Aminex PLC is pleased to announce its audited financial results for the year ended 31 December 2021.
Highlights
Outlook
Successfully raised approximately GBP3.3 million (approximately US$4.4 million) before expenses to fund the Company to the expected receipt of revenue from first gas production at the Ntorya field, currently projected for end of 2024
Company debt-free on the completion of the recent equity raise
ARA Petroleum Tanzania Limited ('APT') continue to progress operations at Ruvuma PSA, with Chikumbi-1 drilling planned for November 2022
Agreement reached with Pan African Energy Tanzania ('PAET') to utilise their high-resolution 3D seismic campaign, targeting a mid-year start, to receive approximately 12.5km-2 of valuable new high-resolution 3D coverage over KNDL, at no cost to the Kiliwani North joint venture
During 2021
Ruvuma joint venture granted a two-year extension to its licence under the Ruvuma PSA from the Ministry of Energy of Tanzania allowing for the completion of the acquisition of the 3D seismic survey, the drilling and testing of the Chikumbi-1 well, and the design and submission to the authorities of a Field Development Plan to grant a 25-year Development Licence
APT progressed the seismic programme on the Ruvuma PSA and completed the tendering process of an extensive 3D seismic programme with mobilisation of crew and equipment
Ruvuma PSA Farm-Out Carry of US$35 million covered Aminex for all 2021 Ruvuma costs
Receipt of outstanding monies owed for past gas sales to the Tanzania Petroleum Development Corporation, resulting in a net cash inflow to the Company of approximately US$1.85 million
Reduction in gross G&A costs (before one-off costs and exceptional items) to below US$1.5 million per annum in 2022, representing a 75% reduction from 2018 levels
Loss for the year of US$8.56 million (2020: loss of US$6.14 million)
As I wrote last year, we live in unprecedented and complex times. Just two years ago, in April 2020, energy prices were at historic lows; COVID-19 significantly impacted the oil and gas industry, forcing energy companies to review their operations, in some instances retrenching and, most importantly, cutting costs. Today, energy prices, already rising as the world exits from the pandemic with disrupted supply chains and the lack of investment in new oil and gas projects, face another significant crisis, the invasion of Ukraine and the sanctions taken against Russian oil and gas exports. These crises have pushed energy prices close to historic highs, causing a reassessment of the importance of fossil fuels, particularly natural gas, which had been ignored by many.
Although the macro-political uncertainty and conflicting policies around hydrocarbons continue to cloud the energy picture, we believe that the demand for gas globally will continue to grow. We also see positive changes regarding the development of natural gas in Tanzania, witnessing firsthand these changes in our successful negotiations with the government over the outstanding Kiliwani receivables. In four months, we negotiated a settlement of the four-year outstanding receivables, thanks in large part to the willingness of the Tanzanian authorities to finally resolve the matter.
Moreover, Tanzania has an energy deficiency and has embarked on further industrialisation development programmes which has seen the planning and construction of numerous facilities along existing gas delivery infrastructure either directly connected to or in close proximity to our Tanzanian assets and which are expected to increase local gas demand significantly in the near future. In addition, it has been reported that discussions have been held between Tanzanian Government officials and their counterparts in neighbouring countries to explore the possibility of securing a long-term supply of gas from Tanzania and adding 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 in the future.
Non-Operating Strategy
The global developments and positive changes in Tanzania have confirmed the importance of our strategy to move from an operating to a non-operating business, which has enabled us to de-risk while anchoring shareholder value.
Our non-operating corporate strategy rests on four pillars: (i) our successful completion of the Ruvuma Farm-Out to ARA Petroleum Tanzania Limited ('APT'), a highly competent and well-funded Operator; (ii) our significant cost-cutting, which has reduced our operating expenses by nearly 75 percent over the past four years; (iii) our successful negotiation of the Kiliwani receivables and (iv) receipt of funds from our recent equity placing which are forecast to cover our running costs (before one-off and exceptional items) until receipt of Ruvuma revenue, planned for the end of 2024. This de-risking strategy has made Aminex a stronger company with a low-cost base and entirely carried position on Ruvuma, providing a solid financial position until the commencement of cash flow receipts from Ruvuma. It will also allow the Company to utilise its solid financial position to grow further.
Ruvuma PSA
It is essential to remind shareholders that 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 any additional funding for the development of the Ntorya field. The Company holds a 25% interest in the Ruvuma PSA with a US$35 million carry of its share of costs. It is expected that the carry, which is equivalent to US$140.0 million of gross field expenditure, will see the Company through to potentially significant volumes of gas production with commensurate revenues. The Farm-Out represents the culmination of many successful years of exploration and evaluation work by Aminex, which recognised the underlying value and opportunities that could be gained in the Ruvuma Basin. This non-operating position has become a cornerstone of the Company's de-risking strategy.
2022 will see important progress on Ruvuma with the completion of the 3D seismic survey, the drilling and testing of Chikumbi-1 and the integration of the seismic and well results to formulate a Field Development Plan ('FDP') for the Ntorya gas-field. 2022 will therefore be a significant year for Aminex and we eagerly await the spudding of Chikumbi-1 in November 2022. The current operations represent a significant step towards monetising this extensive gas resource through production into existing infrastructure and transportation to an established power and industrial market in Tanzania. APT, since acquiring operatorship, has demonstrated both focused determination and commitment to move the project forward.
Contact:
Tel: +202 2785 0023
Fax: +202 2591 8044
AMINEX PLC 
