Interim Management Statement

RNS Number : 4212D

Aminex PLC

16 May 2012

 



INTERIM MANAGEMENT STATEMENT - FIRST QUARTER 2012 

Aminex PLC ("Aminex" or the 'Company"), an independent oil company listed on the main market of the London and Irish Stock Exchanges with exploration and development assets in the emerging hydrocarbon province of East Africa, today issues its Interim Management Statement ("IMS") for the period 1 January to the date of this statement.

Highlights

·    Ntorya-1 gas discovery in prolific Ruvuma Basin ready for flow testing

·    Geological and seismic studies to provide initial resource estimates for Ruvuma and updated resource estimates for the Nyuni Area

·    Kiliwani North tie-in delayed by infrastructure constraints

·    Sale of Somerset field in Texas signals beginning of portfolio rationalisation. 

·    Withdrawal from Korean exploration

·    Completion of share subscription by Asian Investors

Tanzania

Ruvuma PSA

On 27 February Aminex reported a gas discovery at the Ntorya-1 well.  Ntorya-1 represents the first onshore gas discovery in the Ruvuma Basin, where over 70 Tcf of recoverable gas has been discovered in the offshore portion of the basin in Tanzania and Mozambique.  Two giant discoveries have recently been made within just 22 kilometres of Aminex's Ruvuma block - Anadarko's 20 Tcf recoverable Golfinho discovery and Ophir's 4.6 Tcf recoverable Jodari-1 discovery.

The Ntorya-1 electric logs showed a gross 25 metre (80 feet) Cretaceous sandstone interval between 2,663 and 2,688 metres and a 3 metre net gas bearing pay zone in sandstones with 20% porosity.  A 7-inch liner was set at 2,745 metres to case off the pay zone. 

A production string has been run in the well and a wellhead has been installed in preparation for flow testing in the coming weeks. 

With new pipeline infrastructure currently being planned to deliver gas from the Ruvuma area to Dar es Salaam, the Ntorya discovery clearly has the potential to be commercially viable. 

An extensive seismic campaign, which will include the offshore area is planned for the Ruvuma PSA for Q4 2012 in preparation for further exploration drilling in 2013. The Company plans to invite offers from potential partners to participate in the next round of exploration. 

Aminex has commissioned new geological and seismic studies to establish the extent of the Ntorya discovery, identify further prospects, refine the upcoming seismic programme and establish the first resource estimates for the Ruvuma PSA.

Nyuni Area PSA

The Nyuni Area PSA, signed in October last year, comprises onshore, transition zone and deep water acreage.  The deep water area in the eastern portion of the block accounts for approximately 30% of the PSA.

Ophir Energy, operator of the adjoining East Pande block, has announced that it is acquiring 3D seismic across its block including a large stratigraphic feature with multi-Tcf gas potential, identified in a published Ophir paper as Lead 3, that appears to extend from East Pande into the deep water sector of the Nyuni Block.    Aminex's own analysis of existing seismic data partially covering this feature within the Nyuni block supports this conclusion. 

To investigate the full potential of the deep-water zone, Aminex initially plans to shoot 500 kilometres of 2D seismic in the deep water in the second half of 2012.  

An additional 350 kilometres of 2D seismic is planned to commence in the transition zone in the coming weeks.   The combined transition zone and deep water seismic programmes will fulfil the seismic work required under the initial work period of the Nyuni Area PSA.   This seismic will further enhance Aminex's understanding of the geology of the licence and will be used to target future drilling, including deep water targets.

A new geological and seismic study has been commissioned to identify further prospects and update resource estimates for the Nyuni Area PSA.

Kiliwani North Development Licence

As previously announced Aminex has completed the engineering design for the Kiliwani North-1 (KN-1) tie-in to the Songas Processing plant.  The 6" line pipe to connect KN-1 to the processing plant is expected to be delivered by the end of June.

Efforts to secure access to infrastructure for Kiliwani North gas have been hampered by capacity restrictions to the existing processing plant and pipeline. The Government of Tanzania is finalising financing arrangements with the Chinese Exim Bank for new pipeline and processing plant infrastructure that will include additional processing and transportation capacity from Songo Songo Island.

