA) in Tanzania. Significantly, this field is at the end of the huge 36-inch, 400-mile gas pipeline, funded by the Chinese, along the east coast of Tanzania right to the adjoining gas processing plant beside the field.
As Aminex has a carried interest here, it will not have to pay anything to develop the third well and any other wells, that would be required to bring the field into production.
On a very crude estimate of the field containing a possible recoverable 1 trillion cubic feet of gas, the Ntorya field has a potential gross value of $3bn. Assuming capital expenditure and operating costs of a generous $1bn, this means that Aminex's interest in this field could be worth an estimated net $500m. Moreover, the price of gas in Tanzania is not subject to variations like oil, but is fixed by the government at $3 a cubic foot.
At the current share price of just under 1p, Aminex is capitalised at £31m, a figure that comes nowhere near to reflecting the potential, even post the farm-out deal. Mohammad Al Zubair should immediately move to buy in the of Aminex's equity for something closer to the 7p these were trading at in March 2017. In this way, he could extract the independent Aminex shareholders from the unsatisfactory situation, wherein a significant shareholder clearly has huge influence, with even the chairman declaring a conflict of interest, while the CEO was a long-term employee of the sultan.
Found this on Twitter
https://www.irishtimes.com/news/environment/advisory-council-says-ireland-must-continue-to-explore-for-gasfields-1.4038046?mode=amp