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Thursday, July 12, 2018
Aminex’s wholly-owned subsidiary, Ndovu Resources Limited, has signed a binding farm-out agreement with The Zubair Corporation LLC. Zubair plans to assign its interest in the farm-out to ARA Petroleum Tanzania Ltd (a company under formation) (APT), which will be an affiliate of Eclipse Investments LLC (Eclipse), the company’s largest shareholder.
Subject to the detailed terms set out in the farm-out agreement, it is intended that the farm-out will accelerate the development of the Ntorya project, carry Aminex through to a minimum gross production rate of 40 MMcf/d and be self-funded through a full field development project.
In exchange for a 50% working interest in the Ruvuma PSA, APT will become operator and will conduct the following minimum work program. The partners will drill, complete, and test Chikumbi-1 (formally Ntorya-3) as soon as reasonably practicable. In addition, under the deal 3D seismic will be acquired, processed and interpreted over a minimum of 200 sq km within the Ntorya area, which is understood to be the first time 3D seismic has been acquired onshore Tanzania. APT will also lead the way in establishing an EPS to achieve accelerated first gas to a minimum gross rate of 40 Mmcf/d.
APT will pay Aminex a cash consideration of $5 million in two tranches, $3 million payable on closing and the remaining 180 days later. It will also fully carry Aminex for its share of costs up to $35 million in respect of its remaining 25% interest (post-transaction), which implies a potential expenditure during the carry period of up to $105 million for the aggregate 75% working interest held by APT and Aminex.
In the event that the minimum production target of 40 Mmcf/d is achieved prior to Aminex’s 25% interest having been carried for the full $35 million, APT will assign one quarter of its share of profit gas to pay the unspent carry amount until the full $35 million is realized by Aminex.
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