Aminex H1 losses widen as oil and gas production slips

Oil and gas junior Aminex (LON:AEX) reported a decline in its interim revenues due to lower production in the US but said there was potential to more than make up for it.

Pre-tax losses widened from US$1.15 million to US$2.49 million as revenues slipped from US$3.84 million to US$2.6 million due to a decline in production from 24,000 bbl (barrels of oil) to 16,000 bbl and from 302,000 Mcf (million cubic feet of gas) to 133,000 Mcf.

The revenues of US$2.6 million were made up of US$1.85 million oil and gas revenues and US$0.75 million oilfield services and supplies revenues.

The decline was due to a slip in production from the Upper Andrau zone in the Sunny Ernst-2 well ahead of partner approval to recomplete the well and perforate the "S" sand.

Aminex said it would lobby for the completion of behind-pipe reserves in the 60 foot "S" sands in the Sunny Ernst-2 well at Alta Loma, which had the potential to significantly increase its revenues and more than replace declining production lost from Upper Andrau.

The company expects to make further progress at its Nyuni PSA (production sharing agreement). This will include the development of the Kiliwani North gas field following the resolution of issues that have stalled expansion of the gas treatment plant at Song-Songo Island for the past two years and the planning of its future exploration drilling programme with a “far higher level of confidence” than before after a mapping exercise firmly established the further potential of the acreage.

The company was upbeat about its potential in Tanzania.

“Tanzania is increasingly becoming a focus of industry interest as major international oil companies prepare their drilling programmes.  Aminex, an early entrant, has already drilled the most significant exploration discovery in the country in recent history, Kiliwani North, and intends to continue exploring and developing its Tanzanian assets in a very positive manner,” said Chairman of Aminex Brian Hall.

Nyuni has a reported contingent resource GIIP (gas initially in place) of over 200 BCF (billion cubic feet), equivalent to roughly 30 million bbl (barrels) and prospective resource GIIP of over 2.5 TCF (trillion cubic feet, or equivalent to roughly 400 million bbl.

In Aminex’s 37.5% interested onshore Ruvuma Basin, operator Tullow Oil (LON:TLW) is set to drill a follow up to the Likonde-1 well in H1 2011.

Preliminary work on the new Korean PSC (production sharing contract) is already in progress, but no field work in the East Sea is anticipated during the remainder of this year and neither is further drilling in Egypt, where the company has recently extended its PSC to second term.

Drilling at the Alta Loma field in Texas that was initially scheduled for this year will likely take place in 2011.

In another US update, Aminex said that test results from the recently drilled well in the Shoats Creek property to test the Wilcox prospect would be available shortly.

Investors didn’t respond well to the results with shares in the company slipping 9.5%.