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Hopefully people will wake up soon and realise that, sad it is, the current situation in Russia/Ukraine has no negative impact for Aminex. Oil and gas prices rising. Countries around the world will be looking for sources of gas other than Russia. Operations in Tanzania are not going to be affected.
Yes, I agree about KN1 not being the big prize for a JV there. As for whether Aminex may try to get some production back up and running at KN1 themselves, I think it’s a possibility as I believe it would be pretty low cost. However, I agree that Aminex may now lack the operational capability and may not want to risk spending money on this when the main goal is probably to retain enough cash to get us through to first gas from Ntorya. Time will tell!
Existing GSA to 2036, potential new targets identified and proximity of Songo Songo plant with spare capacity to tie into would all be attractive to potential JV partner (not talking about KN1 remediation specifically here).
My guess is that they are discussing with TZ authorities and potential suitors and it is taking time partly due to pending Nyuni license.
I think we’ll hear something in next few months
Hi Tanzania, nothing to worry about. The Omanis own about 30% of Aminex. They’re not going to sell to anyone on the cheap (and if they wanted to take Aminex out cheaply themselves, they have had ample opportunity and not done so)
More interesting news today. The government of Qutar and Jenkins Energy Group are about to go on a $15bn spending spree of African gas assets.
Some key quotes from the article:
“the move, which is to invest in the huge but largely untapped gas reserves in Africa, will see Jeniks Energy Group leap frogged to a global gas investment firm”.
‘‘Some of the key areas of focus by the Qatar government Investment include the Gas Reserve Acquisition, Liquified natural Gas and LPG projects across the 11 countries of Africa – Nigeria, Ghana, Kenya, Republic of Congo, Guinea Equatorial, Senegal, Gabon, Angola and Tanzania.’’
I can’t see She’ll or Equinor wanting to sell any of the offshore asset now that things are finally progressing for them.
So, which huge and largely untapped gas reserves in Tanzania could they be interested in?
Link to the article:
https://leadership.ng/stakeholders-commend-energy-group-qatar-partnership
Quite shocking to hear that Dar Ed Salaam is about to endure a 10 day power cut because of works to expand Kinyerezi I power station. The power situation sounds pretty desperate.
With Kinyerezi being expanded from 150 to 335MW this year and Umbungo III from 60 to 112MW, that’s about 240MW of additional gas fired power that is about to come on stream.
With limited supply headroom, this must surely pile the pressure on to get Kiliwani back up and running.
Link to the article:
https://www.ippmedia.com/en/news/dar-set-10%C2%A0day-power-cut
Tested 1p a couple of times in last week or so. Entering a news window. Possible news on 3D seismic, rig order and spud date, Kiliwani remediation plans, Nyuni license award. News next week? Vox markets forecast 1.3 to 1.4p by end of Feb. We all know that more is possible with the right news and the speed this baby can move. Happy Friday Aminexers!
An interesting article in The Citizen newspaper today about power blackouts in Tanzania and the reasons why. Sounds like power generation is at the limit. I believe that as soon as they know for sure that we have the gas, they will press ahead with the Mtwara and the Somanga Fungu gas fired power stations.
Here are the reasons that the article cites for the power blackouts:
“the frequent blackouts are most probably caused by:
One, with every new house, office, or event hall, the distribution capacity is being stretched to the limit. Often, power levels are pathetically low – yet new clients are being added. Technically, this is what can cause transformers, conductors, and substations to fail intermittently. This implies no upgrades in substations and transformers.
Two, generation capacity is low. I made this argument in an earlier article, and I stand by my analysis that all indicators show that there is a challenge in capacity. When substations don’t receive enough power, the effects are cascaded to end users”.
Link to article:
https://www.thecitizen.co.tz/tanzania/oped/what-is-behind-the-dramatic-return-of-power-blackouts--3695904?view=htmlamp
Not far fetched at all jackpack
2004 - previous Aminex Chairman Brian Hall:
"The oil traces identified in Nyuni-1 could possibly be the key to the oil potential of the whole region“
APR 2013 - then Aminex EXPLORATION DIRECTOR, MIKE REGO:
An Aminex Plc article1 written by the former Exploration Director, confirms the company’s view that “beyond doubt” oil has been generated in the region. The same article explains that as much as 56 billion bbls of oil (equivalent to 336 TCF of gas) may have migrated to the onshore Ruvuma Basin (where Ntorya/Chikumbi is located). The article includes a diagram clearly showing Ruvuma as one of the “Best locations for oil”
FEB 2017 – FROM Ntorya-2 Well Drilling Result RNS:
“Ntorya-2 also encountered traces of oil in the gross reservoir interval and the company is now evaluating the implications of this positive development through an updated basin model”
JUNE 2017 - then Aminex Ceo, JAY BHATTACHERJEE:
“Ntorya-3 [Chikumbi-1]…we want to make sure we maximise as many targets as we possibly can. We are working on a basin model and evaluation some of the deeper targets for liquids”.
