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So, that article about Dubai trade relations with Tanzania also had an interesting snippet about the Dodsal gas discovery and its value:

“Dodsal. A Dubai based multinational conglomerate focused on exploration and production of oil and gas, has already seeded its investment in Tanzani’s oil and gas industry”…”in 2016 it announced it had discovered gas reserves worth an estimated $8 billion in the Ruvu basin (2.7 trillion cubic feet)"

This valuation is not something that had come across my radar before. It is very interesting as it is a fairly recent (in oil and gas terms), it is for discovered gas in Tanzania that is onshore, not in production. So, estimated resources not reserves. A really excellent comparator (note interesting comparisons with Wentworth made by blackgold and edgar last month – made difficult as they are in production, etc).

However, that valuation was given when the investment climate in Tanzania was much less favourable. Also, in 2016, the price of gas went as low as $1.49/MMBtu and averaged $2.52 during the year. Today, the price is $5.94! That is an 135.7% increase compared to the 2016 average!

Now, the valuation for our gas will be based on the gas sales agreement that we are currently negotiating. As discussed previously, that backdrop should help ARA to agree a good price. Their clout and the more international investor friendly government should also help.

Based on the Dodsal valuation, 1 TCF should be worth $2.96 billion. Whilst gas prices have increased by 135% since then, let’s be super conservative and say that an asset in Tanzania is worth just 20% more now. So that would mean 1 TCF would be worth $3.56 billion. As Aminex own 25% of Ruvuma, our value per TCF would be $0.89 billion.

Translate this to our asset:

Ruvuma estimate 6.1 TCF = Aminex value $5.43 billion (USD) or £4.01 billion (GBP). As part of which, we are targeting 1.87 TCF for Chikumbi 1 = Aminex value $1.66 billion (USD), or £1.23 billion (GBP)

In terms of share price then (3,770,685 shares in issue), that would equate to:
Ruvuma = 106 pence per share, or £1.06 per share.
Chikumbi 1 = 32.62p per share, or £0.33 per share.

Consider we are at 0.75p per share now! That would mean a 4,250% increase to get to the value of CH1 alone.

I’m not saying that this is going to happen but it does help to show the size of the prize here.

Happy Saturday Aminexers!

Found this article yesterday which is very positive about the change in administration in Tanzania and what it means for international investment:

“With the new administration led by President Samia Suluhu, which is strictly focused on opening and building strategic partnerships with other countries”

“At the moment different top-tier investing parties have showcased their confidence in Tanzania, including Africa’s wealthiest man, Aliko Dangote, who plans to construct a fertilizer factory”

“Down the line, Dubai exporters find Tanzania’s foreign direct investment (FDIs) especially in the petroleum gas sector strong as several foreign establishments are focusing their attention towards the country that has become a viable investment destination”

There is also an interesting note about the Dodsal gas discovery in Tanzania but I’ll expand on that separately.

https://emea01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.google.co.uk%2Famp%2Fs%2Ftheexchange.africa%2Fbusiness%2Fdubai-tanzania-relations%2F%253famp_markup%3D1&data=04%7C01%7C%7C30cf7c3574424ca675ec08d985999c2c%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C637687717051483339%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&sdata=RAxn4MFx2aXzqUNysAH%2B7GHihV08RUXRBhY0L8wWvX8%3D&reserved=0

That's right, it's finally here...this month will see the first meaningful operational activity for Aminex on the ground in Tanzania for nearly 5 years!

Can't wait to see the results of the seismic. I'm fully expecting another significant increase in estimated resources.

Happy Ops-tober one and all :-)

Hi Chris, thanks for sharing. An interesting point - the article states $491k of cash and equivalents. However, in the Half Yearly Report it includes the following under 'Post Balance Sheet Events':

"Since 30 June 2021, the Group has received a further US$0.33 million of Interim Costs due from ARA Petroleum LLC"

As such, cash and equivalents should now be nearer ~$880k. With a loan of $1.7m available from ARA, that gives Aminex about $2.5m to live off.

As the report also says our G&A will be less than £1mGBP per annum (call it $1m dollars then), that would allow Aminex to keep the lights on for another 2 ½ years…or until the start of April 2024.

I think it is highly likely that the monies owed relating to Kiliwani will have been resolved by then...even at Tanzanian speed of resolution!! I think there is also a good chance we will have farmed out Nyuni (resulting in some up front cash) and/or will have some production from Kili back online.

So, it seems highly likely to me that we are funded through to first income from Ruvuma.

Annoying

Let there be an annual festival in thy name :-)

Evening Reverand! Got a meeting in an hour that I need to prepare for. Will certainly give my thoughts regarding your question later tonight or tomorrow if no one else has covered it in the meantime.

Evening bigpat. Just some wise and artful accumulation in my view :-)

It is staggeringly cheap

Nice.

Interesting article from yesterday. A nice reminder and reiteration of the impact of the new president and her very clear intent to rebuild trust with international investors:

"Barely three months since Tanzania’s incumbent president Samia Suluhu Hassan made a public announcement of her intention to regain investor confidence, her efforts are already bearing fruits".

