TIDMAEX
RNS Number : 9593X
Aminex PLC
28 April 2023
28 April 2023
FINAL RESULTS for year ended 31 december 2022 AND ANNUAL
REPORT
Aminex PLC ('Aminex' or the 'Company') is pleased to announce
its audited financial results for the year ended 31 December
2022.
Highlights
Outlook:
-- The operator of the Ruvuma PSA, ARA Petroleum Tanzania
Limited ("APT") continues to progress operations at the Ntorya
field, with the following planned for 2023:
o Two-week well testing programme on NT-2, utilising a mobile
testing unit, principally to sample the gas and establish an
accurate measurement of the gas composition, required for the
design of in-field processing facilities and the export pipeline to
the Madimba Gas Plant
o Conclusion of negotiations and execution of a Gas Sales
Agreement
o Finalisation of terms for the construction of (i) an export
pipeline from Ntorya to the Madimba Gas Plant to accommodate gas by
October 2023; and (ii) in-field gas gathering and processing
facilities
o Entering into a rig contract to (i) drill, test and complete
the Chikumbi-1 well ("CH-1") as a gas producer; and (ii) workover
and recomplete the NT-1 well as a gas producer
o Following the processing of 3D seismic data, an optimal well
location has been determined for the CH-1 well
-- APT has also submitted a near final Field Development Plan to
the Tanzania Petroleum Development Corporation which, upon
approval, will lead to the issuance of a Development Licence for
the Ntorya field
-- Orca Energy, though its subsidiary, Pan African Energy
Tanzania, has commenced its 3D seismic acquisition programme over
its Songo Songo licence which includes an incursion of 12.5km(2)
over part of the Kiliwani North Development Licence ("KNDL") at no
cost to the KNDL parties. The acquisition programme is expected to
be completed by Q3 2023.
During 2022:
-- APT completed the 3D seismic programme over the Ntorya area in October 2022
-- An Addendum to the Ruvuma PSA setting out the fiscal terms
for gas (as opposed to oil) production from the Ruvuma PSA was
signed by all parties on 25 November 2022
-- Successfully raised approximately US$4.35 million
(approximately GBP3.30 million) before expenses in April 2022 to
fund the Company to the expected receipt of revenue from first gas
production at the Ntorya field
-- Company now debt-free following the share placement
-- Ruvuma PSA Farm-Out Carry of US$35 million covered Aminex for
all 2022 Ruvuma costs with US$30.72 million of the Carry remaining
as at 31 December 2022
-- Further reduction in gross G&A costs (before one-off
costs and exceptional items) to US$1.46 million per annum in 2022,
a reduction of 19% from 2021 and a significant reduction from 2018
levels when cost control measures commenced
-- Loss for the year of US$4.06 million (2021: loss of US$8.56 million)
The Annual Report may be viewed on the Company's website
www.aminex-plc.com by clicking on the following link:
Aminex PLC Annual Report 2022
The Company will announce details of the Annual General Meeting
in due course.
Paper copies of the Annual Report together with the Notice of
Annual General Meeting, including the Form of Proxy, will be mailed
shortly to those shareholders who have elected to receive paper
copies.
The Executive Chairman's Statement from the Annual Report
follows below:
Executive Chairman's Statement
Dear Shareholder,
We believe 2023 will be a watershed year for our Company, with
multiple macro and local developments converging to produce
shareholder value.
Since my last Executive Chairman's Statement, energy prices have
remained significantly higher than their April 2020 historic lows,
with a Brent crude oil spot price average of US$100 per barrel for
2022. The higher energy prices, linked to the lack of investment in
new oil and gas projects, sanctions against Russian oil and gas
exports, and growing demand in the developing world, are projected
to continue into the near and mid-term. Higher energy prices and
shortages have emphasised the importance of fossil fuels,
particularly natural gas, for the coming decades as an essential
and cleaner energy source for global economic development.
