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Aminex on track in Tanzania

Drilling will begin late this quarter and is expected to take between 45 and 60 days.
Aminex on track in Tanzania
A lot of the preparatory work is now complete ahead of drilling,

Aminex plc (LON:AEX) said a drill rig has now been mobilised following the completion of civil works at the Ntorya-2 site in Tanzania.

Around 1.5km from Ntorya-1, the second well will target 153bn cubic (BCF) feet of gas.

Aminex, which owns 75% of the Ruvuma acreage that is host potentially to up to 1trln cubic feet of gas, sees Ntorya-2 as a low risk appraisal project.

Work will begin late this quarter and is expected to take between 45 and 60 days.

The original well, completed more in 2012, flow tested at 20mln cubic feet of gas a day with 139 barrels of gas condensate.

Ntorya-2 is being drilled into thicker part of the sand body located on the seismic data in 2014.

Aminex’s partner is fellow AIM explorer Solo Oil PLC (LON:SOLO).

The area in question lies just 20 kilometres from the Mtwara to Dar es Salaam gas pipeline which was commissioned in late 2015.

It is transporting gas from various fields, including the Kiliwani North Field, operated by Aminex and where Solo holds just over a 7% stake.

“Advancing the Ntorya appraisal and its commercialisation is now a key objective for Solo and we are pleased that rig mobilisation is now underway,” said Solo chairman Neil Ritson.

“The discovery of gas in high quality Cretaceous sandstone reservoirs in the onshore portion of the Ruvuma Basin represents very significant value and we look forward to confirmation of the spud date in due course."

Aminex followers remain upbeat

The shares, up 41% in the last three months, succumbed to some mile profit-taking to trade 5% lower at 1.9p, though Aminex followers remained upbeat.

“We are very encouraged to see rig mobilisation underway and look forward to confirmation of the Ntorya-2 spud date as this approaches at Ruvuma, where we see considerable unrisked potential to complement the cash generation emerging from Kiliwani North,” said Craig Howie of broker Shore Capital.

In a recent interview Aminex boss Jay Bhattacherjee said the new phase of work in Tanzania aimed to establish the kind of production that can sustain and self-fund the group’s continuing expansion.

This, he said, was the “holy grail” for all exploration and production companies.

It has taken more than four years for Aminex, to land the funding for two follow-up holes.

Cash injection 

The injection came this summer, with Oman’s Zubair Corporation cornerstoning a £19.5mln share placing.

Aminex’s plan is to complete Ntorya-2 and 3 in fairly quick succession with the aim of bringing one of two into production soon after.

The first will appraise the original discovery, which came in at 70bn cubic feet, while the second will assess the potential of the Cretaceous and Tertiary reservoirs, estimated to be host to 1.5trln cubic feet of gas.

Discoveries could be brought on-stream using the main Ruvuma pipeline and facilities, which connects Kiliwani North and became operational last year.

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