Member Info for CrustyPete

Do bear in mind Ufufuo and others these are "unrisked" assessments and there will always be an element of risk that would impact these valuations dependent on the perceived risks at any given point. The further through the drilling programme the further reduced that risk will become but will never become Zero until the last of the gas has been monetised.

However even with that being said these are some very encouraging numbers - if we ever get to 50% of these estimates (50% discount for perceived risk) it would be very good news. The GSA would be the first positive step in derisking....

Good night all and I wish you all a lovely weekend.

BG, I have ben doing a bit of digging and it seems that the Government of Tanzania began a review of all existing PSA's in 2018 to be completed in Feb 2019 with the expectation of amending and renegotiating those existing PSA's. What I have been unable to find is the outcome of that review but then maybe it is specific to each and every Agreement. Though I would freely admit that if our PSA had been amended under that review I would assume that we would/should have been informed - I don't recall being notified of any change.... but then again maybe those changes are contingent of the conclusion of the GSA? But I am purely guessing.

See https://arslaw.co.tz › review-of-production-sharing-agreements

It was only their expectation BG and not a given, conceivably, it may not have been put into effect. Maybe they managed to negotiate that away for (I am making this up) immunity from payment of historic costs? Most of which were probably due to AEX and not ARA!

Thank you ICB.

It was information volunteered in the Q&A sessions from the floor. In context it was in discussion regarding the GSA, terms and likelihood of selling gas at wellhead with TPDC doing the pipeline or the alternative of ARA building the pipeline for a better price etc They stated that they believed that whilst not their preferred option the former was the most likely outcome and with TPDC taking up their full back-in rights of up to 20% which is what they are entitled to under current legislation.

"As far as we all know, TPDC back-in rights, is up to 15% of the Ntorya development"

So I am making what I heard at the AGM up am I? Believe me, they were discussing the expectation of a 20% dilution. Agreed, that has yet to be evidenced BUT BG I am NOT making it up.

As regards the costs versus the loss of income - I stand by my claim earlier - saving 15 or 20% of the costs of Ntorya development is immaterial compared to losing 15 -20% of all future Ntorya income streams; future income, revenues, P&L are important metrics in the valuation of any entity, the cash on the balance sheet has minimal contribution to valuation. So $7m in additional cash will have no effect on the sp / MC or anything else, $8m of future revenues could add enormous value.

So no, BG I emphatically and totally disagree with you; any dilution of that scale is "material". Indeed the greater the value the underlying asset the greater the value of any dilution; increase in assets and resources, the bigger the impact. We might never be able to identify or quantify the direct impact to shareholder value, MC or sp but to simply dismiss it as unimportant or immaterial is pretty short sighted in my view.

I do though agree that I would rather have TPDC in the tent and not out but is that worth 15 -20% equity? I don't think so. Then again there is feck all we can do about it, so little point in arguing the toss - but again to dismiss it as immaterial is frankly out and out Ostrich mode.

Do bear in mind that most of those historic costs would have been incurred when AEX were the operator and 75% license owner - but what would TPDC be due to fund and as far back as when? NT1 & NT2? No idea.

Not sure about historic costs RJ but a good question - depends, perhaps, on when they were incurred?

Have to leave you now for a little while - out for lunch.

Keep that sp up!! ;0)

There was historically RJ (maybe BG would dig that reference out again) but, I suspect, based on what was said at the AGM it may have been renegotiated as part of the Ntorya GSA discussions. But even if not it was fixed previously at 15%. In any event my last post is still just a relevant, just substitute the numbers.

But RJ even if the $35m that is earmarked for Ntorya development was reduced by 20% ($7m) would uyou rather have that $7m in the bank (paid back from future incomes btw) but at the cost of 20% of those future income stream ($8m per annum)

$7m, in the bank (paid over time), versus $8m a year potentially for decades - which do you think will have the greater impact on the sp? I know the answer and so I suspect do you. Cash in the bank NEVER has much of an impact on the sp - annuity income in the form of "guaranteed" future incomes certainly does.

Well that last we heard "officially, a BG has pointed out, is 15% - BUT - as you may remember, when this was discussed at the last AGM, TW and Sultan stated that they were expecting 20% -perhaps included or clarified as part of the recent GSA.

But yes RJ whatever it is will affect both ARA and AEX pro-rata but a 20% dilution of assets is not to be sneezed at! Though I do not think it will stop the sp rise over coming months with successful completion of various milestones - simply moderate it.

Well jshute, I said that I would top up when the sp reached 1p and, when it did about two weeks ago, so I did.....

ICB you reference the FT/IC site - could you be a bit more specific - I would quite like to take a look at that.

Thanks

Not before the EWT - you heard it first from our own BoD....

Just offered 1.425p for 1,000,000

And SELLS at 1.4975

Indeed gents now 1.40 -1.50p with BUY trades at 1.48p

I do not expect anything now until after the Energy show is complete largely because before we get an RNS and, as emptyend pointed out, ARA will need written confirmation of the 25 Year Dev license completion before ARA can release the news to AEX and AEX can release that RNS. With so many "prime movers" at that show/conference I suspect little will move until everyone is back "at their desks" - plus there is the issue of the RNS "approval" before release.

Though as Edgar says and I agree, it is only a question of when and not if we will get it. I am also sure that it will have a positive impact on the sp - though quite how much of an impact is likely to depend on what, if anything gets announced with it? As emptyend has pointed out it could come with a slough of additional activity or pointers to the timelines for such activity. Anything will help - with the possible exception of confirmation of the execution and extent of any uptake of the TPDC's back-in rights. That could have the effect of a considerable dilution.

Sorry RJ obviously I meant when NT3 became CH1 !! ;0) Sorry.

By the way RJ just to point out that NT2 would not have been an exploration well as NT1 effectively "found" the reserves that NT2 would be drilling into - NT2 was to be an appraisal well. When NT2 became CH1 (drilling into the Jurassic targets) it reverted to an Exploration Well as it was "exploring" a target that had yet to be discovered or proven to exist. Now that these targets are no longer being explored it will revert to an appraisal well. NT3, 4 all the way to #8 will be appraisal wells; they will be appraising what they already "know" to be there. Only once they go outside of the fan basin that they have "proven" will those drills revert to becoming exploration wells.

At least that is my understanding.