Aminex. The great debate.

Coat of arms of Tanzania

In a Global storm but still safe.

The great Aminex debate. So just what’s changed here and why have Aminex slipped to 6p? Firstly lets take a look at the company.

Aminex are an established upstream oil and gas company with approx’ 20 years experience behind them with producing assets in Tanzania and the USA. They have been around for quite some time and have over the last 3 to 4 years flattered to deceive investors with many false dawns.The Tanzania assets are central to the Aminex core value. The Nyuni2 well (65% Aminex)  spudded on Friday 17th June. The company also plan to drill a well as part of the Ruvuma JV(37.5%Aminex) by the end of 2011. 14 weeks ago an independent report assigned 278 billion cubic feet gas in place to the Nyuni production sharing agreement in Tanzania. The more prospective resources – those that have been mapped from seismic but not yet drilled – amounted to 2.548 trillion cubic feet of gas from three separate prospect areas on the licence. The East African coastal margin of Tanzania IS PROVING TO BE A PROLIFIC OIL AND GAS BEARING REGION WITH INTEREST FROM  LEADING INDUSTRY PLAYERS such as Petrobas, Exxon-mobil,Tullow,Statoil big players are flocking to the area.

Having recently completed both an institutional and private investor placing that was over-subscribed at 8p the chances of further success in Tanzania look very likely. Their  Existing US production base in Louisiana and Texas  coupled with successful US exploration in 2010 are providing revenues for the development drilling programme of 2011. Aminex have a debt-free balance sheet and are more than capable of progressing the company this year. The NAV alone after dilution is coming in at approx’ 20p the current share price is roughly 165% below Net Asset Value. Development of  Aminexs’ Kiliwani North gas discovery is being fast-tracked for production. Indeed the more you look at them the more convincing the case becomes. The Tanzanian assets are all onshore or in shallow water; ease of access means low-cost drilling. Aminex’s 1P and 2P USA reserves are coming in AT 1P Net Oil mmbbl,683.0.  Net Gas Bcf,11,168.3.  Net Boe mmboe,2,544.4….   2P Net Oil mmbbl,1,304.1    Net Gas Bcf, 20,865.7    Net Gas Bcf,4,781.7.  They are also well-versed in the supply side of logistics in the oil industry due to their 100% owned subsidiary AMOSSCO. This means that Aminex fully understand the problems encountered on the supply side of oil exploration and are much better placed to deal with them than most.

So bearing all of the above in mind just what has happened here and more to the point what has changed re’ the company? There are several factors effecting this stock at the moment one is Ireland the other is Portugal and the latter is Greece. The reason why Aminex are down is due to the current Global uncertainty prevailing in the market. Institutions and private investors are bunkered down waiting for major defaults to occur, wallets are closed in times of fiscal uncertainty and a flight to cash occurs. Institutions HUNKER DOWN and take defensive positions against markets that could move against them. They have a Global Macro economic outlook based on CURRENT AND FUTURE EXPECTATIONS. lOOK AT THE VAST MAJORITY OF EXPLORATION COMPANYS WHETHER THEY BE MINING OR GAS/OIL THEY ARE ALL WITHOUT EXCEPTION TRADING SIGNIFICANTLY BELOW PREVIOUS HIGHS. Aminex are not immune from the current Bear market. It’s as simple as that. This is what has happened here.

So whats changed re’ the company? Absolutely nothing has changed. Aminex are still way under NAV and look and feel like a company that will make huge gains on the back of their Tanzanian/east African assets. The Kiliwani North GAS DISCOVERY of 2008 tested gas at a rate of 40 million cubic feet per day. IT’S STILL THERE and it hasn’t just vanished. The Ruvuma PSA covers 12,000 sq km, 80 per cent of it onshore, 20 per cent offshore.  Aminex have 37.5 per cent of the Tullow Oil-operated project.  “Tullow, the company behind the massive oil finds in previously neglected Uganda, drilled its first well in 2010, with the Likonde-1 well drilled to a depth of 3,647 metres with high gas readings throughout the length of the well bore from a depth of 200 metres. Net sand bodies with the potential to be oil and gas reservoirs totalled 250 metres in thickness, described by Aminex as “a massive reservoir section”.

Tullow are not there to make up the numbers they are a big hitter and will expect a return on their investment. In short it’s still all to play for here.  Global factors aside Aminex will push through and rise. There’s nothing wrong here with the company they are being buffeted by Global market forces nothing more nothing less!



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No Responses

  1. Tony says:

    Very Nice info Dan,

    It would be great and very much appreciated if you could prepare a similar report on Xcite.

    Have a nice day 🙂


  2. James says:

    Is it the opinion of the blog that default/Asian inflation etc etc is a temporary barrier rather than a structural flaw to growth?

  3. Tony says:

    Hi Dan, Left comment earlyier but it’s not shown up. Are youe moderating posts?

    Regards Tony