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If I were WEN, I would want to see the output from the 3D seismic before committing, so it's likely a 2H21 activity IMO.

Would like to see AEX simply farm down its holding in Kiliwani South, but I doubt that fish is interesting enough for WEN.

Thanks cp. WEN are looking for inorganic growth in-country to increase natural gas production. Ruvuma the only other game in town (Orca doesn’t need partners). Wish the two co’s would stop this embarrassing game of footsie and publicly state they’re looking at a tie-up.

Alternative option is to turn off the lights for the next few years, cut G&A to near zero, and wait for Ruvuma CF to be up and running. Not my first choice, but I'm sure it's on the table. Another is to raise money via a placing and focus on Kili South. Personally I think a tie-up with WEN is a bit nicer, and will generate a bit more confidence and excitement for both companies.

bg, yes I hope there's movement on Kiliwani. Don't see how they're going to pay for 3D seismic though. Leverage the ARA contract? Maybe. Hope they cut a good deal and include Nyuni. They'll still need cash for it, and will take time. Hope to see more on it soon.

edgar222, the previous mgmt wanted to see an early production system because AEX needs cash asap. I don't believe ARA really care about that and they'll do what they want to do. Even despite their 29% interest in us.

What our fearless CEO now owes us is detail on his key comment from Monday's RNS:

“Following the completion of the Farm-Out...Aminex can now concentrate on progressing initiatives that offer value creation for the Company."

Our BoD can put Ruvuma out of its mind. We don't do anything, pay anything, or decide anything. We're pure takers of information on that project.

With those problems outsourced, what will our BoD do from now on? What initiatives? What's the strategy? Where do we go from here?? I'd like to see the thinking.

The point is it's big. Original io report also projected shooting 200km2 of 3D seismic, but ARA are now more than doubling that to 454km2. They must have bigger plans in mind.

And then discount that number to PV by time and cost of capital * 25% to get to the numbers I was quoting earlier. It’s a big exciting project, and is no wonder ARA want to complete proper DD before starting.

As matherdj notes, that's as per IO Consulting, the GE consulting firm, not AEX's figures.

Correct, 140mmcsfd is the full full field estimate. It'll take some ramping to get up there. Co's estimate is it will run for 30 years, albeit declining after 20 w/o further discoveries.

Simple math. 18 months to drill results. Another 18 months to assess and build a pipeline. I don’t see how it could be sooner.

What the market doesn't understand (and WEN s/h wouldn't yet appreciate) is the value of Ruvuma to AEX. We sold 50% of Ruvuma essentially for $40M. That doesn't mean our remaining 25% is worth $20M. It means our 25% with a free carry is worth cash flows of $40MM p.a. for 20 years (assuming field production of 140mmscfd. The farmout enables those cash flows to occur.

Back of envelope DCF model, with a WACC of 10%, the present value of those discounted CFs is about $500MM. A high wacc is offset by no upfront costs (ongoing expenses included)

Our valuation will take a big discount on that number because of all the risks we discuss here frequently: Frontier Market, client demand, ability to pay, drill results, etc.

WEN has cash, which we need. They don't have access to a free carry development that resembles anything close to this, and should be attractive to their BoD (if not their chat board punters).

Cash flow from Ntorya is quite possibly three years away. We have cash until midway next year. There is no way we can sit back and wait for cash to come in from that project.

I said BPC/CERP was *a* model that could be used, not that it’s a good one. However, we need cash, they need growth. There’s a fit. If not that, we’ll need a major cash call in ‘21. To think otherwise is delusional.

IMO, WEN is not buying SCIR’s stake. They’d need $20m+ to buy it and another $30m to pay their bills. $50m price tag is way more than they can afford.

AEX tie up is cheaper and better for both cos.

WEN and AEX more likely to simply merge. You only need to calculate the fraction of shares for one of the sides (ie AEX due to its share base). No cash exchanged. BPC and CERP provides the model of how it is done. That deal advised by Gneiss.

There's nothing safe (or boring) about business in TZ. Look at Orca's results from last week. Buried in the notes relates to a tax dispute. Instead of going through due process (Orca believed they were in the right), the gov't forced company's bank to transfer $5.3M to them. No recourse, no options.

None too pleased about the timeline for old AEX these days, but if you want 7% yield, buy Vodafone. At least that share has liquidity.

Good chance of hitting 4p two months from spud date assuming good results. Remember, this one has much higher potential than both NT1 and 2, and this time will be run by a competent operating team.

Cash call is a matter of when not if for a non-producing microcap. AEX suggested recently they have an ok burn rate until mid-2021, which is hopefully post-drill. Aside from G&A, they shouldn't have any major expenses in the near-term.

Unless of course, they move faster than expected on a WEN tie-up. The dilution on that deal would essentially replace the need for cash anytime soon. Hopefully that wouldn't happen until post drill either.

Other unknowns are the pre-paid expenses owed by ARA on CH1 preparation (if any). Not counting on seeing owed cash from KN1 anytime soon.

Helium is an interesting play, and hopefully H1 is a huge success, but boy did we overpay for our stake here. Will be lucky to get half our money back from our initial GBP2.55M investment.