In the meantime, Aminex has been negotiating a short-term agreement to tie-in to the existing facilities.  However, despite best efforts, Aminex has not reached an agreement for tie-in on commercially acceptable terms.   Aminex looks forward to resuming investment in Kiliwani North when the new processing plant and gas pipeline plans have been finalised.

USA

On 1 March Aminex announced the sale of the Somerset Field in Texas for $701,600 cash.   The sale also relieved the company of significant abandonment liabilities estimated to be approximately $2 million. 

The Somerset properties were low-productivity "stripper" wells and Aminex had no reserves attributed to Somerset.   The sale of Somerset is the first step in the Company's programme to divest the remainder of its US assets to focus investment on high impact opportunities in Africa.  

Aminex is currently preparing an electronic data room to market the remainder of its US properties and has engaged a specialist oil and gas asset marketing organization to manage the process. 

Korean Peninsula

Through its shareholding in Korex, Ltd, Aminex has held an interest in a concession offshore in the Democratic People's Republic of Korea.   Due to the volatile and unpredictable politics of the area Aminex has concluded that it is in the best interests of shareholders for the Company to withdraw from the Korean exploration programme and not participate in seismic acquisition.   This decision will allow Aminex to focus on growing its African portfolio. 

Share Placement Completed

In December 2011, Aminex announced that it had entered into a Share Subscription Agreement with Dr. Chan Chai Rauyrungruang of the Reignwood Group and with Empire Asia Group Co., Ltd. for the placing for 38,983,733 new ordinary shares at a par value of euro 0.06 (Stg 5.0 pence) per share (a 45% premium to the previous day's closing share price of Stg 3.45 pence per share).   The placement raised approximately US$3.1 million.   On 5 January 2012, the New Ordinary Shares were admitted to the Official Lists of the Irish Stock Exchange and the UK Listing Authority and admitted to trading, thus completing the subscription. 

Outlook

Aminex's three Tanzanian properties (Nyuni Area and Ruvuma PSAs and the Kiliwani North Development licence) are located in what has become one of the most exciting emerging hydrocarbon provinces discovered in recent decades.

The Ntorya-1 gas discovery in the Ruvuma PSA extends the play fairway onshore from the giant deep-water discoveries made in the offshore portion of the Ruvuma Basin by Anadarko, ENI and BG and deep-water prospectivity in the Nyuni Area PSA holds the potential to be a game changer for Aminex.   Gas transportation infrastructure planned by the Tanzanian government will serve all three Aminex properties, providing existing and future discoveries a clear route to monetization. 

These developments highlight the potential of Aminex's East African portfolio to deliver significant value as the exploration programme progresses. 

Earlier this year Aminex published the results of a strategic review focused on high-impact investments in Africa.  The key components of this plan include divestiture of non-African assets, de-risking of exploration properties through adequate seismic investment, targeted African acquisitions and strategic investment partnerships to fund growth.  Aminex has made progress on all fronts.

In the area of strategic divestments, we have withdrawn from our Korean venture, divested one US-based asset and prepared the remaining US assets for sale.  To de-risk our core Tanzanian assets, we are launching extensive seismic programmes for the Nyuni Area and Ruvuma PSAs to prepare for drilling in 2013.  Upcoming flow testing will likewise provide insight into the commercial potential of the Ntorya-1 discovery. In parallel, Aminex is conducting a thorough review of both corporate and licence acquisition targets to grow its African portfolio and work to secure strategic funding is ongoing. 

With a new African gas discovery, divestiture of non-African assets and a robust investment programme targeted on our Tanzanian properties, it has been an exciting beginning to 2012 and the rest of the year is expected to be similarly active.  

For further information please contact:

Aminex PLC                          [phone]

Stuard Detmer

Chief Executive Officer

M: Communications           

Patrick d'Ancona                 [phone] or  [phone]

Chris McMahon           [phone] or  [phone]

 

END

 

 

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