TIDMAEX
RNS Number : 9279H
Aminex PLC
11 April 2022
11 April 2022
FINAL RESULTS for year ended 31 december 2021 AND ANNUAL
REPORT
Aminex PLC ('Aminex' or the 'Company') 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)
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 2021
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,
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.
Kiliwani North and Kiliwani South - Kiliwani North Development
Licence ("KNDL")
During the year, the Company settled its outstanding dispute
over payments for past gas sales from the Kiliwani North
Development Licence with the Tanzania Petroleum Development
Corporation ("TPDC"). The Company appreciates the TPDC's
constructive negotiations and satisfactory resolution of the
matter.
As set out in more detail in the Operations Report, following
the Company's transition to a non-operator strategy any development
of the KNDL is dependent on the identification of an experienced
partner to operate the asset and the securing of additional funding
through a farm-out. The Company has been actively pursuing farm in
partners to fund and operate the asset but in light of the delays,
caused by late payment for gas, the outstanding commercial terms to
be agreed, coupled with the move to a non-operator strategy, the
Kiliwani North and Kiliwani South assets have been impaired during
the year. We will update shareholders with progress on any farmout
in due course. We are however, pleased to report that Orca Energy,
via its subsidiary PanAfrican Energy Tanzania ("PAET"), will
acquire some 13 km2 new 3D seismic data over part of the KNDL that
borders the Songo Songo field to the west as part of their new
full-field survey.
Nyuni Area PSA
Two years have passed since Aminex, through its wholly owned
subsidiary, Ndovu Resources Limited, first notified the Tanzanian
Ministry of Energy of its willingness to move into the Second
Extension Period, and there is still no agreement on terms. The
First Extension expired on 27 October 2019. Given the dramatic and
unprecedented global factors over the past two years that have
negatively impacted the energy investment climate and fossil fuel
projects, including Nyuni, a farm-out partner is essential in order
to provide the necessary funding and to mitigate the associated
risks. Accordingly, we have sought partners over the past 18
months, to participate in the exploration and development of Nyuni
but these approaches have failed to produce any interest in the
project, reinforcing the present PSA's lack of perceived
commercial
viability. Although we believe 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 give us little alternative but
to return the licence to the Ministry. We have recently commenced
this process with the relevant authorities in Tanzania.
Cost Cutting
We continued to cut costs and reduce corporate overheads,
including reducing General and Administrative costs ("G&A").
Although the Company saw an increase in G&A expenditure during
the period compared to the same period in 2020, this increase
represents the one-off associated costs of actions taken during the
period to realise further cost savings. On a like-for-like basis,
the cost savings made in the period compared to the same period in
2020 are over 30%. I am happy to report the Company reduction in
gross G&A costs (before one-off costs and exceptional items) to
below $1.5 million per annum in 2022, representing a 75% reduction
from 2018 levels. Through making these 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 derisks 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 $4.4 million. This represents an important
development for the Company and is 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 look forward to
the completion of the 3D seismic survey and the drilling of the
Chikumbi-1 well later this year. We are thankful for the
participation of all the investors, including our largest
shareholder, Eclipse.
Finally, I would like to thank our existing shareholders for
their continued support and patience and hope that our operations
in 2022 will finally reward us all with success on Ntorya.
Yours sincerely,
Charles Santos
Executive Chairman
Ends
For further information:
Aminex PLC +44 20 3198 8415
Charles Santos, Executive Chairman
Davy +353 1 679 6363
Brian Garrahy
Shard Capital Partners +44 207 186 9952
Damon Heath
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END
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