Source:
http://boards.fool.co.uk/MessagePrint.asp?mid=11384214
The Motley Fool UK Discussion Boards
Previous Page
Personal Shares Boards / Paulypilot's Pub
URL: http://boards.fool.co.uk/Message.asp?mid=11384214
Subject: 2009 Share Comp Entry Aminex Date: 5/1/09 20:48
Author: DearLeader Number: 117001 of 117038
--------------------------------------------------------------------------------
The Company
http://www.aminex-plc.com/
and from that;
Aminex PLC is an established upstream oil and gas company, listed on the London and Irish Stock Exchanges.
'Upstream' refers to a company involved in the exploration and production sectors within the oil and gas industry. The earlier stages if you like. ('Downstream' refers to a company involved in the refining, marketing and distribution of that oil or gas. i.e. after the production phase.)
Symbol: AEXMarket Cap: £17.26mCurrent Share Price: 7.13pSP Year's Range: 6.5p - 27.5pShares In issue: 242.13m
There is no dividend. You can hold it in an ISA.
From their Interim statement in August:
Aminex Group revenues at US$4.5 million are 54% ahead of the 2007 comparative period, mainly as a result of higher oil and gas prices. The loss on operating activities before other costs at US$1.37 million shows a 10% improvement over 2007. During the current period, the Group’s disposal of its interest in the share capital of Amicoh Resources Ltd which holds the Manja exploration licence in Madagascar gave rise to a non-cash charge of US$3.38 million, representing the write off of past exploration costs previously capitalised, after offsetting sales proceeds. The resulting loss for the period amounts to US$4.64 million. However, if the Madagascar write off of US$3.38 million was excluded, the loss for the period on a like-for-like basis would be US$1.26 million which would represent a 21% improvement over the first half of 2007.
From the recent analyst presentation dated 19th November 2008 they had net cash at mid-year of $10.7 million.
From the same presentation the annual overheads of the Aminex Group are $4.1 million
The Full SP
Well, lets talk about the performance of the share-price for a while.
Obviously poor, along with pretty much everything else with the high point occuring early June just after the announcement that they had tested the Tanzanian Kiliwani North-1 well at 40 million cubic feet/day of stabilised gas flow. The low point is quite recent, on the perception that they will need to raise funds for the imminent drilling in Southern Tanzania. As with other companies across the board at the moment any kind of fund raising or possible fund raising will immediately be factored into the share-price pushing it down.
It's very easy to break out 'the sandwich board' (catchy name for a TMF Doom and Gloom board...) and hit the streets wailing about the end of the stock-markets, mayan prophecies (less then 4 years to go folks) and society breaking down. IMO the share price has been unfairly hammered and going back just as far as Summer with all the good news and success that has happened, I would of thought anyone mad if they had predicted this valuation for Aminex. Like I say, IMO.
Operations
Aminex plc has operations in Tanzania, Egypt, North Korea, Kenya and the USA. It has recently 'moved it' out of Madagascar.
They also own AMOSSCO Ltd, an international oilfield service, supply and logistics company:
http://www.amossco.com/
Lets start with the easy bits.
Egypt
Last year they drilled two unsuccessful wells with the partners at WEEM.
http://www.aminex-plc.com/projects/egypt
Both NW Tanan-1 (No hydrocarbons) and Malak-1 (non-commercial HC's) did not cost Aminex Petroleum Egypt Ltd anything as they have a free carry to commercial production (AEX share is 10%).
There should be another well drilled this year as part of a three well drilling programme. The same rig, Rig ZJ-46, should be available for this well too.
A partner with Aminex is Groundstar Resources listed on the TSX VENTURE over in Canada. This link will get their announcements:
http://www.marketwirecanada.com/mw/search.do?params=&grp...
Kenya
Aminex has PSAs (production sharing agreements) with blocks L17 & L18 in Southern Kenya. There is seismic and they are down for some more this year but bit of a back burner this one I suspect as there are no drilling commitments. I can't see them wasting any valuable funds.
