Member Info for grsshaw

Maybe true CrusyPete, but looking on the positive, what if they have obtained approval to perf the lower section?

It appears that AEX still have cash in the till and are still due $330k on monies not paid as yet (which I still don't understand why they have not received this following the 6 equal payments following the farm out date - should have been April!) are we now charging Zubair's interest on this outstanding money at 13.9% I wonder!!

They also have that $1.7m loan available (with no details as yet!) and you never know that if things start to move quickly, they now have the facility to invest! My take is that they don't need the $1.7m for a while yet and maybe not at all if they receive some of the monies owed. I feel this situation of withheld payments will be solved in the next few months at the latest - whether we all like the outcome is another matter!

Lets see how it goes, but I'm feeling confident that things are about to change CrustyPete and I'm looking forward to see what your response is when all this finally happens :-)

If I'm wrong you can have the bragging rights certainly but I guess we will both remain invested either way!

Hello CrustyPete,

I also believe that this has to do with gas demand (rainy season last year last pretty bad, meaning less demand for Gas) and WEN's production was down due to this which is covered in a RNS. WEN also have a take or pay agreement and this maybe ONE of the reasons (as there maybe several why there was a fall out with AEX) I couldn't see them taking gas from both companies supply against lower demand and then having to pay WEN for gas not even taken!
We also have a different situation at the moment - rainy season is not as bad as pervious years meaning higher demand for gas and WEN are at near full production, in fact, if I remember one or two of the months early this year they supplied over their stated capacity. I wonder what would happen if all of a sudden they needed more gas and WEN are at full production. I bet that's not happened for a while!

You may be right Bagga018 re the burn test bit they did say later this year

An update on the emissions and permit would a good place to start and to Gert lumberton operational - plus provide an update the review re Lumber activities.

but they may not need to raise monies at the moment, but it was mentioned in the last update

This may drift to 0.50 in the very short if buyers do not appear!

Would be a good time to update your shareholder AEG to provide some confidence that all is still okay after such a large sale over many months!

They did this some time ago before the CLN's and placings. Assuming AEG will now come to the market with a placing/cash call and Gravendock will probably subscribe (again like they did last time)

Assuming when looking at price the placing/cash call will be below 0.60. They managed to sell the most shares at the poorest price and they have been selling for over 4 months (hardly seems fair they are allowed to keep selling until they have completed their total sales transaction before updating the market)

Might actually help the short term share price if the seller has now finished - unless others follow suit!

Good luck all

It's clear that TPDC are able to pay their invoices. Maybe WEN are just more robust about asking for payment

I think it also helps that TPDC has a share of their business

so icecreamoil was my post and posted when logged in to my account

I am not sure how this as happened but seems to be back to my account now!!!

who the hell is icecreamoil - test post as not sure what is happening here

grsshaw!

From WEN update - 15th June 21 - see two points below - be interesting to see how long it takes for TANESCO to sign these off and pay their outstanding monies.

If I remember WEN has been okay with on time TPDC payments but struggled with TANESCO payment for a while! Im also interested to see what the revised changes are on the GSA terms. Its been three weeks since the update!

1. TPDC remains fully current with all invoices for gas sales

2. TANESCO outstanding receivable of $1.7 million (net to WEN); revised GSA terms now agreed and awaiting TANESCO Board approval clearing the way for payments of arrears to commence

Coincidence that the two tax disputes are for the same value?
As disclosed in Note 24, the Group received a tax assessment from the TRA of US$2.2 million in relation to an audit covering the period from 2013 to 2015
During the year, the Group completed the Farm-Out of the Ruvuma PSA to ARA Petroleum Tanzania Limited realising a capital gains tax charge on the transaction of US$2.17 million.

Licence Extension is still valid so unless we hear otherwise the licence extension shouldn’t be the reason for any delay!
Taken from the report "It is acknowledged by the Group that the full work programme has not been completed during this one year extension period and therefore APT, as operator, has applied for an additional extension as permissible under the current legislation. As the Ruvuma Joint Venture awaits the renewal of the Licence, it remains valid until otherwise advised by the Ministry"

End phew!!!

