RE: Tanzania needs Gas30 Aug 2021 10:42
June RNS:
"Moreover, their revised mapping and internal management estimates suggest a mean risked gas in place ("GIIP") for the Ntorya accumulation of 3,024 Bcf, in multiple lobes to be tested and a mean risked recoverable gas resource of 1,990 Bcf, which will be appraised by the planned seismic and drilling programme."
The issue is how you value that gas in the ground. At the moment it is stranded gas. So little value. Two catalysts will change the valuation of circa £25m. More gas being found. The stranding ceasing.
Lets remain super optimistic and say that the numbers hit 4TCF after the next drill. Or in other words let me round up. Our 25% licence would mean that is 1tcf net to Aminex. There are many arguments to be had over what value is ascribed to that amount of gas. But it is clear that as that volume of gas becomes less stranded and approaches market the value goes up from these levels. That is unarguable.
So although I have posed the question, ie. what value should that stranded gas in ground have, I am going to ignore my own question. My answer is it does not matter (to me) because it is more than £25m. Much more. As a very old back of fag packet and using old arguments like Cove, in ground 1TCf is £400m. The Cove valuation is years ago and is in a different market (offshore/LNG). But the gas price has trebled recently. Lets say I am wildly out and it is half of that. So £200m. That is x8 the current share price.
So my point is I don't care about precise valuations now as they are impossible. They become more possible as the production plans and route to market (including sale price and timeline) become clear. The one thing that is clear is that the share price will increase significantly. The 5-10p range is likely (IMHO). Beyond that will depend on what more is found and whether it is oil too.
The other thing I am comfortable about is that Zubair/Ara are as good as their word. They really do want to use Aminex as their vehicle in East Africa. I cannot pretend I know why. A more cutthroat large partner would just buy the whole company for the asset. They could pay double the mcap now and get a bargain. But they are not doing that.
I have said before and remain of the view that the risks for Aminex have all but gone. I guess the remaining risk is opportunity cost as the timeline is a year to the major catalyst. But on the views above this is a rare (I won't say once in a lifetime, oops I just did) opportunity. Low risk, huge asset, missed by market so far and a funded plan to realise the asset. It does not get any better than that.
All In my honest opinion. Do your own research. Good luck to the unfiltered ones on here!
Sign In
Follow the stocks
