FARMOUT OF NYUNI INTEREST
Key, an Australian company based in Perth, has agreed to farm into Nyuni for a 20% working interest. In order to earn its 20% interest Key will:
--contribute 30% towards the costs of two exploration wells on Nyuni, the first of which is due to be spudded in the second quarter of this year and the second of which will be drilled later in the year; --issue 2 million new, fully-paid shares in Key to Aminex or such number of shares which will be valued at the time of its forthcoming admission to the Full List of the Australian Stock Exchange at A$600,000, whichever number of shares is the greater; and --contribute 10% of all license costs arising in addition to drilling with effect from 1 November 2006 to the date of this agreement, estimated to be $2.5 million, which will include the current seismic program.
--If the combined cost of the two proposed wells at Nyuni should exceed US$15.4 million, then Key will only be obliged to pay 20% of the excess cost over this amount. --The Agreement is conditional upon (1) admission of shares in Key to listing on the Australian Stock Exchange, anticipated in the near future, and (2) formal approval from the authorities in Tanzania.
Key was formed in 2006 by Mr. Ted Ellyard and Mr. Ken Russell. Mr. Ellyard, Chairman, is best known for his work at Hardman where, during his time as its Managing Director, the company grew to be a highly successful explorer in Mauritania and elsewhere. Mr. Russell, Chief Executive, has worked in the international oil and gas industry for over thirty years and has held management positions in a number of companies.
PROGRESS ON EAST AFRICA ACTIVITIES
Aminex has a full program of exploration activity in East Africa planned for 2007 and beyond.
Nyuni, Tanzania: Two new exploration wells are planned at Nyuni in 2007 and rig discussions are well-advanced. Subject to final agreement, the first well is likely to be spudded towards the end of the second quarter. Aminex and its partners have now acquired extensive new seismic data over shallow reefs and islands, employing innovative methods not previously used in the East Africa region, and are close to finalising the location for the first Nyuni well in the current program. Shareholders will be advised when a drilling contract has been finalized. Existing partners in Nyuni are Aminex 84%, Bounty Oil 6% and East Africa Exploration Ltd. 10%. Discussions with Pan-African Tanzania Ltd., a subsidiary of East Coast Energy Ltd., to participate in Nyuni are continuing.
Ruvuma, Tanzania: The Ruvuma Production Sharing Agreement ("PSA") consists of two adjacent licenses, Lindi and Mtwara, together covering over 12,000 sq kms, of which about 20% is offshore. The PSA was signed in October 2005 with a commitment to drill two wells in an initial four year period and to shoot 500 kms of new seismic. The first phase of this seismic has now been shot. In early 2006 Ndovu farmed out 50% of the PSA to Hardman Resources Ltd. ("Hardman"), which earns its share through acquiring further seismic, not yet completed. In late 2006 Hardman's shareholders accepted an offer for their company from Tullow Oil PLC ("Tullow"). This transaction has recently been finalized and Aminex welcomes Tullow as its partner in Ruvuma going forward. A further seismic contract is likely to be signed shortly and the additional seismic required is planned for the second quarter of this year. Timing of first drilling at Ruvuma has not yet been finally determined pending completion of seismic. Aminex operates this PSA.
Manja, onshore Madagascar: The Manja PSA (Block 3108) covers 10,750 sq kms in the south of Madagascar adjacent to the west coast. The PSA was signed in late 2005 and the 2006 work program, consisting of gravity and aeromagnetic surveys, surface evaluation and reprocessing of 2,000 kms of existing seismic data acquired by previous license holders, has now been accomplished and the first year work program signed off by the Madagascar authorities. In addition, evaluation of old wells, one of which flowed 2.7 million cubic of gas per day under test in 1958, has been undertaken. The 2007 program consists of 500 kms of new seismic acquisition. Preliminary reconnaissance surveys for this program have now been completed, an environmental impact assessment is in progress and negotiations ongoing with seismic contractors. The objective of the survey will be to define a drillable prospect with a view to first drilling in 2008. The Manja PSA is held by Amicoh Resources Ltd., a company owned 50-50 by Aminex and Mocoh Ltd., a downstream oil company. Aminex operates this PSA.
Blocks L17 & L18, near shore Kenya: An Aminex subsidiary participates in a Technical Evaluation Agreement ("TEA") in Kenya with a 25% interest. Blocks L17 and L18 were formerly part of larger blocks L9 and L10 and have recently been redesignated. Together they cover 5,000 sq kms, partly onshore and partly offshore, close to the port city of Mombassa. Partners in the TEA are Upstream Petroleum Services Ltd. and SomKen Ltd. The group acquired over 700 kms of new 2D marine seismic in 2006 and at the same time carried out seabed core sampling. Negotiations for conversion of the TEA to a full PSA have been ongoing for some time but the partners are confident that a PSA will be successfully concluded in the near future. Aminex jointly operates this TEA.
Commenting on the above activities, Aminex Chief Executive Brian Hall said:
"The agreement with Key provides valuable support for our important 2007 drilling program at Nyuni and a partner with a very experienced team for our operations. We welcome Key's participation and the vote of confidence it provides.
"Since Aminex's PSA's were signed in 2005 both the Ruvuma Basin (spanning Tanzania and Mozambique) and Madagascar have become areas of intense industry interest and we believe our strategy of acquiring good acreage at an early stage in the frontier area of the East African margin has been vindicated by subsequent events."
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