North Korea
There are lots of words you can use to describe this acreage that Aminex has the rights to. Prospective. Worthless. Radioactive. Well don't hold your breath on this one because Aminex didn't even mention it in the recent presentation. Quite rightly too. Can you imagine trying to raise capital in this climate for drilling or find a cash rich partner for farming in to the DPRK?
Importantly they are spending no money on this at all.
So, the first three areas that Aminex are involved in do not require any large amounts - if any - of cash being spent bar the odd flight and their share of the further seismic in Kenya (if that goes ahead).
Now for the crucial bits.
USA
South Weslaco, Texas
AEX - 25%
Aminex is involved in four gas producing wells SW35, SW36, SW37 & SW38. SW39 will be conpleted in March according to Activa's latest:
http://www.activaresources.com/fileadmin/user_upload/ACTIVA%...
From the recent presentation it looks like they are thinking of selling off this producing asset. Any cash generated is used up by drilling obligations.
Alta Loma, Texas
AEX - 37.5%
They already produce from SE-1 and this from the SE-2 announcement is worth a full read:
http://www.aminex-plc.com/files/081030_Significant_Well_Test...
Another sucess. Key bits as you read through are 'significant' 'materially exceeded' and 'multiple'. The Upper Andrau is on production at 6.5 mmscfd and 350 bcpd generating immediate cash-flow for Aminex. So gas and condensate. Prices are far from their highs for these at the moment but that may change in the near future.
Coronado Energy (owned by El Paso - http://www.elpaso.com/ ) is the operator of this well but Aminex has the larger percentage. Lets see what happens when they test the 'S' sand...if that is good then the lower TAQUARD formation that they were meant to be going for before problems hit may warrant another close well.
There are valuations on Aminex's website for the US reserves on a 1P & 2P basis which dwarf the current Market Cap. of the whole company. Again at a higher oil price. Here is the report for Alta Loma without the latest SE-2 sucess.
http://www.aminex-plc.com/files/AltaLomaEast_2007Reserves.pd...
It uses $85 for Oil and $7.50 for gas. Worth bearing that in mind.
Shoats Creek, Louisiana
Oil and Gas production. They have recently received free 3D seismic over this acreage from Forest Oil - http://www.forestoil.com/ . There are 20 old wells on this field and Aminex are redeveloping (workover) choice ones using the new seismic. 2 wells currently produce 40bopd. Partners will be brought in for development.
Reserves here:
http://www.aminex-plc.com/files/Shoats_Creek_2007Reserves.pd...
Have a look at the 2P for the 9 x Wilcox Wells, as mentioned of being an interest in the recent presentation.
http://www.aminex-plc.com/files/081119_Analysts-Briefing_Nov...
They need to bring someone in as partner sharpish and change some of those 2P's to 1P's.
Somerset, Texas
'Texas Sour' Heavy crude oil production here again from old wells. Below $55 oil they are not profitable.
Tanzania
The Biggy.
Aminex has acreage in three areas of Tanzania. Ruvuma, Nyuni and Songo Songo West. Ruvuma is in the South along the border with Mozambique and Nyuni and SS West is further North.
Ruvuma
Aminex has a PSA (Production Sharing Agreement) covering 12,000 sq km of the Ruvuma area in Southern Tanzania. It comprises of the Lindi Licence the North of the area and the Mtwara licence along the border. Mtwara is totally onshore. Lindi includes a narrow offshore area. They are both adjacent to the Mnazi Bay gas field operated by Artumas who also have an interest over the border in Mozambique with the 'Rovuma' licence area.
They are due to drill two prospects here for oil starting early 2009, end Q1/start Q2, and are 50/50 partnered by Tullow. Tullow took over Hardman. Will anyone take over Tullow before the drilling starts? Who will partner Aminex in the eluded to farm-in? Is there the money? Do Tullow have the money for this? Plenty of questions/possibles here. More specifics regarding the prospects targeted are in the latest presentation.
