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Yes, looks to be with the first two years and at 140 scuffs per day that is $35 million per year, very quick payback.

And again using ARA's own figures, they expect to recover 777BCF over the license term which equals $2.3 billion, so they got 50% of that for $105 million, not a bad deal. But is also means our 25% generates $580 million over the same period. Again all best estimate with significant upsides built in to the projections.

Very interesting Chris:
So drill CH-1, 3D seismic, construct EPS/Pipeline to deliver gas, deliver first gas at a minimum of 40 MMcf/d in just over 1 year. Net to Aminex this Minimum rate represents approximately $12 million p.a. of fully carried cashflow. Increased production will secure and generate significant future cashflow. If needed Ruvuma CAPEX to be paid from self generated cash flow.
So we have real figures post EPS our 25% is worth a minimum of $12 per year and probably more and the plan is for gas to be flowing in just over a year. I would like to see a full breakdown of the ARA £35 million figures.

Hi macgregor, you are a LTH and that is good enough for me. When you meet the board members, Neil is the Geologist who understands what will work and what won't from a drilling point of view. His retirement convinces me the company will be not look at new opportunities and will instead "cash-in" what they have.
Starting in reverse order, Helium 1 is worth very little until an IPO or some other sort of value can be put on it, nominally one or two million. The hope is a good IPO could really improve the value of our holding.
HH is more interesting, if the oil flows as is hoped there is real value there, we have 9.75% so if our percentage of the flow is say 30 bpd that is around $2,100 / day or $750,000 / year and easily saleable. The flow rate may be up or down on that figure and oil prices seem healthy so I would welcome opinion but would guess it’s an asset worth at least £6 - £10 million.
Finally, the crown jewels Ruvuma, there was some discussion at the time of the Aminex RNS about the value of our share. It is clear the Zubairs have played their cards well and taken two thirds of Aminex's main asset for very little money. The figures remain they committed to $105 million spend for 50% of the asset ($57.5 million per 25%). Others suggested that the $35 million they planned to spend on the Aminex free carry should be taken off this to make the value $22.5 million. I disagree strongly with this on two counts firstly we have no provenance on the $35 million figure which is solely from ARA who are hardly neutral in the this, secondly Aminex is 30% owned by the Zubairs and this would have restricted the negotiations.
As it stands I believe our Ruvuma holdings are worth much nearer the $57.5 million figure than the $22.5 million figure (our 25% still represents $500-750 million gas in the ground). The Aminex deal with ARA completes in two months or so, after that I expect the project to move very rapidly with license and drill happening “magically” quickly. Every step we take nearer to production the value of our share increases significantly. If we hang in until after a successful drill then the asset is worth significantly more. If we sell to the Zubairs then yes it will be a very difficult negotiation but equally they will be keen to get rid of us or stop any new partner getting involved. I am moderately optimistic on our chances and I personally think this asset currently worth £30-£40 million again I would welcome opinion but clearly the nearer we are to production the more that value increases.

StoneFold I fully agree, the further down the line and the closer we are to the gas flowing the higher the value of our 25%. I do not believe selling a share for a free carry works for where we are as a company I think Solo need to cash in the lot.

For what percentage? I think we can do a lot better than Aminex, the gas in the ground is worth 10 or 15 times that plus I take the $35 million development costs with a pinch of salt, it does come from ARA remember.

Our monthly servicing of the loan arrangement.

Hi macgregor, this a RNS, the board making a public statement which they cannot reverse without making a similar RNS and facing the opinions of their shareholders. I believe we are seeing the the beginning of the end for Solo. The assets will all be sold, the cash returned to the shareholders and the company cease to be. In truth its probably now as much in the boards interests as the shareholders. The real game is to maximise the money we get for the assets.
The Aminex RNS strengthens our hand as it accerates the speed of the development and makes the calculation simpler. Yes the Zubairs are in a strong position they got a cracking deal, for $105 million they have 50% plus they also own 30% of the 25% Aminex's free carry. For Aminex they were able to argue from both sides being by far the biggest shareholder, I certainly would have hated the deal if I had any Aminex shares. With Solo they have no such leverage and todays announcement of looking at alternative financing is precisely what I want Solo to be doing.
I would also like to understand what shareholding you and the others quoted are holding. Kejolo by his own admission holds no shares here and yet has posted 31 times in the last 30 days only Solo issues always negatively telling us doom and gloom. I am happy with free speech but I need to understand what your particular motive is.

