The Africa-focused oil and gas producer said that in exchange for 50% of its working interest in the Ruvuma production sharing agreement (PSA), Zubair would conduct a minimum work programme including the drilling, completion, and testing of the Chikumbi-1 well; a 3D seismic data survey over 200 square kilometres within the Ntorya project area; and establish an early production system to achieve first gas at Ntorya to a rate of 40mln cubic feet of gas per day (MMcf/d).
The company also said Zubair would pay US$5mln in cash in addition to fully carrying up to US$35mln in costs regarding the development of Aminex’s remaining 25% interest in the Ruvuma PSA, which would include the Ntorya project.
Aminex added that the agreement would accelerate development of its principal asset while also substantially reducing risks to the project.
Aminex chief executive Jay Bhattacherjee said: "With the Ntorya project carried to a minimum level of production it is now expected that the Company will be self-funded for further development,”
“Aminex continues to develop its Kiliwani and Nyuni assets and is undertaking a review of other opportunities which will deliver robust shareholder returns."
There is also positivity on the deal from Aminex's house broker Shore Capital, who see "significant potential" in its Ntorya project, which its remaining 25% stake still covers, as well as believing Aminex is "fully positioned to benefit from important operational catalysts (including Chikumbi-1 drilling) and subsequent progress towards early production from this valuable gas asset".
As of late-afternoon trading on 11 July, Aminex shares stand at 2.8p, while Solo Oil is at 3p, with respective market caps of £81mln and £10.7mln.
Resource upgrade delivered important catalyst
In February, the company revealed a major upgrade to the gas resources at the Ntorya project as part of an independent competent persons report produced by RPS Energy.
It follows the Ntorya-2 appraisal well success and an assessment of well testing. The project’s gas-initially-in-place increased to 1.87 trillion cubic feet, which is 44% more than Aminex’s previous in-house estimates. Compared to the prior independent assessment, the new number represents a 12-fold increase.
Ntorya’s contingent gas resource has now risen to 762.8bn cubic feet of gas, comprising 80.6bn cubic feet of gas that’s described as pending development – to be addressed by the planned initial three well operation.
Two of the three wells have so far been drilled, and the third is due later this year. The gas would be connected to a gas plant located some 33 kilometres away.
--Adds house broker comment--