Member Info for edgar222

Crusty: "So I am expecting a rise in sp - NOT the HUGE rise that you were predicting and NOT starting within (5) weeks but over the next 18 months...."

The debate seems to be semantics to me. Crusty predicts a rise over 18 m but refuses to say when he thinks that rise will start. It must start sometime though, by definition?

I agree that there is a re-rate coming. That in 18 months time we will have drilled CH1 and possibly other (multiple) wells. That we will be producing from multiple Ntorya wells (we will have 3 after CH1 and the plans are for many more). That we will be receiving cash. And that our free carry will not have exhausted yet.

I also believe the start of the obvious re-rate is before Christmas with licence, farmout and plans confirmed. I have not given up on CH1 spudding this year but do recognise that may be an optimistic step too far. With all that news by calender year end the share price should be at 5-6p for a rise towards CH1 results. That prediction is news dependant and not time dependant.

GLA

Just retweeted that timeline myself, Mouse.

Think it was just in a twitter group not out there more widely. I may have missed it.

Think about that timeline and the scramble for shares.

Very exciting.

/4 and final

I have not mentioned their other licence Nyuni as it is effectively dormant. However with Ruvuma being paid for and run by Zubair they can re-activate Nyuni which has a 5TCF prospective resources and is very close to the enormous offshore discoveries that have been so famous over the years. It is very expensive to work offshore and Aminex have not yet farmed out Nyuni. But there is one lead (Pande West I think) that we kow about because a major has discovered a lot of gas offshore and the reservoir extends into the Aminex area. Seismic data is the next plan and if Aminex can start proving that up it becomes valuable."

GLA

/3

If you believe the licence will not be granted then you have been a seller of the shares.

So by the end of November 2018 all that is due to happen. It is not guaranteed to happen and the waiting has been brutal. I am the most frustrated with Aminex I have ever been but putting emotion to one side and on the assumption that they will get their licence Aminex has never been healthier in the (many) years I have held it.

Lots of retail investors (individuals not institutions) out there think the Farmout is a bad deal and too much of the licence has been given away. I very much disagree. The history of the 75% holding in Ruvuma was that Aminex always planned to hold 37%. They drilled N1 and Tullow oil walked away from their licence and gave their 37% to Aminex (in effect). Aminex then carried on and discovered all the gas they have. So the 75% holding was almost an accident.

The demand for gas and power in Tanzania has grown enormously as industry floods in. They are building a pipeline to Uganda to export their gas. The current production cannot meet the demand. So when production can be put onstream the market is there.

The CH-1 drill is targeting (we now know) another 900BCF gas approx. Looking at the geological maps in the presentations on the company’s website I thought it might be more. Aminex have a history (believe it or not) of under promising and over delivering on the gas found by the drill-bit. There is also a chance of oil. Oil would change everything to the upside. We are expecting a new CPR before the farmout and all of the numbers mentioned might increase with that news. Every CPR to date has increased the reserves estimates.

With all of that information I have been buying Aminex again from under 2p per share. No one can pick the bottom of a descent of share price and I am not trying to. But in my opinion the shares are ridiculously cheap for what they have on the assumption the licence and farmout are approved. I own millions more than I did and my holding has doubled. My plan is to sell some on the rise towards the CH1 drill results (hopefully that can be spudded before Xmas but that may be unlikely now) and then hold for those results, which on the original plan would have been June 2017. I am trying to resist the temptation to put a share price on it on good news because like everyone else I do not know. But it hit 7p on N2 drill results and that is smaller than CH1 and Aminex were self funding at the time. They own 25% of the licence now not 75% but have a free carry. On production from 3 wells in Ruvuma (N1, N2 and CH1) and with large reserves in the ground booked the share price will be multiples of the current price. If the Zubairs wanted to buyout Aminex on good CH1 news (a distinct possibility) I would be very unhappy at the price being lower than 12p. If Aminex is allowed to remain independent and continue into the future they could be multiples of that.

I have not mentioned their other licence Nyuni

/2

Zubair not only own 29% of Aminex directly but they have farmed into the Ruvuma licence (which covers N1, N2 and CH-1). Farm into means buy a proportion of the licence. They have taken 50% off Aminex, whose share is now 25%. In order to buy that they will pay $5m cash. They will also free carry Aminex (pay for everything) up to approximately $110m. They will pay for the seismic data collection, the next drill, the cost of infrastructure (building pipelines etc) up to $110m. By the time that Farmout carry is exhausted there will have been multiple wells drilled and production to the tune of millions of dollars to Aminex. The net effect of all that is that Aminex does not have to pay for a thing until they are receiving from gas sales a very large sum of money. That sort of deal is gold-dust to a small company like Aminex. To have raised $110m in the market on their own would have been impossible and if it was possible would have involved the issuing of billions of shares, diluting us original shareholders immensely.

Because Aminex are now debt free and do not have to raise money for their main project (Ruvuma) they are “safe”. A few years back they looked like they might go bust. They have cash in the bank (a few million) and are about to fix their KN1 income stream and receive $5m from Zubair. Compared to the risk profile of the Company when we all bought they are a completely different proposition. Not only is the balance sheet improved with debt paid off but the discovered gas at Ntorya (under the CPR numbers) is enormous.

The next problem the market does not like is the licence situation. On one view (it is not straightforward) the Ruvuma licence has lapsed and Aminex own nothing. But they have met all their commitments under their licence obligations and that being so, the Tanzanian authorities are legally obliged to extend the licence. My understanding is that the licence applied for is for a 25 year development/production licence. With that amount of gas, such a licence is very valuable. There is endless debate around about why the licence has not been renewed. Conspiracy theories abound and the market hates uncertainty. Experience suggests things take ages in Tanzania (you might remember the gas sales agreement delay for KN1). The two Tanzanian gas authorities have already approved the licence application and it is with the ministry awaiting sign off. We now have a clue about when that might take place.

