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Just a quick note. All related parties have already seen the internal CPR. Hence, the GSA, FDP, and Development License terms have all been agreed with TPDC and are just awaiting official sign off from Tanz Gov officials.
The CPR being released to the market is not the internal one but an independent one which is why its taking a little longer and is now certainly overdue.
Expect GSA, FDP and Development License to closely follow the CPR release then CH-1 drill, NT-2 and NT-1.
You only need to look across to CHAR to get an idea of valuation. Their Anchois drill was targeting 2Tcf and upon appraisal drilling success were valued at £300m at one point.
As another reference point, Cove Energy were bought out for £500m per Tcf net. That was 10 years ago.
So AEX 2Tcf net is worth anywhere between £300-£1 billion. If ARA were to buy AEX out, they already own nearly 30% so it wouldn't take much for them to approve a takeover offer by buying more stock and going over the 30% whilst wavering the Takeover rules.
The fact they haven't so far suggests they see more value retaining their 30% in AEX and carrying it for its 25% up to $140m.
If a takeover offer were to materialise, it would be circa 4-5p which I think most here would be happy with.
ATB
The last operational update was at the end of September and was included in the Half Yearly Report.
In terms of GSA, FDP, and Development license, we are still waiting on Tanz Gov sign off, which was due in October/November, so it is now imminent.
APT received the second shipment of long lead items for CH-1 with the third shipment enroute and was expected in approximately three weeks. The shipments, among other things, include tubulars, casing and crossover joints for the spudding of CH-1 and the workover of NT-1. Again these items will have now arrived as they were due in October/November.
CH-1 drill rig contract will soon be announced too given they have been working on this for the past 4 months with long lead items being ordered and delivered being the precursors.
The issuance of the Development License will be a big milestone achieved by the Company alongside the GSA and FDP.
The updated CPR will kick start everything imo as the resource will become of national importance hence the Gov taking on the construction of the pipeline.
Given the expected flow rates of 140mmcfpd, this project will be given priority to progress Imo.
The drilling of CH-1 has been decoupled from First Gas so ARA can get on with drilling it once the permits have obviously been approved.
Plenty of news to come and each bit of news will continually derisk the whole project from CPR to GSA, FDP, and development license,to the drilling of CH-1 and workover of NT-1 aswell as the testing of NT-2..
First Gas by Q4 is a distinct possibility given all the workstreams that are coming together, bringing a project of national importance to fruition.
The risk here is the Well being compromised hence not being able to flow at higher rates. The same issue occurred at IOG and we all know how that went.
If the clean up is successful and the sand jetting works then they will probably double production and the ESP will probably take this to 300bopd but I can't see it going much higher unless it's flowing at 300bopd without the ESP...
Hope it goes well for everyone here
Just wait until Gold explodes, and then you'll have everyone piling in especially to undervalued companies such as THX
The 3D seismic results had already been received by ARA prior to its back in rights purchase of SCIROCCO's 25%, which suggests the team has already seen and internally analysed the results hence confident enough to take on the extra risk and expenditure.
The RNS states that interpretation will be complete by Q4 23. The results of which may lead to an increase in the resource.
The results of the interpretation will be released by an independent third party company in the form of a CPR.
This usually takes a month, so we should hear about the CPR by the end of the month, if not then by February.
As for NT-2, let's not get semantic. Either way, it will be "worked" on. As with any work plan there are always delays.
Given the stage ARA have got to now it is only a matter of time before things begin moving at a pace.
Let's review after the next update which is overdue.
Edgar
Hardly any volume and its up nearly 10%, which is welcome. Hopefully it continues to build and then the news we've all been waiting for is released.
Email
There has been updates in between but nothing specifically related to the license. It was extended for 2 years as per Aug 21 RNS until Aug 23.
Seeing as it hasn't been extended again could mean it's been included in the 25 Yr Development License as per Edgar's post.
In the meantime I'm looking forward to the 3D seismic results and CPR Update which could lead to a significant increase in the current 2C Resource being upgraded from the current 3Tcf to potentially 8Tcf.
Edgar the following is from the RNS released in August 2021
Aminex is pleased to announce that the Ruvuma joint venture has received an extension to its licence under the Ruvuma PSA from the Ministry of Energy of Tanzania.
The operator, ARA Petroleum Tanzania Limited ("APT") secured the extension, which is valid for two years from 15 August 2021, and allows for the completion of the following:
· Acquisition of 200 square kilometres (surface coverage) of 3D seismic data
· Drilling of the Chikumbi-1 well
· Conclusion of negotiations of the Gas Terms for the Ruvuma PSA.