Songo Songo West
Aminex has a PSA covering 504 sq km to the West of the Songo Songo Gas field. Here they are 50/50 partnered by Key Petroleum who are listed downunder on the ASX. KEY are also one of the partners at Nyuni and are headed by Ted Ellyard he once of Hardman Resources. Drilling obligations are one well within the first three years. There is pretty good 2D seismic here already and I suspect this will be on a back burner until the sucess that they have had in the Nyuni area is monetised.
Nyuni
This is the area that sparked the jump in the share price in June as the AGM was going on. Aminex has 40%.
Kiliwani North-1 flowed 40MMcfd of gas under full production test conditions. This is nice. :-) There is a pipeline as used by the nearby Songo Songo gas field and Aminex were assured of access. The trouble is that there is not enough spare capacity. This is not nice. Various upgrades are to be done which will increase the amount of gas that can be piped. Until the extent of the discovery at KN-1 is quantified by further seismic and possibly another well, then the justification for another plant/pipeline is er... not justified.
How much is down there? You can get lots of speculation over on the KEY board on Copper http://www.hotcopper.com.au/
They are supposed to be submitting a full development plan to the government and we await the RNS confirming firm plans and timelines as well as financial commitments.
Of course there are lots of other prospects in the PSA area too but they need to get the cash flowing.
I do hold shares and have recently added below 7p taking a loss on another share, as I believe the upside here to be better. There is some risk with farm-ins/financing the explo programme at Ruvuma and as mentioned has been the main drag along with the usual macro-suspects in the economy. They should be generating cash from the US operations and if there is a sale of certain elements then that would resolve the uncertainties of financing the drilling. Not really the time to be wanting to sell anything at the moment though, but these are producing assets. Do the partners involved in their acreage have cash flow problems of their own? Well, nobody said making money at this was easy so at some point you have to take a bit of a gamble.
Cheers.
DearLeader
http://boards.fool.co.uk/MessagePrint.asp?mid=11384214
The Motley Fool UK Discussion Boards
Previous Page
Personal Shares Boards / Paulypilot's Pub
URL: http://boards.fool.co.uk/Message.asp?mid=11384214
Subject: 2009 Share Comp Entry Aminex Date: 5/1/09 20:48
Author: DearLeader Number: 117001 of 117038
--------------------------------------------------------------------------------
The Company
http://www.aminex-plc.com/
and from that;
Aminex PLC is an established upstream oil and gas company, listed on the London and Irish Stock Exchanges.
'Upstream' refers to a company involved in the exploration and production sectors within the oil and gas industry. The earlier stages if you like. ('Downstream' refers to a company involved in the refining, marketing and distribution of that oil or gas. i.e. after the production phase.)
Symbol: AEXMarket Cap: £17.26mCurrent Share Price: 7.13pSP Year's Range: 6.5p - 27.5pShares In issue: 242.13m
There is no dividend. You can hold it in an ISA.
From their Interim statement in August:
Aminex Group revenues at US$4.5 million are 54% ahead of the 2007 comparative period, mainly as a result of higher oil and gas prices. The loss on operating activities before other costs at US$1.37 million shows a 10% improvement over 2007. During the current period, the Group’s disposal of its interest in the share capital of Amicoh Resources Ltd which holds the Manja exploration licence in Madagascar gave rise to a non-cash charge of US$3.38 million, representing the write off of past exploration costs previously capitalised, after offsetting sales proceeds. The resulting loss for the period amounts to US$4.64 million. However, if the Madagascar write off of US$3.38 million was excluded, the loss for the period on a like-for-like basis would be US$1.26 million which would represent a 21% improvement over the first half of 2007.
From the recent analyst presentation dated 19th November 2008 they had net cash at mid-year of $10.7 million.
From the same presentation the annual overheads of the Aminex Group are $4.1 million
The Full SP
Well, lets talk about the performance of the share-price for a while.
