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Estimated profit example for investing £100 in each of the seven Horse Hill companies.

6.

For the sake of this calculation the other value remains unchanged.
Following a successful EWT, confirmation of commerciality and recoverable reserves, and Near to the start of production the new value of HH by my estimate would be £100 million.
This would give an increase figure for the value of the HH part of the £100 invested. From which a profit figure can be produced.

Ticker == new HH value £ == Other value £ == New Total £ == Profit £

DOR == 134.34 == 58.66 == 193.01 == 93.01
SOLO == 82.80 == 74.52 == 157.32 == 57.32
ALBA == 69.41 == 78.64 == 148.06 == 48.06
PRIM == 69.59 == 78.59 == 148.18 == 48.18
GUN == 59.16 == 81.80 == 140.96 == 40.96
UKOG == 28.70 == 91.17 == 119.87 == 19.87
TELL == 2.45 == 99.25 == 101.69 == 1.69

Only for entertainment - DYOR

For calculation detail see post HH profit estimate 24-07-2018 15:55
on the SOLO board

http://www.lse.co.uk/ShareChat.asp?ShareTicker=SOLO&thread=B1ED39D9-EAAD-4229-9F92-64192A4D1E0D&status=reply

part 2)

1)
Ticker == Shares issued == Current share price pence

DOR == 50,420,109 == 9.596
SOLO == 471,953,594 == 2.495
ALBA == 2,848,614,934 == 0.595
PRIM == 2,796,619,343 == 0.167
GUN == 4,882,924,490 == 0.045
UKOG == 5,207,240,526 == 2.17
TELL == 240,520,000 == 594.376

2)
Ticker == % of Horse Hill that each company owns

DOR == 6.5
SOLO == 9.75
ALBA == 11.765
PRIM == 3.25
GUN == 1.3
UKOG == 32.435
TELL == 35.0

3)
100% of Horse Hill was last valued at £30,769,230 when SOLO bought 5% of HHDL for £1 million.

Ticker == Last value of Horse Hill that each company owns £.

DOR == 1,999,999.95
SOLO == 2,999,999.93
ALBA == 3,619,999.91
PRIM == 999,999,98
GUN == 399,999.99
UKOG == 9,979,999.75
TELL == 10,769,230.50

4)
For each company the mcap. is made up in part by the last HH value and by the other value of projects/assets that company holds.

Ticker == mcap £ == Other value £.

DOR == 4,838,313 == 2,991,590
SOLO == 11,775,251 == 8,326,894
ALBA == 16,949,258 == 11,192,797
PRIM == 4,670,354 == 4,033,914
GUN == 2,197,316 == 1,553,169
UKOG == 112,997,119 == 114,993,772
TELL == 1,429,593,155 == 1,436,150,985

5)
If you now buy £100 worth of shares in each of the seven HH companies, that £100 would consist of:

Ticker == last HH value £ == Other value £

DOR == 41.34 == 58.66
SOLO == 25.48 == 74.52
ALBA == 21.36 == 78.64
PRIM == 21.41 == 78.59
GUN == 18.20 == 81.80
UKOG == 8.83 == 91.17
TELL == 0.75 == 99.25

6)

For the sake of this calculation the other value remains unchanged.
Following a successful EWT, confirmation of commerciality and recoverable reserves, and Near to the start of production the new value of HH by my estimate would be £100 million.
This would give an increase figure for the value of the HH part of the £100 invested. From which a profit figure can be produced.

Ticker == new HH value £ == Other value £ == New Total £ == Profit £

DOR == 134.34 == 58.66 == 193.01 == 93.01
SOLO == 82.80 == 74.52 == 157.32 == 57.32
ALBA == 69.41 == 78.64 == 148.06 == 48.06
PRIM == 69.59 == 78.59 == 148.18 == 48.18
GUN == 59.16 == 81.80 == 140.96 == 40.96
UKOG == 28.70 == 91.17 == 119.87 == 19.87
TELL == 2.45 == 99.25 == 101.69 == 1.69

7)
This gives the implied new mcap. and new share price

Ticker == mcap. £ == New Share Price pence

DOR == 9,491,590 == 18.825
SOLO == 18,076,894 == 3.83
ALBA == 22,957,797 == 0.806
PRIM == 7,283,914 == 0.26
GUN == 2,853,169 == 0.058
UKOG == 147,428,772 == 2.831
TELL == 1,471,150,985 == 611.654

Only for entertainment - DYOR

With thanks to Sambo12 ( lse AEX)

"PART 1 -

Yes, BG I think the reason for the lack of info at the AGM was that the farm out was actually negotiated right up to the AGM and agreed last minute. That's the impression JB gave.