I have a few more observations from the report

Want to move to a non-operating position to reduce costs
Taken from the report 'We believe this non-operating position suits the Company’s strategy to remain flexible to opportunities whilst continuing to significantly reduce costs. The Company sees this as a very real option for its other assets which it believes will add shareholder value while simultaneously reducing risk'

Monies owed – check out the last part about Tanzania to secure further investment and gas development – just wonder if ARA are delaying their investment in the work programme because of this dispute and want this sorted
Taken from the report 'The Company continues to hold robust discussions with the Tanzania Petroleum Development Corporation (“TPDC”) in seeking resolution of the outstanding payments for past gas sales from the Kiliwani North development licence. Both parties are aligned in the acknowledgement that these matters need to be resolved satisfactorily for the benefit of the local gas industry and to enable Tanzania to secure further investment and upstream gas development'

Cash at 31st December 2020 was $450k, AEX received $990k since (we don’t know how much of this they still have though) and still have $330k to receive from ARA, so they don’t need that loan money for a little while yet. So looking at total money on hand/still owed for ARA from 1 Jan $450k + $990k + $330k = $1,77m – this should take them to Dec 21 if operating costs are on target to be under £1m ($1.4m) per year!
Taken from varies parts of the report
'Since 31 December 2020, the Group has received a further US$0.99 million of Interim Costs due from ARA Petroleum LLC, a related party of the Group (see Note 27), under the Farm-Out. The outstanding balance as at 30 June 2021 is US$0.33 million.
The balance of net cash and cash equivalents at 31 December 2020 was US$0.45 million (31 December 2019: US$0.69 million).
On 22 October 2020, the Group completed the Farm-Out of the Ruvuma PSA to APT. On completion the interim costs of US$1.97 million became due in six equal monthly instalments commencing on the date of completion. US$660,000 was paid during the year, and US$1.32 million was outstanding at 31 December 2020'

Very supportive corner stone investor – owns just under 30% of AEX and they own 50% of the Ruvuma asset also.
Still has cash owed from ARA at $330k owing – 30th June 2021 – not sure what they have in the bank now though, but they don’t need that $1.7m loan just yet!
12-month minimum cash flow secured ($1.7m) – no details re % interest or when will be required though.
Debt-free currently – subject to the $1.7m v monies owned.
Farm Out/free carry at $35m which will get AEX to first gas with potential of some of that cash returned subject to who pays for the pipeline.
Already a good chance the current asset has increased subject to 2D interpretation.
3D to start hopefully very soon!
3D will then be analysed which may firm up the 2D interpretation or increase even further, plus assist with the drill location for appraisal and exploration and may even find oil.
Potential to earn $40m per annum at full field in the future years - doesn’t include potential for oil.
Monies owed – which will need to be sorted soon if the government keeps to pro-business.
KN1 Asset 64% and operator which may be back online soon with approx. $250k investment – subject to monies owed.
Letter of Credit will now be requirement an any new PSA agreement – they haven’t got one in place for KN1.
Kiliwani South PSA – looking likely they will look to farm out percentage and not be operator.
Nyuni PSA looking likely they will look to farm out percentage and not be operator.
G & A costs reducing and under control and targeting as non-operator.

Of course there are still risks like any share investment but most of this will be down to further delays and government U-turns etc..

All in my opinion and based on my own personal situation with regard to investment time cycle and expected ROI – please do your own research and base on your own circumstances! This is not investment advice.

My take and a few observations to follow:

After carefully thinking about the delays and the update provided, I am quite content with the situation and happy to wait that bit longer now that the cash flow is sorted for another 12 months

Zubairs corp are in full control and they own, in real terms, 58% of the Ruvuma Asset
2D review interpreted differently than previously – is this down to understanding, more experience or spending additional time properly analysing the data. I am pleased they did spend time, as it potentially increased the total asset by a large number. Following this result will this now mean they spend even more time and focus on moving this forward and will this catch the eye of the government and maybe highlight even more how large and important this asset is?