Obviously poor, along with pretty much everything else with the high point occuring early June just after the announcement that they had tested the Tanzanian Kiliwani North-1 well at 40 million cubic feet/day of stabilised gas flow. The low point is quite recent, on the perception that they will need to raise funds for the imminent drilling in Southern Tanzania. As with other companies across the board at the moment any kind of fund raising or possible fund raising will immediately be factored into the share-price pushing it down.
It's very easy to break out 'the sandwich board' (catchy name for a TMF Doom and Gloom board...) and hit the streets wailing about the end of the stock-markets, mayan prophecies (less then 4 years to go folks) and society breaking down. IMO the share price has been unfairly hammered and going back just as far as Summer with all the good news and success that has happened, I would of thought anyone mad if they had predicted this valuation for Aminex. Like I say, IMO.
Operations
Aminex plc has operations in Tanzania, Egypt, North Korea, Kenya and the USA. It has recently 'moved it' out of Madagascar.
They also own AMOSSCO Ltd, an international oilfield service, supply and logistics company:
http://www.amossco.com/
Lets start with the easy bits.
Egypt
Last year they drilled two unsuccessful wells with the partners at WEEM.
http://www.aminex-plc.com/projects/egypt
Both NW Tanan-1 (No hydrocarbons) and Malak-1 (non-commercial HC's) did not cost Aminex Petroleum Egypt Ltd anything as they have a free carry to commercial production (AEX share is 10%).
There should be another well drilled this year as part of a three well drilling programme. The same rig, Rig ZJ-46, should be available for this well too.
A partner with Aminex is Groundstar Resources listed on the TSX VENTURE over in Canada. This link will get their announcements:
http://www.marketwirecanada.com/mw/search.do?params=&grp...
Kenya
Aminex has PSAs (production sharing agreements) with blocks L17 & L18 in Southern Kenya. There is seismic and they are down for some more this year but bit of a back burner this one I suspect as there are no drilling commitments. I can't see them wasting any valuable funds.
North Korea
There are lots of words you can use to describe this acreage that Aminex has the rights to. Prospective. Worthless. Radioactive. Well don't hold your breath on this one because Aminex didn't even mention it in the recent presentation. Quite rightly too. Can you imagine trying to raise capital in this climate for drilling or find a cash rich partner for farming in to the DPRK?
Importantly they are spending no money on this at all.
So, the first three areas that Aminex are involved in do not require any large amounts - if any - of cash being spent bar the odd flight and their share of the further seismic in Kenya (if that goes ahead).
Now for the crucial bits.
USA
South Weslaco, Texas
AEX - 25%
Aminex is involved in four gas producing wells SW35, SW36, SW37 & SW38. SW39 will be conpleted in March according to Activa's latest:
http://www.activaresources.com/fileadmin/user_upload/ACTIVA%...
From the recent presentation it looks like they are thinking of selling off this producing asset. Any cash generated is used up by drilling obligations.
Alta Loma, Texas
AEX - 37.5%
They already produce from SE-1 and this from the SE-2 announcement is worth a full read:
http://www.aminex-plc.com/files/081030_Significant_Well_Test...
Another sucess. Key bits as you read through are 'significant' 'materially exceeded' and 'multiple'. The Upper Andrau is on production at 6.5 mmscfd and 350 bcpd generating immediate cash-flow for Aminex. So gas and condensate. Prices are far from their highs for these at the moment but that may change in the near future.
Coronado Energy (owned by El Paso - http://www.elpaso.com/ ) is the operator of this well but Aminex has the larger percentage. Lets see what happens when they test the 'S' sand...if that is good then the lower TAQUARD formation that they were meant to be going for before problems hit may warrant another close well.
There are valuations on Aminex's website for the US reserves on a 1P & 2P basis which dwarf the current Market Cap. of the whole company. Again at a higher oil price. Here is the report for Alta Loma without the latest SE-2 sucess.
http://www.aminex-plc.com/files/AltaLomaEast_2007Reserves.pd...