2 out of the 3 items have now been completed and CH-1 drill might be included in the 25yr Development License as you say, otherwise we should have heard of an extension by now.
The next update will be very telling and we should learn about how things are progressing.
Fingers crossed the GSA, FDP and Development License are signed off in Q1 and CH-1 gets green light to drill in March.
3D seismic results will probably be published alongside CPR Update in Jan with any luck.
I've been optimistic since SOLO days and have been lucky and wise enough to trade the swings there and here.
CH-1 location had been approved preliminarily and sign off was imminent 6 months ago, so we should hear about its official approval in Q1 with the next update.
APT has ordered the initial long lead items for CH-1 and have probably by now received the remaining items seeing as this was 6 months ago again.
The drilling of CH-1 was part of the license requirements when it was previously extended in August 21 and extended for 2 years.
So we might hear that it's again been extended for 1 year to allow AEX to complete its commitments and obligations under the license.
This is separate to the GSA, FDP and Development License which have all been agreed with essentially the Gov as TPDC is the Tanz Gov. So sign offs will be forthcoming, probably Q2 H1 if we're lucky or Q3 H2 the most likely case given how the Gov like taking the Michael.
In the meantime we can look forward to the updated CPR and possibly NT-2 workover in H1 followed by CH-1 drill rig Contract and spud with the rest to follow in H2.
Like everyone else I eagerly await with the patience of a saint whilst things are being progressed at a snails pace.
They've already missed the deadlines they've set which were optimistic to say the least. The original plan had some chance of succeeding albeit with some delays expected as Tanz Gov love dragging their heels.
Whilst we await GSA, FDP and Development License, ARA can proceed with CH-1, NT-1 & 2 and release the 3D Seismic results which they've been sitting on for a while.
They probably release them with the updated CPR given how long they've had them. So at least we can look forward to the above progressing in 2024.
Been following these lot and others in Tanz for over 5 years so know not to get my hopes up but AEX is overdue a spike to 6p+ and it might come next year...
Then as usual reality will set in and it will continue as per usual until the next spike
Seen the same price action over at HZM prior to their announcement of the finance package. So whoever is shorting this is expecting an equity element at a lower price or the package being at a lower base price.
Not long to find out as the negotiations have been going on for a while now
I recall them drilling NT-2 in December through to February, so with long lead items all ordered and delivered, we could see an announcement for CH-1 drill rig selection in January with drilling aimed for March.
They have already re-selected the location for CH-1 following seismic results and preparations have been made for the pad.
All the paperwork is in order and has been submitted to the authorities with sign off due imminently.
The Tanz Gov have had plenty of time so we should hear something in the next month or so about GSA, FDP and the Development License. In the meantime we can look forward to 3D Seismic results and CPR Update.
The next update will be a comprehensive one given the radio silence.
We can all but hope that they announce drill rig selection with drill in March possibly May given weather and an update on sign off being complete for everything else.
It's been a long road to CH-1 being drilled and proving up the 2C 8tcf resource but it feels like it is actually going to happen in 2024.
Looks like the CPR will upgrade the resource and CH-1 is being moved to the sweet spot.
Jan to March should have plenty of news from CH-1 long leads items, drill rig selection, 3D seismics, CPR, and GSA, FDP, Development license all to be announced.
Let's not forget NT-2 and NT-1 too aswell as the pipeline so AEX has a very busy year leading up to First Gas which will probably be by Xmas 24 given this year has been spent on getting the GSA, FDP and Development license agreed with all parties concerned.
The TPDC is essentially the Tanz Gov so with everything being agreed the sign off is just a formality which hopefully we will see in the new year.
Although it seems that way there has been progress made on several fronts.
First the GSA and FDP has been agreed by all parties. We are just waiting for official ratification from 2 different gov departments.
The gas pipeline wasn't part of the original plan so its a bonus hence CH-1 being decoupled from its completion.
The 3d seismics have been completed and analysed. The new timelines and targets given should be ignored imo and we should revert to the old ones.
It looks to me like everything was brought forward on an optimistic time frame but in reality everything will most likely be completed on the old one, give or take a month or two.
So first Gas Q4 2024 will probably be Q1 2025 with 3d seismic results in Q1 2024 followed by CH-1, NT-1 & NT-2 in Q2 and Q3.
Pipeline completion will probably be late Q4 2024 with testing lasting a month followed by First Gas Q1 2025.
Fingers crossed we have a cracking year next year and AEX becomes the talk of the town and gets its 15 seconds of fame.
Having followed this company for the last 5 years I can see progress is being made albeit slowly.