Hi John, the bid and ask bear no real relation to the price. If you look on the L2 there are five market makers on Solo four have buy set at 2.4 and three have sell at 2.9 and 2.65 is merely the mid point between the two figures. It is nearly always the case that you can buy under the ask and sell above the bid (the names say it all, bid and ask). The spread is significant in that it generally increases when the stock is moving up or down rapidly.

I was at the meeting with Chris and Simon and looked into their faces as the Aminex RNS was announced. This really does change everything. ARA are acceleration the work at Ruvuma and it will be in production and producing money very quickly. The Aminex RNS also spelt out the long term cost of $35 million per 25% share.
We have two options sell now for what we can get or find a way to fund the cost and reap the long term reward. We know from the previous proven reserves there is $2-3 billion in the ground so the equation to take to the bank is cash now for a 10-20 times return over the next 15-20 years. That looks sellable to me and once in place will be worth a hell of a lot more than any $20 million.
Oh and HH is producing and our market cap is under 14 million. Our message at the two meetings to the board was clear, forget any new investments, we have the assets get them monetarised and get that money to the shareholders, it appears from todays RNS as if they are finally listening.

I fully agree with OG_newbie if the RNS showed anything, the Zubairs want to accelerate development and get this into production as soon as possible. They have taken AEX out of the equation and I do not believe they will want and sit around while Solo raise funds via open offers and the like. A deal has to be there to be made.

Regarding the AEX farm out it has to be remembered that the Zubairs already owned 30% of AEX which would have given them a significant influence on both sides of the deal. I am not a AEX shareholder but I personally think its not a great deal for them. I think its a fantastic deal for the Zubairs who for $105 million get revenues of many hundreds of million dollars.
How Solo play it from here is uncertain, my guess would be a percentage for a free carry but it going to be an interesting few months on top of the events at HH.

They are spending $105 million to receive 50% of the revenue and Aminex keep a 25% free carry. The value of the gas in the ground is $2 - 3.5 billion so Aminex's 25% free carry could be worth $500 to $600 million less over the term of the development license.
If Solo sell their 25% they lose the future value so it has to be worth a lot more that the $20 million. Extrapolating the AEX deal we could probably sell part of our share and get a free carry ourselves.
The Zubairs clearly think spending $105 million on 50% will generate a lot of revenue for them over the next 25 years. Maybe Aminex didn't get that good deal?

Only AEX we still have 25%

Remember the value of the gas in the ground is $2 - 3.5 billion so Aminex's 25% free carry could be worth $500 to $600 million less costs.

I repeat, they are spending $105 million to receive 50% of the revenue therefore 25% of the un-carried revenue has to be $50 million.
Aminex for 50% are getting $40 million plus keeping 25% of the revenue, if we sell our 25% we loose the revenue so the value is significantly higher than $20 million.

Hi Gavdude, so for $105 million spend the Zubairs get 50% of the revenue, what is our 25% of the revenue worth?

It's all there in the RNS, Aminex get $5 million plus a free carry on all the costs estimated at $100 million and still keep 25% of all profit. Whichever way you cut it our 25% is worth several times our current market cap.

So the numbers are clear. The Zubairs are happy to pay $105 million for a 50% working interest in the Ruvuma PSA. This values our un-carried 25% at around $50 million. Add to this 10% of HH which is just starting to flow real saleable oil and the 15% of the Helium1 IPO due at some stage. Assets are assets and there has to be a correction at some stage with a current market cap of £14m.
The Zubairs as with all billionaires are clearly rubbish at spotting a good deal when they see one.

We need to get to an acceptable monetarisation offer and not just take the first offer that comes along and it was interesting the post Chris did on the relative values of UKOG and AEX. If we need to wait another 12 or even 24 months then the drain on cash from the ongoing costs, specifically salaries becomes a serious issue. I would like to understand the revenue issue fully i.e. from HH and KN1 first and that can frame Solo’s budget for ongoing expenditure on costs and salaries.