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The Ntorya seismic programme is really very significant...The famout only commits APT to completing a minimum of 200sq km over Ntorya.

According to the RNS of 06th Nov (and the 3D part re-iterated today) the plan is now: "more than 500 km2 of 3D seismic designed to fully image the Ntorya gas field and the acquisition of approximately 450 line km of 2D seismic over the remainder of the contract area to identify other leads and prospects".

So the seismic programme is MUCH BIGGER than originally sign posted. To put that into context, the total area they are going to image is about 2.5 x the size of the Isle of Wight or about 5.5 x the size of Washington DC!

That’s before you consider the planned 275km sq of 3D seismic over Kiliwani North and Nyuni. It is interesting to put the scale of the plans into context. On that note, do you think that latter part is the bulk of the "2020 "reduced" Work Programme and Budget for the Nyuni Area PSA" that was mentioned in today's RNS?

gaslady neglecting her duties ;-)

Well blackgold, that was one of the other very interesting points. To me, the message was clear. After the farmout, Aminex and APT will hold a 75% interest and under the terms of the JOA, they will be able to push ahead with plans...they don't need approval from Solo. My interpretation of that is that Solo are not ready to move at the speed that Aminex and APT want to and they are not planning to wait for them. Solo will need to make sure they have their $10.36m ready to go, otherwise they risk defaulting on the agreement. By the way, that is not a situation that I am wishing on Solo or their shareholders. Just how I interpret it

I agree blackgold – the intention to remove the dependency for the 3D seismics on the 25 year development license is important. You will recall that in my recent posts, I have said that I think the timing of that is key to ensure the partners can press on with the full field development quickly after the CH1 drill.

Malcolm Graham Wood is keeping the faith:

https://www.malcysblog.com/2020/02/february-bucket-list-update/

An article published today talks of Tanzania's growing demand for gas:

"...expectation of higher demand for gas this year and beyond. Driving the demand should be the anticipated completion of another unit at Kinyerezi power plant in the third quarter of this year and a new 185-MW combined cycle generation facility likely to be commissioned by December. There is also potential demand from the country’s expanding network of compressed natural gas stations for transport".

"Demand for gas was strong in 2019, said PAET, consistent with the central bank’s recent statement that the east African nation’s gas output rose to 60.3mn ft³ in the June 2018/May 2019 period, up from 54mn ft³ in the previous year due to rising demand for electricity generation. PAET forecasts the trend will continue in that way this year and in the coming years".

https://tanzaniapetroleum.com/2020/02/24/pan-african-energy-sees-gas-demand-rising-in-tanzania/

Welcome Johnny. I don't think it will be much longer now. Remember, the completion of the Host Government Agreements for the multi billion dollar LNG plant are being held up by the review of our PSAs. With that - and gas demand growing strongly - there is every reason for all involved to get this done.

Well, it all helps to build on the already very strong domestic demand picture. 3,000 gas tanks being filled daily. That gas has got to come from somewhere. It's also good to see an investor willing to stump up $25million to build the plant. More glimmers of hope.

Thanks for sharing gaslady

Some encouraging words in IPPmedia article this morning:

As part of its drive for economic growth, Tanzania has plans to expand its domestic gas pipeline network through its Natural Gas
Utilization Master Plan that would deliver supplies to five regions: Morogoro, Tanga, Dodoma, Kilimanjaro and Arusha.

This follows a feasibility study by JICA and THE NEXT STAGE IS IMPLEMENTATION OF THIS PLAN, phase by phase. The ultimate aim is TO SUPPLY ALL MREGIONS WITH NATURAL GAS, said Deputy Minister for Energy Subira Mgalu...

The Natural Gas Utilization Master Plan indicates that the government has drawn A NETWORK OF PIPELINES THROUGH WHICH THE ONSHORE BLOCKS WILL SUPPLY THE DOMESTIC MARKET.

The proposed network will be the basis for distribution of natural gas to the domestic market, bearing in mind that about two-thirds of the available area in Tanzania is yet to be explored AND THERE IS A GREAT PROBABILITY THAT COMPANIES ARE LIKELY TO DISCOVER MORE GAS IN ONSHORE BLOCKS

https://www.ippmedia.com/en/business/responding-domestic-needs-natural-gas

A good observation blackgold - I hadn't noted that. Obviously, the more reliance there is on the Tanzanian authorities, the greater the risk to timelines. Oh well, we shall soon see...or not, as the case may be!

Related to cperkin's point about the Tanzanian/Uganda/Kenyan gas pipeline, it is good to see that the global market for LNG is forecast to double by 2040:

https://www.shell.com/energy-and-innovation/natural-gas/liquefied-natural-gas-lng/lng-outlook-2020.html#iframe=L3dlYmFwcHMvTE5HX291dGxvb2sv

We probably have about a decade to make hay before the Tanzanian LNG facility comes on line. If Shell's forecast is right, by then there will be plenty of export demand for that new capacity. Also, our gas is likely to be cheaper due to the much lower costs associated with onshore Vs offshore...so Tanzania may therefore prioritise the LNG gas for export, leaving us less impacted by that competition ongoing.

In addition, a forecast strong global gas market is obviously a useful backdrop for negotiations on pricing - be that domestic or otherwise. So, this forecast is good to see.

