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Scirocco up strongly. Not heard any rumours of their Ntorya sale process. Have they sold it to a big payer? Aminex up. Some buys coming now. Something happening? Is this why the delayed the finals?

Is it on the back of HE1 rise??

What's the news? Have they sold Ntroya to WEN for $20m?

So merging with Columbus was not a good idea? Finally drilling Perseverance was not a good idea? Recapitalising the company is not a good idea? Renewing licences and farming out The Bahamas to monetise the asset is not a good idea?

https://dailynews.co.tz/news/2021-04-276088534fb7137.aspx

They did a deal with the drill contractor to drill S2 for free in return for 75% production revenue and then once they recovered their costs the 75% production reverted back to CERP.
RBL is reserve base lending. Existing reserves have approx $10m borrowing capacity. As reserves increase through new finds, the RBL capacity increases.

RBL, prepayment for future production, farmout, drill for equity. Money from these sources.

Funding post consolidation will mainly come from the convertible loan (£10m) at 8p. See Resolution 5 giving authority to allot shares at 8p. Note this is a resolution that if passed will be the price that shares can only be issued at (8p) otherwise another general meeting will be needed with a new resolution. Non dilutive funding can come from prepayment of future oil production, RBL, farmout proceeds.

Resolution 5 is unequivocal and important. Gives authority to allot shares at 8p.

Of course everything is dependent on the authorities signing off on early field and full field development, however if gas production figures as per the farmout agreement did not materialise, then APT will evidently forfeit their interest., or still be liable for payment. They don't just get to keep 50% of Ntorya and not commit to get the gas out. There is always a non performance bond or forfeiture clause in farmout agreements, otherwise partners can just sit on unpaid assets and do nothing with them and not meet obligations, which ultimately leads to a loss of a licence. If these performance bonds didn't exist then every oiler who farmed out their licence to a partner to carry out the operations would go bust and, it would be a good way for peers to get rid of the competition or pick up licences later on.

Terms of the farmout are to:

Establish an Early Production System to achieve accelerated first gas to a minimum gross rate of 40 MMcf/d (equivalent to approximately 6,700 bbls/d)

Fully carry Aminex for its share of costs up to $35 million in respect of its remaining 25% interest (post-transaction) (the "Aminex Carry"), which implies a potential expenditure during the carry period of up to $105 million for the aggregate 75% working interest held by APT and Aminex ($140 million).

In the event that the minimum production target of 40 MMcf/d is achieved prior to Aminex's 25% interest having been carried for the full $35 million, APT will assign one quarter of its share of profit gas to pay the unspent Carry amount until the full $35 million is realised by Aminex.

Obviously this is to ensure that Aminex receive the full Carry amount of $35m if APT make cost savings. If non the above is achieved then the full $35m becomes due or the 50% will revert back to Aminex depending on the reasons for non performance. All farmouts as a general rule have a performance bond as standard.

Just to add, total committed spend on Ruvuma by Zubair is $140m which is a huge amount for a small company like Aminex to be part of.

CrustyPete, technically Aminex have not yet been paid by Zubair for the 50% of Ntorya. They owe Aminex $35m. They have agreed to do seismic, drill and bring the gas onstream to a minimum of 140mmcft per day. Obviously if none of this happens then the $35m must be paid in full as money unspent as per the terms of the farmout. The Zubairs will not be getting 50% of Ntorya for nothing, in the hope Aminex went bust. Aminex could have said lets have our $35m right now and put it in escrow account and we will release the money back to you as you carry out the work programme. But the farmout is legally binding, so in essence it is as good as money in the bank. The market is grossly undervaluing Aminex and effectively giving a zero value to the gas. That's got to change. When the market wakes up it will be pretty quick.

Pre-payment for future production is a type of funding where a company has an oil or gas asset. Zubair have signed up to producing $140mmcft per day and effectively owe Aminex $35m. As operator of the licence, Zubair has a responsibility to get to gas production in a timely manner. They can't just sit on the licence and do nothing. Even if they walked away or the licence was not renewed, as operator and responsibility for fulfilling the obligations of the licence, they still owe Aminex $35m.

The plan is three gas wells on production and early field development so they won't have to wait until 2024. Final full field development will come later so Ara meet the 140MMcft a day target as stipulated by the farmout. If this is not achieved then Aminex are entitled to a reimbursement from the unspent $35m.

The plan is three gas wells on production and early field development so they won't have to wait until 2024. Final full field development will come later so Ara meet the 140MMcft a day target as stipulated by the farmout. If this is not achieved then Aminex are entitled to a reimbursement from the unspent $35m.

Costs associated with The Bahamas and closing out Perseverance 1 are about $4.5m this includes licence renewal costs.
4.2
(e) completion of negotiations in relation to licence renewals in The Bahamas and completion of invoicing, payment scheduling and resolution of disputes and final settlement of estimated costs associated with the completed drilling of Perseverance #1, such that the aggregate amount of cash payments required in respect of licence fees and ‘close-out’ of Perseverance #1 are consistent with the description in Section 4.1 above (approximately $4.5 million).

icemax, if they can prove saffron 2 will lead to future development because the well produces 200-300 bopd then the other non dilutive funding alternatives will be available, such as pre payment funding or RBL. Sentiment will change then.

Could be a boon if they've had the nod and wink from the institutions at the placing at 0.35p with existing shareholders taking only some of their entitlement (say 30%) If they get it away and drill a successful saffron 2, then sp will go from 3.5p post consolidation to 10p. It's a risk but more calculated this time if the board have done the necessary checks.

Haha, no post consolidation, although 3.5p is the open offer equivalent. The 8p anticipates the Saffron well result which if successful will probably see the sp in double figures hence the 8p.. aimho