Moreover, the macro-political uncertainty and significant demand
for energy in the developing world will, we believe, translate into
continued growing demand for gas globally.
In Tanzania, we stand by last year's assessment of the country's
significantly improved commercial and business climate. Moreover,
we see the business climate continuing to improve. Specifically,
the Tanzanian authorities appear fully committed to natural gas
development and are making considerable efforts to accelerate
natural gas production from Ruvuma. Moreover, the Tanzanian
authorities, aware of their need to increase energy production to
grow the country's economy, have embarked on further industrial
development. These efforts include planning and constructing
numerous facilities along existing gas delivery infrastructure
directly connected to or near our Tanzanian assets which will
increase local gas demand substantially in the short to medium
term. In addition, discussions have been reported between Tanzanian
Government officials and their counterparts in neighbouring
countries exploring the possibility of securing a long-term gas
supply from Tanzania, which will contribute to future gas demand in
the East African region. These positive developments in the
Tanzanian gas sector bode well for the commercialisation of our
assets soon.
Non-Operating Strategy
Our move from an operating to a non-operating business has
enabled the Company to de-risk while anchoring shareholder value
by:
1. Shifting operational risk on our most valuable asset, Ruvuma,
to ARA Petroleum Tanzania Limited ("APT"), a highly co mpetent,
capable, and well-funded operator.
2. Further de- risking by APT to accelerate gas production,
targeting October 2023, shifting the operational narrative of
Ruvuma from a dependence on the spudding and outcome of the
Chikumbi-1 well ("CH-1") to a more anchored and broader development
effort as we move toward early gas production.
3. Reducing our operating expenses and overhead significantly to
protect the Company while the project is still not generating
cash.
4. Successfully acquiring the necessary funds via our equity
placing in April 2022 to ensure our running costs are covered
(before one-offs and exceptional items) until receipt of Ruvuma
revenues commences.
Aminex's non-operating strategy has made it a stronger, more
secure company with a low-cost base and an entirely carried
position on Ruvuma and is debt free. It provides a solid financial
situation until the commencement of cash flow receipts from Ruvuma.
Moreover, APT has reduced the time to cash flow receipts with an
accelerated gas production plan, which is strongly supported by the
Tanzanian Government and aligned with its need for gas in the short
and medium term. The success of this strategy is now in sight as it
appears Ruvuma's revenue will come significantly sooner than our
original projection.
Ruvuma PSA
The Farm-Out completed with APT in October 2020 carries the
Company to material levels of production and revenue without the
need to return to shareholders for additional funding for the
development of the Ntorya field. This revenue is now projected
sooner, given the acceleration of production agreed upon between
the operator and the Tanzania Petroleum Development Corporation
("TPDC"). The Company holds a 25% interest in the Ruvuma PSA with a
US$35 million carry of its share of costs. The carry, equivalent to
US$140 million of gross field expenditure, is expected to see the
Company through to potentially significant gas production volumes
with commensurate revenues. The Farm-Out is a result of successful
exploration and evaluation work by Aminex, which recognised the
underlying value and opportunities in the Ruvuma Basin, while
effectively pivoting to a non-operating role to ensure full
exploitation of resources and de-risking the Company.
With the acquisition of 3D seismic data completed in November
2022 and the culmination of seismic data processing in March 2023,
we now have an optimal well location for CH-1 grounded in
significant 3D seismic data. We anticipate the spudding of CH-1,
and a workover of the Ntorya-1 well ("NT-1") later this year. We
also expect a completed well-test of the Ntorya-2 well ("NT-2")
soon, providing information that will facilitate the construction
of a 35-kilometre pipeline to the Madimba gas processing facility
by the Government of Tanzania. The full 3D seismic results will be
available by mid-2023 and will permit a thorough revision of the
gas reserve and resource potential for the field later in the year.
Finally, we expect to sign a Gas Sales Agreement and obtain a
Development Licence for the Ntorya Area, securing the long-term
development of Ruvuma imminently.
