Aminex PLC FIRST GAS PRODUCTION FROM KILIWANI NORTH (2898U)
April 06 2016 - 2:00AM
UK Regulatory
TIDMAEX
RNS Number : 2898U
Aminex PLC
06 April 2016
Aminex plc
("Aminex" or "the Company")
FIRST GAS PRODUCTION FROM KILIWANI NORTH
Aminex PLC, the Africa-focused oil and gas production and
development company (LSE: AEX, ISE: AEX), is pleased to announce
first gas production from its Kiliwani North gas field in Tanzania.
The Kiliwani North Development Licence is operated by a
wholly-owned subsidiary of the Company with a 55.575% working
interest (expected to reduce to 51.75% as a result of a partial
disposal announced on 4 April 2016) and the field will provide the
Company with its first significant African production revenues.
Highlights:
-- Initial production commenced from the Kiliwani North-1 well
("KN-1") on 4 April. KN-1 is tied into the regional pipeline
infrastructure and will deliver gas to the new adjacent Songo Songo
processing plant, ultimately serving the local power market.
-- Production is expected to build up to an anticipated
production rate of 25-30 mmcfd (approximately 4-5,000 barrels of
oil equivalent per day gross) ("Commercial Production Rate") over
the next 90-100 days.
-- All gas produced during the build-up to full production rates
will be paid for under the terms of a recently signed Gas Sales
Agreement signed with the sole buyer, Tanzania Petroleum
Development Corporation ("TPDC"). Aminex will receive US$3.00 per
mmbtu (approximately US$3.07 per mcf) with expected net cash
revenues of US$10-15 million per annum.
Aminex will receive all revenue in United States Dollars and the
contractual gas price of US$3.00 per mmbtu will be adjusted
annually by applying an agreed United States Consumer Price Index.
The gas price is not linked to any commodity price so importantly
is unaffected by current commodity market conditions. The gas
delivery point is to be at the outlet flange of the Kiliwani North
wellhead and, by selling the gas at the wellhead, the joint venture
partners will not be liable for pipeline transportation and
processing fees.
Initial production rates will be carefully managed to allow for
testing and commissioning of the gas processing plant and pipeline,
while recording critical pressure and flow rate measurements to
determine the optimal flow rate to maximize the life of the
reservoir. Together with TPDC the Company plans to conduct a well
test during the production build up to determine the optimal flow
rate. It is this optimal flow rate that will become the Commercial
Production Rate and the Company intends to flow gas at this rate
for as long as possible prior to a natural decline in
production.
KN-1 represents contingent resources (2C) of gross 28 billion
cubic feet gross. With first production complete Aminex expects to
book reserves for Kiliwani North later this year.
Aminex CEO, Jay Bhattacherjee, commented: "This is a significant
moment for Aminex, its shareholders and Tanzania, and is the
culmination of a tremendous amount of hard work by all involved.
First gas at Kiliwani North marks the transition of the Company
from developer to producer in Africa and sets us on the path for
growth as we begin to generate cash. The Company looks forward to
its exciting appraisal and development programme in the Ruvuma
Basin which will potentially add further revenues in due
course."
For further information:
Aminex PLC +44 20 7291 3100
Jay Bhattacherjee, Chief
Executive Officer
Max Williams, Chief
Financial Officer
Corporate Brokers
Shore Capital Stockbrokers,
Jerry Keen +44 20 7408 4090
Davy, Brian Garrahy +353 1 679 6363
Camarco +44 20 3757 4980
Billy Clegg
Gordon Poole
Notes to editors
Aminex PLC is a gas and oil production, development and
exploration company which is premium listed on the London Stock
Exchange and primary-listed on the Irish Stock Exchange. Aminex is
run by an established management team which is aligned with
shareholders through its 11.5% equity stake. The Company's focus is
its three licences in Tanzania, where it was one of the first
independent oil companies to enter the country in 2002:
Kiliwani North Development Licence (55.575%) Operator
The Kiliwani North Field has been independently ascribed with 28
BCF gross contingent (2C) resource and will produce dry clean gas
under high natural pressure (1,600 psi) from the high quality
Neocomian late Cretaceous reservoir. The Kiliwani North -1 well
tested at 40 mmcfd. The gas will be sold at the well head in $US at
a fixed price and fed directly into the Tanzania's new pipeline
infrastructure to Dar es Salaam. As operator, Aminex has control of
the production ramp up, work programme and quantity and timing of
future capital expenditure.
Ruvuma Production Sharing Agreement (75%) Operator
The Ruvuma acreage includes Aminex's Ntorya-1 onshore Cretaceous
gas discovery which has been independently ascribed 70 BCF gross
contingent (2C) resource in the Ruvuma Basin. The well tested at 20
mmcfd. Aminex is currently appraising the discovery as well as
continuing exploration activity on the licenced area in the
prospective Ruvuma Basin.
Nyuni Area Production Sharing Agreement (90%) Operator
The Nyuni Area acreage offers high impact exploration and has
been ascribed 4.2 TCF prospective resource. Drilling success in the
region based on 3D seismic has been over 90%.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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