Member Info for CrustyPete

So BG to be specific I think the statement you draw attention to:

- Construct EPS/Pipeline to deliver gas.
• Based on results of CH-1 and 3D seismic, construct pipeline to allow for maximum gas delivery

Construct pipeline to deliver maximum possible Gas delivery from NT1, 2 & C1 - i.e. an 8" pipeline that will more than cope with the flows from all three wells for EPS production - I stress EPS production as highlighted in the IO Commercial study illustrated on Page 9 of the Corporate presentation of 5th February (see below). Maybe, just maybe, even cope with additional flows from NT4 and beyond dependent on the outcomes of C1 and re-working of NT1 & 2 etc. Maximum could be 140 MMscf/d but if C1 then only provides, say, 40 MMscf/d and when added to Nt1 & 2 could mean say 80 MMscf/d - that would leave additional capacity for NT4. So they may not need to build the second pipeline until required for NT5 gas..... (all purely hypothetical of course)

http://admin.aminex-plc.com/uploadfiles/Corporate%20Presentation.pdf

I expect the second pipeline to be built to carry more gas flow from subsequent wells once the first well has reached maximum capacity.....

No, BG I do not believe that you can necessarily draw that conclusion. Firstly no-one at this stage can estimate what the capacity of "FFD" will actually be so how on earth can you make that statement.....? There are two pipelines planned; when will the second one be built? Probably when the flows of the previous wells fills the pipeline? How many wells will that be? Who knows......

Optimism? Everything is relative Walby; much of the upside potential has been sacrificed for downside protection with the proposed farm out, in my view Walby. Which is fine if you are of that ilk that likes downside protection but that wasn't what I bought it for. Moreover it now has nothing to do with Aminex's ability to sort it and sell it, it is now down to APT... and that is probably a good thing when you see what Aminex managed to do with NT2 and Kiliwani. But recent events give me no reason to believe that we wont be in exactly the same boat when we get to trying to monetise Nyuni and Kiliwani. We are told that Zubairs were the only commercial funding option in town and that was for 1.87 TCF of gas with a possible Development License on the horizon for EPS and monetisation. What chance Nyuni and Kiliwani? Who do you think will be getting the lion's share of the upside there too?

Unfortunately as Malcy said - to paraphrase - the already very patient AEX shareholders should eventually be rewarded for being patient yet longer still. I had hoped that those days were largely behind us.

No Drewky we will NOT have earned $80 million in "profits"... that is our bloody money!! Owed by APT for 50% interest in Ntorya. It is not profit they are simply returning to us what they owe under the farm-out agreement. We will have earned no more "profit" than Solo assuming they still own 25%..... Moreover we are never likely to see it as cash. It will be ploughed back into future development.

Furthermore whatever you may think BG regarding the drilling of further wells, at the Turner Pope Investment evening JB stated that early drilling of NT4,5 or 6 (before income initiated from EPS) was certainly a firm possibility (C1 might disappoint). No-one in their right mind would wait until the demand for gas was alreday there before beginning to drill one, two or three wells and putting in a second pipeline - that would take 18 + months from initiation to production; hence that would be done in advance of that anticipated demand; that is to meet the "forward" demand curve. They would be drilling in 2019 for the expectation of meeting future demand in (say) late 2020 early 2021. The Omanis, and others, are currently, or soon will be, building a large number of industrial plants of various types that will only be initiated if they know that the future gas demand can be met.

It is pure speculation OG and more material for Solo than AEX as they will have to find the funding for it. Moreover as I said there; "the presentation that AEX issued to coincide with the farm-out states what their official position is...."

If you want to paraphrase / cut and paste it and post it here feel free but I will be offline all afternoon.

As JD says the presentation that AEX issued to coincide with the farm-out states what their official position is.... The issue is whether, post Farm-Out, that position changes or moves? Aminex will no longer be in control of the work programme; that will be the province of APT, in conjunction with the TPDC. So I am expecting further wells to be drilled in 2019 over and above C1, yes.

And don't forget that in 2020 there is a General Election in Tanzania; the faster they develope Ntorya and the greater the gas production and supply into new Industry (much of it Omani funded / developed) the better for the Govt and the Omanis.

The early development of NT4,5 &6 will increase the daily flow rates enormously and bring those rates forward significantly, which is great news, but I do believe that there will be far more than the $60 million spend on C1 seismics and spur BEFORE that development provides income from EPS. Sizeable incomes far earlier than might otherwise have been expected but at the cost of greater up front funding.....