2023 will be a watershed year for the development of Ruvuma with
the completion of the 3D seismic survey, the monetising of this
extensive gas resource through production into existing
infrastructure and transportation to an established power and
industrial market in Tanzania. Since acquiring operatorship, APT
has continued demonstrating focused determination, technical
prowess, and a total commitment to the project.
Kiliwani North and Kiliwani South - Kiliwani North Development
Licence ("KNDL")
Orca Energy, via its subsidiary PanAfrican Energy Tanzania
("PAET"), is expected to complete its acquisition of 3D seismic
over its Songo Songo license area by Q3 2023. The new 3D seismic
programme includes an incursion of 12.5 km2 over part of the KNDL
that borders the Songo Songo field to the west as part of their
full-field survey. The data, at no cost to the KNDL partners, will
be valuable in identifying fault trends, improving reservoir
definition, and understanding the Kiliwani North and South
structures. We expect to receive processed data by the end of 2023
or early 2024, allowing Aminex to re-evaluate further prospectivity
of KNDL and opportunities for further development. It will enable a
more robust discussion with future partners to operate the asset
and secure additional funding through a farm-out. We have continued
with impairment of the Kiliwani North and Kiliwani South assets
during the year. We will update shareholders with progress in due
course.
Nyuni Area PSA
In April 2022, we commenced a process with the relevant
authorities in Tanzania to return the licence, given our belief
that although the Nyuni Area acreage offers upside exploration
potential to complement the development projects at Ntorya and
Kiliwani North, the significant risks of exploration and the lack
of a farm-out partner was far too much risk for a company of our
size. The Tanzanian authorities requested that we continue efforts
to secure a farm-in partner over the next year, to which we have
agreed.
Cost Cutting
We continued to cut costs and reduce corporate overheads,
including reducing General and Administrative expenses ("G&A").
The Company saw a small increase of 5% in headline G&A for the
year of US$0.14 million compared to 2021, but a decrease in base
running costs (which excludes non-cash and one-off items), before
recharges, to US$1.46 million for the year, compared with US$1.81
million for 2021, a reduction of 19% (see Finance Review for
further details). The cumulative annual reductions in the Company's
gross G&A costs (before one-off expenses and exceptional items)
to US$1.46 million per annum in 2022 represents a 72% reduction
from 2018 levels. Through these cost saving initiatives, the
Company has established an appropriate structure of capabilities
and competencies that match the current requirements of the
business with a more flexible approach that de-risks our business
and can help create or attract strategic opportunities.
Outlook and Funding
On 1 April 2022, we announced the fully subscribed placement for
approximately US$4.35 million, providing an essential pillar in our
effort to de-risk and anchor value. The funds ensure a solid
financial foundation for the Company through to the expected
commencement of cash flow receipts from Ruvuma. We are thankful for
the participation of all the investors, including our largest
shareholder, Eclipse Investments LLC.
We expect 2023 to be a decisive year with significant
information flow regarding multiple workstreams. The operator's
capacity to run numerous critical negotiations and a significantly
broader technical engagement, fully supported by the Tanzanian
authorities, has significantly shortened the time to gas
production, now targeted for October 2023. This development has
shifted the narrative of Ruvuma, further de-risking the project
from a dependence on the spudding and outcome of CH-1 to a more
anchored and broader development effort as we move toward early gas
production. Such de-risking continues to honour the upside
potential that will come from the drilling of CH-1, the 3D seismic
interpretation, and the full development of the field. These
developments are potential game-changers for all stakeholders in
the Ruvuma development.
Finally, I would like to thank our shareholders for their
continued support and patience and hope that our operations in 2023
will ultimately reward us all with success on Ntorya.
Yours sincerely,
Charles Santos
Executive Chairman
Ends
For further information:
Aminex PLC +44 203 355 9909
Charles Santos, Executive Chairman
Davy +353 1 679 6363
Brian Garrahy
Shard Capital Partners +44 207 186 9952
Damon Heath
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