Obviously Covid slowed things right down but nevertheless we are on the precipice of making a lot of ground over the next year.
Everything is in place now for ARA to hit the ground running. The GSA has been agreed with TPDC and so has the FDP.
The change in the location of CH-1 has also been agreed with long lead items all ordered. The silence is reflective of the company waiting for the relevant authorities to sign on the dotted line.
Once that happens it's all systems go until then we have to wait patiently.
I'm hoping the Gov get a move on and give all AEX holders a nice Xmas gift. Then we can look forward to CH-1 being drilled followed by NT-1 and NT-2 workovers.
Also hoping we get 3D results and updated CPR too this year but that would be asking for too much
My 2 pennies worth here...
PoC is right in the belief AEX has seen the 3d results, and an independent CPR will now be produced.
AEX can, if they wish to do so, release an RNS Reach to the market stating 3D results are positive and either results are in line with expectations or exceed them.
Even if they did a little PR, they could. But AEX has never done anything before, so I don't expect anything now.
The reason they won't release that information is because the market doesn't usually asign any value to such information unless its independently verified.
Hence why the CPR has to be done by a third party, independent of the company and its operations.
All we can do is wait for the CPR results and hopefully prior to that an update is forthcoming relating to the GSA and FDP.
Been holding this for a while now and although frustrating, I can see 2024 being a transformational year for AEX...
I have also asked this question. Having done some research myself I can find no License that covers Block SK334.
The only thing that comes remotely near is a JTS which the BOD states
"We believe that the outcome of the Joint Technical Study will give Upland an advantage for the subsequent stages in Block SK334."
That's to say the JTS will give it an advantage when possibly applying for the license that covers Block SK334
In the meantime warrant holders have been given a opportunity to cash in at 3-4 times their values and the approach although linked to a billionaire and has some credence will not materialise unless a binding bid is made.
So in conclusion UPL has no license that covers the prospective resources only a JTS which will give it a advantage when going through subsequent stages.
Given no one else has got to this stage UPL should be able to get the License and progress this to the next stage which is usually a 3D seismic survey seeing as the JTS is only 2D.
Following the JTS we will get a better idea of the prospective resources and its chance of success. The 3D seismic will significantly improve these figures which then may lead to a JV which will fund the drill.
How much of the asset Npv UPL will have to give up remains to be seen to fund the drill program which will delineate the field.
I'll be happy to correct this post should any information come to light regarding the license or Block SK334
It did go down to 0.06 albeit for a few seconds to take some stops out but you couldn't buy anything for less than 0.075...
It rose from 0.08 so has only really done 200% which is nothing given NpV is 0.5p for SCH-2 alone.
Given the significant increase in oil column and porosity I expect SCH-2 will flow much higher than the mean case of 600bopd hence the material increase mentioned in the RNS for Reserves and cashflow
There will be a number of Wells to be drilled as part of the full field program. The full field program will target several different horizons hence each has a different CoS ranging from 70% to 40% as they are exploration Wells but as seen with SCH-2 each Well drilled will significantly derisk the field as more and more of the resource is proven up and moved from the Contingent category to the Reserves category.
The full field development has an NpV of £280m based on the base case numbers but as seen with SCH-2 this can increase significantly...
Most of the RTO shares are locked up for 12 months which means at least 50% of 10b free float can't be traded.
The 0.11 placees are flipping and once finished will let this then fly.
BoD target was 3.87mmbbls for SCH-2. This has virtually doubled with the extra 25m Column of oil and to top it off the porosity has significantly increased to 28% which means higher flow rates. Given the extra oil and porosity this will flow towards the top estimates if not higher. So expect 1500-2000bopd which means £60m+ revs.
Keep in mind this Well has also significantly derisked the 2C 23mmbbls resource which we will be drilling soon.
I believe once flow rates are announced then there will be a Reserves and Resource upgrade too
Lots of investors not understanding what this Well is all about. The oil is there and has already been appraised hence classed as 2P Reserves.
Wireline logging is taking place to ascertain geology of the reservoir and how big the oil column is and if its commercially viable.
Once completed they will then move on to flow testing which will take 12 days.
By reaching TvD the technical risks of drilling this Well are now over and all that remains is checking the reservoir and oil column followed by flow tests to get stabilised rates.
This Well is not an exploration or appraisal it's a development Well targeting 3.8mmbbls which has an NpV of £55m.
Commercial flow rates will significantly derisk the 2C 23mmbbls resource which the next Well will be targeting which has an NpV of £280m hence why this Well is so important as its a stepping stone to a much bigger prize