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Aminex shares soar as it inks farm-out agreement with Omani conglomerate

The Africa-focused oil and gas producer said that in exchange for 50% of its working interest in the Ruvuma PSA, Zubair would conduct a minimum work programme
Drill workers
Aminex will retain a 25% interest in the Ruvuma PSA

Aminex plc (LON:AEX) shares soared in mid-afternoon trading Wednesday after it signed a binding farm-out agreement with Omani industrial conglomerate The Zubair Corporation.

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; acquiring, processing and interpreting 3D seismic data over a minimum of 200 square kilometres within the Ntorya project area; and establish an early production system to achieve accelerated first gas development at Ntorya to a minimum gross rate of 40mln cubic feet of gas per day (MMcf/d), around 6,700 barrels equivalent.

WATCH: Aminex agrees 'transformational' farm-out deal for Ntorya in Tanzania

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 and was expected to be developed to production without the need for new funding by Aminex.

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."

The announcement was also noted by AIM-listed oiler Solo Oil PLC (LON:SOLO), who also saw its shares jump as it holds a 25% interest in the Ntorya project.

Aminex also said in a separate announcement that it would hold its Annual General Meeting at 2pm today.

Aminex shares were up 28% at 2.8p, while Solo Oil shares were up 26% at 2.9p.

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