The Farmout Agreement provides for EAX to earn into part of Aminex's Nyuni license, offshore Tanzania by acquiring new "transition zone" 2D seismic over Area "B" of the license. Area "A" of the Nyuni license in Tanzania was partly farmed out to East Coast Energy last year. Splitting the license remains subject to approval by the Government of Tanzania.
EAX may further increase its interest by arranging the acquisition of 3D seismic over the same area, if appropriate, after review of the first stage program. 330 kilometers of new conventional 2D marine seismic was acquired over this area by Aminex in 2005 and the additional transition zone seismic to be acquired by EAX will add significant value to the existing data. Transition zone seismic involves special equipment to conduct seismic surveys in extremely shallow marine environments not accessible to a conventional seismic vessel. This is particularly important at Nyuni where the majority of the potential drilling locations underlie shoals, limestone reefs and small islands, many of which are partly submerged at high tide.
EAX will acquire 2D transition zone data to a value of $2 million to earn an interest of 15% in Area "B" of the Nyuni license. Subject to a review of the 2D transition zone dataset, EAX will have the option to finance the acquisition of prospect-specific 3D transition zone seismic to a value of $4 million, to earn an additional 30% interest in Area "B". In the event that the Government of Tanzania does not approve the split of the Nyuni license into Areas "A" and "B", EAX will earn 10% of the entire license area by shooting 2D transition zone seismic rather than 15% of the smaller "B" area. Similarly, by shooting 3D transition zone seismic EAX will earn a further 20% interest in the entire license area rather than 30% of the smaller "B" area.
The transition zone seismic and, if necessary, 3D seismic will be acquired during the second and third quarters of 2006 with the aim of firming up drilling targets for exploration wells. The seismic crew will use state-of-the art Sercel 428 TZ equipment and a custom-designed fleet of handling vessels.
The Government of Tanzania has formally consented to the introduction of EAX as a farm-in partner to the Nyuni license.
On March 14, 2006, Aminex announced that it had entered into a seismic option agreement with Upstream Petroleum Services Ltd. ("UPSL") over blocks L9 and L10 offshore Kenya. Aminex confirms that under UPSL's Technical Evaluation Agreement 570 kms of new 2D seismic have now been acquired over the area and geochemical seabed coring and additional seismic on prospective leads will be acquired in the next 2 months. The area covered by this agreement is around 5,000 square kilometers, involving the land and near shore acreage of original Kenyan Blocks L9 and L10. The remainder of Block L9 is licensed to other groups and the deepwater portion of L10 is currently open.
Commenting on the further Nyuni farm-out, Aminex Chief Executive Brian Hall said:
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