He also stated that the farm out negotiations "damn near killed me", and it seemed like he meant it! Say what you like about JB's skills etc. I do believe that he has put his all into this farm and in the circumstances that it is the best deal available to AEX.

The real reasons for the lack of progress on KN1, and the drilling of C1 were not explained. However, I get the impression things have been far from easy for AEX. Therefore, being able to secure a farm out with a major player in the region with deep, almost bottomless, pockets and significant clout with the Tanz govt should be seen as a major achievement for Aminex.

Jay explained, that the previous AEX model was at best - 'drill, evaluate, pause (usually a very long pause knowing AEX), fund, drill... and so on'.

I personally believe that TPDC or more likely the Tanz govt didn't have enough confidence in AEX being able to push forward the development of the full field at Ruvuma in a time-frame anything close to that which is required to meet the upcoming demand curve.

They simply don't have the power, money, people, experience etc. to make it happen. hence my belief that the farm out is just as much Tanz govt driven as AEX driven. But whatever the driver, I firmly believe it's the right thing to happen. And that it will see major shareholder returns over the next 2 to 5 years.

Some of the key points I noted down are as follows:

1. Previous AEX model was to drill one well, pause for a long time, evaluate, raised funds and start the cycle again.

The result of the farm out will mean that the model will change to:

> Drill one well (C1) then shoot 3D seismic almost immediately afterwards or at the same time
> Towards the tail end of the 3D, build the EPS
> Straight of the back of the 3D, a 3 to 4 multi-well programme will begin!

Things will now hopefully happen very very fast. ARA are not messing around. They want to move fast and AEX have a free carry over the first stage of this progress up to the EPS.

2. 40 scuffs is the absolute bare minimum for the EPS and should be much higher than this in reality.

Even at 40mmcf/d then AEX stand to net $12m pa net cashflow, for no cap-ex!

3. Full field development of Ruvuma looking to generate 140mmcf/d (which I think is again the minimum expectation) which from my estimate would be around 2025.

At this point, if my notes are correct, then JB would expect AEX to net $25m to $35m pa from the field.

The field life looks estimated to run to around 2049; so almost 30 years life from the start of the EPS.

I estimate a period of around 15 years at the full rate of up to $35m pa net cash flow received! "

The $35m is only the final balance of the $40m total payment from Zubair to AEX in exchange for the farm out of 50% of the Ruvuma PSA.

It is not the exact future development cost required for a 25% interest in the Ruvuma PSA, to reach the minimum production target of 40 MMcf/d.

It is a red herring to imply that $35m = 25%, $105 = 75%, $140m = 100% - because that is not what the development will cost.

The actual figure will depend on the influence and negotiating power of the Zubair's (likely to be better than AEX's).

The proposed farm out gives AEX an incentive to not spend any money now on developing Ruvuma, but to wait until the farm out deal is finalised (expected to be completed prior to 30 November 2018).

So it is likely there will be pause while:
The Farm-Out is approved by Tanzanian government and Aminex's shareholders.
The new operating company ARA Petroleum Tanzania Ltd is formed and staffed.
Licences and well-site planning approvals and drilling permits are applied for and awarded.
Drilling rig tender reviewed/restarted by the new operator.

So there might not be much of a need for development cash until late December 2017.

Then SOLO would have to find money to reimburse the operator for 25% of the costs for:
Well site preparation work (small)
Drilling one well CH1 ($ )
If the CH1 well finds gas/oil then completing for production and testing that well. ($ )

Possibly by March 2019, (after Government approvals and planning permission granted) SOLO would have to find money to reimburse the operator for 25% of the costs for:
Tender then work on Cleaning /Re-completing if required three wells. ($ )
Tender, purchase then work on tying three wells to (a new metering station and oil separator if required) at Ntorya. ($ )
Tender, purchase then construct a pipeline (approximately 33 kilometres long) for raw gas from the Ntorya metering station to the Madimba gas processing plant. ($ )

Between January and December 2019, SOLO would have to find money to reimburse the operator for 25% of the costs for:
Tender, Acquire, process and interpret 3D seismic over a minimum of 200 km2 within the Ntorya area ($ )
It would take approx. a year from seismic starting to having full detailed interpretation available for planning future drill targets.
It would take a further year to get planning approval and tender for a rig to drill any future wells.
So how soon the 3D starts would give an indication of how quickly those additional wells are (wanted for expansion)/(needed for replacement).

SOLO would need to show that it has arranged a facility to obtain funding to satisfy the cash calls that will arise.
But it would only need to actually draw down each part of the funding to meet each cash call, if and when each stage of the project is reached.

Solo may sell part or all of their interest at some stage, if/when another investor seeks to hop aboard the project, but that investor would have to pay more at

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