That is why AEX needed to negotiate $35 million carry...

So what are you expecting them to have to communicate QT? What is there likely to be before the Farm-Out? Nothing much as far as I can see... Most of that news flow will surely be "post Farm-Out".

Moreover once the Farm-Out is signed anything relating to Ruvuma we will have to rely on ARA (APT) for, so I won't be holding my breath for that. And what else is there? KN1 remediation is about it methinks in the short term.

So yes I think your conclusion is correct; between now and EGM at least.

That would make both of us equally cynical then P0werplay; my thoughts exactly....

Though it will still be some time before TPDC KN1 "sign off" and resumption of production I fear? There are no guarantees of that even with "Foam Rods" and "Compression"..... Before the year's end if all goes well but even then only 7 MMscf/d

But that is exactly my point JD, I am not expecting that $20 million additional spend to be post EPS.... I am expecting APT to be doing additional 3D seismics and additional drills between C1 drill and EPS; that is between Jan 2019 and Jan 2020.

When AEX stated that they had $35 million carry to EPS that was including $45 million for C1, seismics and spur and another $65 million for what.....? As JB explained at the recent Turner Pope Investment evening the whole point of the Farm-Out to Zubairs was to enable the drilling of NT4,5 & 6 to be brought forward and not for it to become reliant on C1 drill and EPS proceeds. And why the need for $35 million of carry if it wasn't going to be spent post EPS? The reality is that it will be spent in advance of EPS. And, if I am right, and Solo still has 25% they too will have to stump up $35 million before EPS not after.

Sorry meant to continue....

AEX and APT have identified that to get to EPS it is likely that total spend (for 75%) is possibly $105 m of which circa $45 is for C1 related expenditure, 3D seismics and Spur.... meaning that Solo will need to find $15 to get to the same position. That, by extrapolation, means that they are also expecting to spend another $65 million on additional development over that same timescale (more seismics and more drills, second pipeline?). Where will Solo fund their contribution towards that development? Another £22 million.....

I am not saying they won't but that might require them finding circa $37 million to carry all the way to EPS and that will not be easy for a company with a current MC of only £11 million. And what is the alternative? Farm-Out? But to who? ARA are the only game in town and I cannot see ARA paying more for Solo's assets than they did for Aminex's (for obvious reasons)

Yes CP but he doesn't opine on which, if either, is correct... ;0)

Personally I think £80 million is grossly overvalued (that is not to say that it will fall as it is now seriously de-risked) and £11 million is undervalued (but that is not to suggest that the sp will rise as there is a lot of inherent risk still is Solo's monetising of the asset).

AEX is unlikely to rise significantly until after C1 but unlikely to fall significantly either; Solo should rise by a greater proportion after C1 but will Solo be able to access sufficient funding to get it there.....?

There is also the aspect of Market cap... £250 million before most Fund Managers can even touch it.

I disagree OG, fund managers typically do not take risks on drill outcomes. Nor do they typically invest in Company's that are not the Operator of the asset (due to lack of transparency and control) and after the Farm-Out AEX won't be. As I said before and still maintain, once the gas starts flowing? Possibly, as then it is about revenue stream and development of assets that Aminex is the Operator of.

I would like to think you are right OG but I am afraid to say I don't. But it is, of course, only my opinion.

OG, even if there were any medium risk investors and fund managers looking to get in after C1 any of them that have any sense (the vast majority) will wait until the mad hoards have already jumped ship before investing.... Wouldn't you? I certainly would. Wait until a few weeks, even months, after the C1 drill and analysis it will still be many months before the income starts to arrive.... I personally believe that the income will need to flow before we see any appreciable II interest.

Sorry BG, which end? ;0)

And no BG, how could we forget? Shades of Christine Keeler methinks..... we only have two and one of those is a related party :0)

Well be wary, better out first than last, as so too will the world and his auntie

Well GL they are in exactly the same boat as you, me and everyone else that is a LTH.....

I am sure the Zubairs would be happy to allow another Majedie onboard as a shareholder now that they have got total control of Ruvuma. They can now do just the same with Nyuni and Kilwani; allow the new investor to take most of the risk, fund all of the development capital and then just as they are about to get a pay day buy it off them for a song using their 29.9% "controlling" interest? ;0)

However I am not sure that they will find too many takers. Who would want a repeat dose of what we have just experienced?

I wouldn't argue.....