Aminex plc has reached a binding agreement to sell up to a 13% interest in the Kiliwani North Development Licence (KNDL) in Tanzania, to Solo Oil plc, for a total consideration of US$ 7 million.
Solo will initially acquire a 6.5% interest in KNDL from Aminex's subsidiary Ndovu Resources Limited (Ndovu) for a total consideration of US$ 3.5 million and will have a further 45-day option to purchase an additional 6.5% interest in the KNDL for US$ 3.5 million. Aminex will use the net proceeds to reduce significantly the outstanding debt and strengthen its balance sheet.
The KNDL contains the Kiliwani North 1 (KN1) well which the partnership expects to produce at approximately 20 million ft3/d in early 2015. Once producing this will represent a major milestone for Aminex through providing first revenues from Tanzania. Independently verified resources at Kiliwani North are estimated to be 45 billion ft3 of gas in place. Construction of a 2 km pipeline from KN1 to the new Songo Songo processing plant, at no cost to the company, has now commenced and is expected to be completed in early 2015.
Advanced negotiations for a gas sales agreement are expected to be satisfactorily concluded in the near future and the Board of Aminex notes that the Tanzanian authorities have recently finalised a similar agreement with another operator in the region. At 30 June 2014, the gross value of Aminex's share in the KNDL was US$ 13.4 million, of which up to 20% (or US$ 2.7 million) will be sold. Prior to first production from the KN1 well, there are no profits or losses attributable to the asset.
Aminex and Solo are already partners in the Ruvuma Production Sharing contract in Tanzania, with respectively 75% and 25% interests, where gas was discovered in 2012 at Ntorya-1. Ndovu is the operator of both the Ruvuma Production Sharing Agreement and the KNDL.
Aminex CEO Jay Bhattacherjee commented: "This disposal of a minority interest in Kiliwani North to Solo, which expands on the existing close partnership between Solo and Aminex in the Ruvuma basin, is an important step towards the Company's objective of paying down all outstanding corporate debt. Once this objective has been achieved, Aminex will be in a strong position to expand its operations in Tanzania and elsewhere."
Adapted from press release by Katie Woodward
Read the article online at: https://www.oilfieldtechnology.com/exploration/14102014/aminex-sells-interest-in-tanzanian-licence-267/