Aminex Relinquishes Selous License in Tanzania

Aminex has relinquished the Selous onshore license in Tanzania license as being too speculative to justify investment of shareholders' funds but retains and is concentrating on the Nyuni and Ruvuma licenses. A Production Sharing Agreement on the Nyuni license calls for two wells to be drilled in the next twelve months.

The Nyuni license adjoins the trillion cubic feet Songo Songo gas field, which is part of the internationally financed Songas project to bring gas via a 230 kilometer pipeline to Dar es Salaam, to which the Nyuni license has rights of access.

In December 2002, Aminex announced the signing of a heads of agreement with Petromar, a wholly-owned subsidiary of Petrom SA the state oil company of Romania, to drill two wells in the Nyuni license using Petromar's jackup rig, Atlas. The cost of the two well program was estimated to be $15 million. Detailed work by Petrom and Aminex has since shown that while the Atlas rig is suited to such a program, the mobilization of this rig to East Africa is much more complicated and expensive than first calculated. As a consequence, the program has been significantly redesigned to use a Romanian F200 land rig, drilling the Nyuni and Okuza wells from two small islands in the Nyuni licence area. The total estimated cost of these two wells to reach the same geological targets is now budgeted to be significantly less than the original $15 million estimated.

Recently, Petrom signed a farm-in agreement for a 30% stake in the Nyuni license, however, Petrom is not yet able to execute a joint operating agreement for Nyuni pending completion of its ongoing privatization process. Aminex has decided that it will not wait until this privatization is completed and will proceed anyway to initiate the planned drilling program using the F200 land rig at the significantly reduced cost in order to fulfill the license terms on a timely basis. It is anticipated that a definitive contract for use of the rig will be signed in the next twenty one days and that the rig will be in place and ready for work early in the third quarter of this year. The F200 rig contract will provide a more effective and economic solution than the original project.

Aminex has been working in Tanzania for just over a year. The company is breaking new ground in many ways in this very remote location which is far from oil industry infrastructure. Planning and logistics are complex but are being undertaken thoroughly with a view to minimizing setbacks.

Careful field work by Aminex has resulted in the discovery of numerous, naturally-occurring and previously undocumented surface oil seeps in the region, including on Nyuni Island itself, directly above the first prospect to be drilled. Correlation of seep samples and geochemical analysis of these samples in the U.K. has for the first time provided direct evidence of the region's potential for oil as well as gas.