The Farmout requires an Extraordinary General Meeting to approve it. That requires a circular. The circular (I believe) cannot be sent to shareholders until the licence has been granted because until that has been granted there is nothing to farm into or out. The company have said they expect the farmout to be approved by the end of November 2018. Which means the EGM must happen in November which means the circular must come out before that which means the licence must be granted soon.

If you believe the licence will not b

I sent an e mail to the friends (none of them full-time investors) that ask me about Aminex at 7:37 am on the morning of the day it went up 30%. Posting it here in case it is of any use. Just my thoughts. And yes, I am blatantly claiming credit for the rise that day!!

"I have been asked whether I have any thoughts on why the Aminex share price is tanking and thought it is probably time for an update.

Lots of news since the last time I e-mailed.

The share price is tanking because the income stream from the KN1 well has dried up. There is a problem with the pressure in the well and the gas stopped flowing. They thought that it was because of compartmentalisation (the gas is in a pocket in the reservoir) but they now think this is because of a faulty valve and are fixing it. They are also going back into the drill hole to re-perforate (punch holes into) a different part of the drill to allow gas to produce from a different area in the well. This remedial work has been delayed. We can guess at why the delay has happened but what we now know is that Bounty Oil (owner of about 8%) of the KN1 well could not pay their way. Aminex have recently announced Bounty are in breach of their obligations and have absorbed Bounty’s 8% of the licence into their own licence (effectively kicking Bounty out). That has undoubtedly delayed remediation. When the market sees the income stream restored it will mark the shares up.

The other reason for the tanking price (I believe) is the really gross delay at Ntroya in Ruvuma. This is incredibly frustrating, even for a believer like me. If you remember on this licence they drilled Ntorya 2 (N2) in March 2017. The share price went up ten times (from the lows) and hit over 7p. N2 discovered an enormous amount of gas. The changed geological data as a result of that drill updated the basin model and the estimates for how much gas they have were also updated. The estimates are a CPR (Competent Persons Report). The numbers for N2 with N1 are now at approximately 2 Trillion Cubic Feet of Gas Pmean GIIP (not proved) and about 800 Billion Cubic Feet (C2 from memory or in other words more established/proved). Those numbers are enormous. In the North Sea 200 BCF is described as enormous and very valuable and Aminex have multiples of that.

The next drill was meant to be back to back with N2 and was the one I was waiting for. It is called CH-1. It was not back to back and we are still waiting. Why this is so is unknown. I suspect it comes down to licence extensions, funding and other reasons. I do not believe it is the Directors fault though many do if you read the bulletin boards. My suspicion is that our main partner Solo could not pay for their 25% of the next drill.

In the meantime the Major Oil Company that owns 29% of Aminex shares is Zubair. (NB. 29% is the most you can own in a UK company before you are forced by rules to buy the whole company, which triggers at 30%). Zubair not only own 29% of Aminex directly b

A true embarrassment of riches for CERP at the moment.

Emphasis on waterflood. "Told you to Judge me by how much water I pump in because that's how much oil comes out...." 79k barrels of water in 3 months.

Institutions buying.

Glad I topped up on the dip this week.

Very exciting future.

Got some today under 50p. Not been here for a while. Love this story.

GLA

That is probably me done for now. Cash exhausted!

Yes that is a possibility.

Jay B has been undermining the Italian banking system for years, deliberately.

….this is not company specific.

All my stocks are down and most by the same amount.

If you believe in your research and in the company this is a buying opportunity. And I am buying more.

Sorry misheard.

Senior Debt is the bulk. Junior debt (like offtake) and equity raise about equal in amounts.

https://www.youtube.com/watch?v=rFyRjA5EyiI

Hat tip Dan Neale on twitter

Funding will be Senior Debt (Nordic Bond market), Junior Debt (offtake) Equity capital raise and contractor deferral. With the first 2 being the bulk.

"Look at what water we pump in and wait 6 months for that amount of oil to come out" to not quite perfectly quote LK

79000 barrels of water pumped in.

Connectivity already established

Looking at the next well for waterflood already.

It is working.

One thing I am finding with CERP is that there are so many facets now that it is difficult to keep up!!

And I had forgotten that point Vmax (deeper Goudron sweet oil). I knew that Goudron was more important than others have been talking about but did not remember why!!

So thank you.

Good luck for the morning CERPers.

Bought more. Just over 1m over 3 trades. Will buy more when I can.

Garnheim

From memory from the recent interims about 400k left on the loan

Plus the new drawdown announced yesterday

Captain

Apology accepted.

ATB

;)

CaptainSwag:

"There was no mention of this before - and what remuneration do we get from this additional expense? should it have not been knocked off the purchase price? or bought talon with the two rigs?"

The first sentence above is at best inaccurate.

Re the second sentence, how do you know it was not included in the negotiation and "knocked off the purchase price" or otherwise dealt with?

Perhaps you think Leo missed it. Despite putting the liability in the RNS?

Carpadium on ADVFN and now Captain Swag here.

We were told about this liability.

My post on ADVFN repeated:

Carpadium said

"....none too pleased to see a third of the LIND 'insurance' money spent repaying a loan we didn't know existed. This should be repaid to shareholders by way of modifying the original deal terms...."

The reality is that the RNS announcement of the 13th July said this:

"For the financial year ended 31 December 2017, the Steeldrum group had US$13.7 million in assets, US$8.36 million in equity, US$5.36 million in liabilities (including a US$1.25 million loan repayable in 2020) and made a gross profit of US$0.83 million and net loss of US$1.96 million (after depreciation charges of US$1.56 million)."