With the significant backing of the Oman-based Eclipse Investments, the £65m capitalised Aminex (LON:AEX) appears to be looking forward to reporting ‘decisive’ news in 2024.
The Dublin-based company is engaged in the exploration, appraisal, development, and production of oil and gas assets, reserves, and resources.
The company operates through Producing Oil and Gas Properties, Exploration Activities, and Oilfield Services segments and has demonstrated an ability to find, appraise and develop fields successfully from initial concept through to production.
Encouraged By The Government
Tanzania has been the focus of Aminex’s oil and gas activities with a long-standing belief that the area has been under-explored for hydrocarbons and shows potential for oil generation and subsurface entrapment.
Its properties include the Kiliwani South (63.83% operated interest), Ruvuma PSA (25% non-operated interest), and Nyuni Area PSA (100% operated interest) exploration licenses which are located primarily in Tanzania.
The company has a partnership with ARA Petroleum, which is providing it with the technical and financial capacity to realise the full potential of the Ruvuma PSA, including the ongoing appraisal and development of the Ntorya gas discovery situated within the licence area.
The last year or so has seen Aminex achieve a number of potentially beneficial ‘milestones’ including the processing of 3D seismic data from the largest onshore seismic campaign in East Africa covering 338km² around Ntorya.
Aminex has a 25% non-operated interest and is carried up to a maximum $140m gross capex ($35m net), which should cover all net capex through to the commencement of commercial gas production from the Ntorya gas field.
Recent Financing
The company’s largest shareholder, Eclipse Investments, with 27.39% of the equity, has agreed a funding facility for $3m, ensuring Aminex has sufficient working capital available after 2024 and until the commencement of revenues from Ntorya gas sales.
Eclipse Investments llc
Through innovative asset management Eclipse Investments, which has delivered superior returns over the years. has controlling interests and partnerships in leading companies that are involved across the Energy, Chemical Manufacturing, Electrical Equipment Manufacturing & Product Integration, and Fast-Moving Consumer Goods sectors.
The investment vehicle, which is owned 100% by the highly respected The Zubair Corporation from Oman, concentrates on assets beyond Oman and now holds investments in entities operating in the UAE, UK, Norway, Saudi Arabia, Turkey, Tanzania, and India.
Broker’s View
David Mirzai at WH Ireland recently commented that the previously reported pipeline delays have shifted the timeline to first gas, the Tanzanian Government clearly attaches great importance to the role the Ntorya gas project will play in improving domestic energy security.
He noted that Aminex’s share price surged last month after the Tanzanian Energy Minister reportedly told journalists that a development licence would shortly be issued for the Rovuma PSA partners, upon receipt of which he would expect the operator to contract a rig to undertake the drilling of the CH-1 appraisal well.
Aminex has a 25% non-operated interest and is carried up to a maximum $140m gross capex ($35m net), which should cover all net capex through to the commencement of commercial gas production from the Ntorya gas field.
Analyst Dragan Trajkov at Shard Capital reckons that recent announcements have further strengthened his investment thesis and despite some recent market recognition, he expects that in the next 12 months the group’s shares will continue to move towards his company’s ‘fair value’ range, especially if progress from the field continues to support first gas in mid-2025.
Shard Capital’s ‘fair value’ is 2.0p to 2.5p, looking for up to 60% price growth in due course from the current 1.55p.
My View
Between now and the company’s London AGM on Thursday 27th June there could well be a continuation of the recent price climb but do expect some occasional corrections along the way offering cheaper buying opportunities.