It uses $85 for Oil and $7.50 for gas. Worth bearing that in mind.
Shoats Creek, Louisiana
Oil and Gas production. They have recently received free 3D seismic over this acreage from Forest Oil - http://www.forestoil.com/ . There are 20 old wells on this field and Aminex are redeveloping (workover) choice ones using the new seismic. 2 wells currently produce 40bopd. Partners will be brought in for development.
Reserves here:
http://www.aminex-plc.com/files/Shoats_Creek_2007Reserves.pd...
Have a look at the 2P for the 9 x Wilcox Wells, as mentioned of being an interest in the recent presentation.
http://www.aminex-plc.com/files/081119_Analysts-Briefing_Nov...
They need to bring someone in as partner sharpish and change some of those 2P's to 1P's.
Somerset, Texas
'Texas Sour' Heavy crude oil production here again from old wells. Below $55 oil they are not profitable.
Tanzania
The Biggy.
Aminex has acreage in three areas of Tanzania. Ruvuma, Nyuni and Songo Songo West. Ruvuma is in the South along the border with Mozambique and Nyuni and SS West is further North.
Ruvuma
Aminex has a PSA (Production Sharing Agreement) covering 12,000 sq km of the Ruvuma area in Southern Tanzania. It comprises of the Lindi Licence the North of the area and the Mtwara licence along the border. Mtwara is totally onshore. Lindi includes a narrow offshore area. They are both adjacent to the Mnazi Bay gas field operated by Artumas who also have an interest over the border in Mozambique with the 'Rovuma' licence area.
They are due to drill two prospects here for oil starting early 2009, end Q1/start Q2, and are 50/50 partnered by Tullow. Tullow took over Hardman. Will anyone take over Tullow before the drilling starts? Who will partner Aminex in the eluded to farm-in? Is there the money? Do Tullow have the money for this? Plenty of questions/possibles here. More specifics regarding the prospects targeted are in the latest presentation.
Songo Songo West
Aminex has a PSA covering 504 sq km to the West of the Songo Songo Gas field. Here they are 50/50 partnered by Key Petroleum who are listed downunder on the ASX. KEY are also one of the partners at Nyuni and are headed by Ted Ellyard he once of Hardman Resources. Drilling obligations are one well within the first three years. There is pretty good 2D seismic here already and I suspect this will be on a back burner until the sucess that they have had in the Nyuni area is monetised.
Nyuni
This is the area that sparked the jump in the share price in June as the AGM was going on. Aminex has 40%.
Kiliwani North-1 flowed 40MMcfd of gas under full production test conditions. This is nice. :-) There is a pipeline as used by the nearby Songo Songo gas field and Aminex were assured of access. The trouble is that there is not enough spare capacity. This is not nice. Various upgrades are to be done which will increase the amount of gas that can be piped. Until the extent of the discovery at KN-1 is quantified by further seismic and possibly another well, then the justification for another plant/pipeline is er... not justified.
How much is down there? You can get lots of speculation over on the KEY board on Copper http://www.hotcopper.com.au/
They are supposed to be submitting a full development plan to the government and we await the RNS confirming firm plans and timelines as well as financial commitments.
Of course there are lots of other prospects in the PSA area too but they need to get the cash flowing.
I do hold shares and have recently added below 7p taking a loss on another share, as I believe the upside here to be better. There is some risk with farm-ins/financing the explo programme at Ruvuma and as mentioned has been the main drag along with the usual macro-suspects in the economy. They should be generating cash from the US operations and if there is a sale of certain elements then that would resolve the uncertainties of financing the drilling. Not really the time to be wanting to sell anything at the moment though, but these are producing assets. Do the partners involved in their acreage have cash flow problems of their own? Well, nobody said making money at this was easy so at some point you have to take a bit of a gamble.
Cheers.
DearLeader
