Malcy says buy AEX6 Nov 2017 13:25
Aminex
AEX is down this morning after an announcement that has spooked the market regarding gas production from Kiliwani North-1. Following a power outage a few days ago in Dar es Salaam gas demand fell and has reduced flow rates to around 1 mcf/d and their is some technical validity to the thought that the well is draining a compartment within the Greater Kiliwani North structure and �exhibiting slow recharge�.
Solutions include installation of compression facilities, which should boost production at minimal cost, in the meantime the current, lower production should have beneficial effects on maximising long term recovery and better reservoir management.
AEX has no debt, cash in the bank and whilst problems at Kiliwani North are irritating, investors should be concentrating more on the Ruvuma PSA where a 25 year development licence has been applied for. It should be noted that the announcement from Solo, who are not the operator, is probably slightly more accurate and that a 20% fall in the AEX share price is way overdone and an opportunity to buy some cheap stock