Excellent point regarding export cperkin. I am sure the price for gas for export will be much less domestically politically sensitive as well, so, if that is part of the plan, the Omani's may have been able to negotiate a better price.

Regarding full field development, I believe they will press on with the additional wells quite quickly after CH1 (i.e. starting within ~6 months). You will recall the Board went on record as saying that when they were sourcing a rig for CH1, they were looking for something suitable not just for this next drill but for the wider drilling campaign.

I think they will want to make use of the equipment whilst the have it in country. They will however need to have completed the 3D seismics, assessed those, updated the drill locations as required and agree the corresponding programme of work with the TZ authorities. That's why I'll be interested to see how soon they get on with those seismics.

Hi blackgold, yes you are spot on. In fact, if you look at slide 12 on this presentation, you will see that what you are suggesting is exactly what they plan to do:

http://admin.aminex-plc.com/uploadfiles/EGM%20Presentation%20Jan%202019_Final_long%20v1.pdf

As for timeframe, I think they will have recompleted NT1 and NT2, drilled CH1 and built the pipeline to Madimba within the next ~12 months. Perhaps a bit more time on top for commissioning.

Hi blackgold, I believe you are right. On 06th Nov last year we had the RNS that stated:

" APT and the Company have seen recent positive movements in Tanzania with respect to the general business environment, growing demand for natural gas consumption and the approaching completion of the government’s review of production sharing agreements. As a result of these encouraging developments, it has been agreed to fast-track select Chikumbi-1 “pre-drill” activities including construction of an access road to the Chikumbi-1 wellsite, construction of the drilling surface location, ordering of select long lead items and to progress permitting activities. This will enable the joint venture group to commence drilling operations on Chikumbi-1 as soon as possible following the granting of the extension of the Mtwara licence".

They wouldn't be doing that and APT wouldn't be looking to (as at 06th Nov) "in the very near term, to open an operations office in Dar es Salaam" if they didn't have visibility of the progress and the direction/content of the PSAs.

Hi DALPat, Bucklerfern et al, I do think this year will be a good one for Aminex - at last! I think we could see 10p as we head up to the results of the drill into the deeper Jurassic target. The size of that target and the possibility of oil should lead to quite a lot of excitement. However, whether that will be sustainable will obviously depend on results from that drill. Also, at least as importantly, whether investors think there will then be a long wait to the next share price catalyst including - but not limited to - the start of the actual monetisation of Ruvuma.

I will therefore be interested to see how quickly they get on with the 3D seismics. They will use that to optimise the location of subsequent drills at Ruvuma.

If the results for CH1 are good and, at that time, they make the right noises about moving ahead quickly with the pipeline to Madimba and they confirm they are moving straight into the full field development including a further 5 to 8 wells, then the share price should be underpinned. If not, it won't be and it will probably fall back to an extent.

This year though, I also expect NT1 and NT2 to be re-completed (as mentioned and costed in the farmout documentation). If the flow rates from those exceed expectations and the results of the 3D seismics impress, then that should also be a big boost.

A SUSTAINABLE 10p next year though...now that should be much more achievable. With strong revenues coming in from Ruvuma, Aminex will be able to push ahead with a wider strategy including Kili North, Kili South, Nyuni and diversification outside of Tanzania. In the end, as Bucklerfern points out, you've got to equate the share price back to company valuation and, without real or imminent revenue, that will always be constrained.

Personally, I think the license will be granted and the farmout will be completed in the next 2 to 4 weeks. Because I believe that to be the case, I'm now more focused on what can be achieved in the next 12 to 24 months. Once the farmout is done, obviously CH1 will be the big focus. That should be a beauty! An initial 763BCF target (2C) and a second ~900BCF target (GIIP). I'm optimistic about the chances of finding huge amounts of gas as well as commercial quantities of oil or condensate. This drill was always potentially a game changer.

Then there is the 3D seismic, prospects at Kili North and South, Nyuni, etc. The possibilities will be huge once we have the expected $40m net cash flows from Ntorya. Considering Ntorya and the Kiliwani prospects, it is quite possible that we will have revenues of $50m to $100m within the 24 months or so, and disproportionately low costs due to the farmout.

Time to start thinking about the possibilities beyond the license and the farmout.

Very best of luck all.

Ah, now that is interesting CP. I didn’t know the tax bill hearing is this month. Good to know there is some focus on it. Did Aminex announce this? The extra $3m net to Aminex would obviously be extremely helpful

Agreed BG. The same thought came to mind. Regardless, if they were ordering equipment in August, SURELY by now some progress would have been made by now that they could report on?!

Perhaps they are holding back until such time as the tax dispute is cleared.

A quarter of a year has passed since the last update on Kiliwani North. On Aug 16th Aminex stated:

“The Company continues to source equipment to perform the re-entry and remedial work on Kiliwani North-1. The re-entry, which has been designed to be carried out at minimal costs, is of value to investigate fluid levels in the well and provide an accurate bottom hole pressure measurement which will provide useful reservoir data for future operations and production and equipment is being ordered. The Company will update shareholders when further progress has been made”

Did the equipment order include a ‘long weight’? Come on Aminex, time for an update.

Small volume but all blue since lunchtime yesterday hence they’ve finally reduced the spread and we have a tick up. So, thankfully it’s based on more than just today’s buys