;-)
Hi blackgold, it is worth bearing in mind that the gas from Ruvuma will be considerably cheaper to produce than that from the deep offshore fields. I suspect that Tanzania will want to prioritise that cheaper gas for themselves.
If there is a scenario where our gas is used for export (e.g. Ruvuma has been linked with gas pipeline to Uganda) then our cost advantage gives us competitive edge to secure that too. In that scenario, there is perhaps a little less price pressure as it would be politically awkward for the ruling party if the gas sold domestically was seen as hugely expensive. So that could give us more room to negotiate ourselves.
Domestic consumption is increasing fast. We know there are some big gas hungry projects planned including the $2bn fertilizer factory. Also, Tanzania wants to export power/electricity and part of their plans to achieve that includes new gas fired power plants (inc. Mtwara 300MW and Somanga Fungu 330MW). With proposed gas pipelines to export to Uganda, Kenya and beyond, there will be a lot of demand to be met by the time the LNG facility comes on stream. The Omanis are astute business people. I’m sure they wouldn’t be spending time and money if they weren’t confident that the supply/demand equation stacks up ;-)
You need to read the RNS in this context. As stated in the accounts:
“The Company is in a position whereby PRESERVATION OF CAPITAL IS CONSIDERED TO BE PARAMOUNT. Consequently, SALARIES HAVE BEEN REDUCED AND NO BONUSES AWARDED to the Executive Directors in 2020. It is the intention that both executives and staff should be accordingly compensated, in the meantime, through the award of options under the current share option plan”
SO, THIS IS NOT GREED. IT IS PRESERVATION OF THE COMPANY.
Also, regarding the price set for the options, this is not something that the Directors decide on the fly. The process for that is also set out in the accounts:
“Executive Share Option Scheme ("ESOS"). Under the terms of the ESOS, certain Directors and employees of Aminex PLC, and its subsidiary companies, are entitled to subscribe for Ordinary Shares in Aminex PLC at the market value on the date of the granting of the options. Options are granted at market price, in accordance with the ESOS rules, with reference to the average closing price for the fourteen days prior to the grant of options”
The full year report from June last year said:
"The work programme and budget to the end of 2021 anticipates a gross JV expenditure of approximately US$23 million, with Aminex carried entirely for its 25% interest. We expect to see the acquisition of the 3D seismic, prespud activities for the Chikumbi-1 well, negotiations of the commercial terms for the development licence, and the application for a further 1-year licence extension."
Obviously, we've had the license extension and that was for 2 years, not just one. The seismic is underway but news of "negotiations of the commercial terms for the development licence" is still pending.
That was all in the work programme "to the end of 2021" hence I am hoping we should hear something on that soon.
Completely agree that getting the GSA in place will probably take some time. Agree also regarding enterprise value.
The $40m per annum however is net to Aminex. So, that would be all ours.
However, we don't know how quickly they will be able to ramp-up to the 140MMcf/d that would be needed to generate that revenue. I remember seeing a graph that showed they expected to do so pretty quickly but that was from quite a while back.
Morning Crusty,
So you think that when negotiating the price at which we will be able to sell gas from Ruvuma, the backdrop of strong global prices has no bearing at all?
I disagree.
The estimated $40m/annum is based on Kiliwani prices. If the price and therefore the estimates increase, that can only be a good thing.
Hi nmuk, next news we are expecting:
KILIWANI NORTH REMEDIATION PLAN – the plan to remediate and get back into production. This had been held up due to a protracted tax dispute. That was resolved last year, and we had confirmation on 18 Nov that settlement monies had been received. As the stated blocker is out of the way and they have said that they know what the options are to remediate, I expect news on this soon (a plan at least). To be back in production would obviously be hugely significant.
RUVUMA GAS SALES TERMS – something they advised was on the list as a near term deliverable – so could land any day. Will the Omani’s have been able to negotiate better terms than Aminex did for Kiliwani? Particularly with the backdrop of strong global gas prices. What might that do the estimated $40m revenue?
NYUNI LICENCE AWARD – we know this now has all approvals apart from the new Energy Minister. We also know that the plan is to farmout. If we get a cash injection from a farmout and can parallel run operations on Nyuni with Ruvuma (and perhaps Kili), this would put a rocket up the share price.
RUVUMA SEISMICS UPDATE – any results are probably a few weeks away but who knows. We might get something to say how the operation is progressing before we get results. Given the size of the assets in the same basin just the other side of the border, the results could be very pleasing.
Hope that helps.
Well, new comers only have to read through the posts of the last two days to see why Aminex remains monstrously undervalued. Hopefully, for their sakes, they will take the time to do that tiny bit of research. It might make them a lot of money ;-)