I am more than happy to wait a little longer if it means the work programme is carried out to provide the best outcome possible and reduce risk. It may also mean that there is a higher probability they will hit oil when reviewing the 3D data

Some investors will say I can put my money to better short-term prospects and come back later nearer activity. That’s great if they are successful to consistently pick short term shares and make a profit – note, it doesn’t always work that way and you could put your money into short term poor performing shares (with poorer fundamentals), especially if you are momentum trading! Might even lock up your cash and miss out on other opportunities!

Some say Zubair’s are messing about and want AEX and SCIR on the cheap. Clearly in AEX case they have fully supported and done everything they could to help AEX out. So, I totally disagree on this point being made and I am more than happy with their continuous support and access to cash if required.

Fundamentals are very strong with the main downside being the result of a government delaying things, not signing off approvals and messing about with monies owed. If this does change as per recent news and updates then this will be a massive sentiment change

If you look at this and forget all the past (easily said than done I know!). It looks like a no brainer if you look at it as a minimum of 3-year investment. If you invest today, you are investing in the following:

More to come

'In his outlook statement Santos said that the company will be fully funded for its current activities, while relying on nearly US$2mln in payments due from ARA Petroleum to help with working capital requirements'

So no details are available re this loan - the statement above is very laid back but why haven't AEX explained how this loan facility works. It is interest free, is at 15% etc.. seems informal type agreement

Yes, all good thanks cperkin, hope all is good with you?

This asset is getting bigger and there are plenty or opportunities to see if this will increase further with 3D plus the chance of oil with the drill!

If the Zubairs see value, which I believe they do, what is stopping them from taking it all 100% private! I am still not sure what the appeal if by having a LSE listed company if they can't acquire anything as all they have is an asset but no cash flow! The Zubairs might as well buy WEN and receive a nice divi while they are waiting plus $20m in the bank
Im expecting some news flow in the next few weeks re the 3D as I feel they were very close to obtaining approval but ran out of time!

Lets see, but good luck all

This time in 2036 Rodney, we'll be millionaires :)

I would be more than happy with that ShouldveSold - a little bit early TBH for my SIPP but I will take 2036 yes please :-)

"Happy with the resource upgrade, the price for Ruvuma just went up beyond the $20 million. 3TCF and 2TCF recoverable"
cperkin,
I guess this takes Zubair's out to buy SCIR 25% then! Why would you advertise the potential additional gas in place and then pay for more for the asset!

If WEN are in the running to take the 25% or part of it they must be pretty sick now the price has just gone up. In fact if someone had purchased it by now, it would have provided more time to raise/earn the required funds for the work programme and they would have received some good news about the asset potentially increasing ! I still believe SCIR will sell their % before the 3D starts!

This may also mean they may review the CH1 drill location also - 3D data will be very interesting!

https://www.energyvoice.com/oilandgas/africa/ep-africa/334345/ara-chikumbi-1-seismic-drilling/?utm_source=Sailthru&utm_medium=email&utm_campaign=Energy%20Voice%20-%20Daily%20Newsletter%202021-07-01&utm_term=Energy%20Voice%20-%20Newsletter

'The operator opted to push back the well in order to gain the insights from the seismic'

According to this comment ARA made the call to delay - I wonder if they have delayed it slightly due to findings from the 2D data review? I guess we have to remind ourselves this is a $140m spend and being managed by a big industry player - a few months delay is nothing to ensure they obtain the best results from the full work programme!

Yeah, you would have obtained a better price for some of the volume - but its supposedly not stock market etiquette.

I have been told off for many times for spitting trades quite a few times, but I always challenge my brokers that etiquette is certainly not followed by the big boys so don't expect me to!
Anyway you still obtained a good price for the volume purchased. If you did purchase in blocks you may have ended up paying more for top end volumes

Good luck with your purchase bigpat!