"The president recently said ‘…investors view the country as having an unpredictable investment climate, hostile tax collection, and bureaucracy all of which are scaring investors away.’ As such, she pledged to change the status quo".

"“The sixth phase government will take an uncompromising approach on this, and we will start with the blueprint for the improvement of Tanzania’s business climate…” the president announced".

"In the report titled ‘Enter President Samia, time for a rethink’ the financial firm said thanks to Samia’s positive fiscal and monetary policies, the country now has ‘lower risk charges’ and an ‘attractive Post-Covid-19 recovery play.’"

https://furtherafrica.com/2021/09/26/tanzanias-efforts-paying-dividends-as-investors-regain-trust/

Evening bigpat. There's plenty of positive macro environment stuff out there which is fantastic to see. Until recently that had seemed somewhat hollow as it didn't mean much unless that was an adjunct to news of operational activity for Aminex on the ground in Tanzania. After nearly 5 years we are finally there! I've had to pinch myself a few times since last Friday's news!

Without operational activity and clear signs that things had changed in Tanzania, there was no reason for the share price to do anything other than drift down over time. Following the license extension last month and the award of the 3D seismic contract this month, it is clear that things are changing. Old stalwarts on here will rightly point out that the next 'main' price catalyst will be the CH1 drill and that is still quite a few months away. Traders will dip in and out until then. Investors however will recognise this as the start of a new era and time to start accumulating. I believe that will result in the opposite of what we have seen in recent years...a steady drift upwards over time. Hallelujah!! I think there will be boosters along the way which may include resolution of the Kiliwani disputed tax amounts, news on gas sales terms for Ruvuma, likely further resource estimate increases following 3D seismic, news on mobilisation of rig and wellhead and possible news on other things like Nyuni license, etc, etc.

Happy to share any further finds. Happier still that - in the context of operational progress on the ground for Aminex and partners - those finds finally have real meaning!

Interesting quote from Sunday Times article by Philip Aldrich this weekend:

“Tackling climate change will require a transformation in the global energy mix. Less coal, more renewables AND MORE GAS. OF THOSE, GAS — AS THE TRANSITION FUEL — WILL BE THE BASELOAD ENERGY SOURCE AND DEMAND WILL ONLY RISE. BP estimates that the increase in energy demand over the next 20 years, as the global population and middle classes expand, will be equivalent to today’s consumption in China, India and Africa combined. Choosing not to meet that with dirty but plentiful fossil fuels is equivalent to Opec halting oil supplies in 1973 in protest at the Yom Kippur War”

The president continues to ring the changes with more heads rolling and new appointments across the energy sector in Tanzania:

https://www.google.co.uk/amp/s/www.thecitizen.co.tz/tanzania/news/president-samia-sacks-tanesco-boss-3562878%3fview=htmlamp

Will it be...
1. details of negotiated gas terms for Ruvuma (part of items listed as scheduled by end of the year)
2. outcome of tax dispute negotiations
3. confirmation that long lead items for CH1 have been secured including well-head and rig

Nyuni license also a possibility. My guess is that news on resolution of the tax dispute will be next. Thoughts?

The border between Mozambique and Tanzania pretty much runs straight through the middle of the Ruvuma basin. So, there is every chance that there is much much more gas in Ruvuma than currently identified.

Looks like we could see results sooner rather than later...

"Realtimeseismic has now used STRYDE’s nodal system to conduct several 3D seismic studies for geothermal clients in Europe, using about half the number of crew and vehicles than they used to with the current market-leading nodal system. In one project, RTS was able to shoot a city-based 3D study IN JUST ONE MONTH, VERSUS THE 6-10 MONTHS IT WOULD HAVE TAKEN with cables. This is thanks to the flexibility of our nodal system but ALSO THE SPEED AT WHICH DATA CAN BE PROCESSES ONCE OUR NODES ARE HARVESTED".

Interesting that AGS is based in Oman too. Looks like a serious outfit

Can't imagine they are spending millions just for the fun of it...

Aminex’s acreage is on the same Ruvuma Basin which, on the Mozambican side, is estimated to have ~200 TCF of gas - One of the 7 largest gas fields in the world! On Aminex and Partners' side of the border, the CURRENT ESTIMATED resource is 6.1 TCF. Gives you an idea of the potential here!

Ruvuma is a sedimentary basin (a low area in the Earth's crust, of tectonic origin, in which sediments accumulate) and so there is some consistency of geology and therefore a very good probability of Aminex finding huge upside their part of the same basin.

2018 Aminex Corporate Presentation: Ruvuma PSA has “multi TCF exploration upside”

A stated aim of the 3D seismic programme “to map remaining upside potential across the licence”

Steady as she goes! :-)

The starting gun has been fired. Licence award last month, seismic contract awarded this month, first operational activity in about 5 years to start next month...

Seems things may have finally changed :-)

AEX are fully carried though. No costs to pay. No such downside to this news for Aminex ;-)