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Sunday, November 22, 2015
Aminex plc reached an agreement with Bowleven plc that will strengthen its balance sheet and accelerate its work program in Tanzania. The company and its partner Solo Oil farmed out a stake of its Tanzanian assets to Bowleven.
The terms of the Bowleven agreement include the disposal by Aminex of a 25% interest in the Kiliwani North Development License (KNDL) and farming into the Ruvuma PSA, including the Ntorya appraisal program, for a 50% gross interest. Under an inter-conditional agreement with its existing JV partner Solo Oil plc the farm out terms for the Ruvuma PSA will be shared proportionately by Aminex and Solo.
The agreement has Aminex acquiring shares in Bowleven for the farm out of an interest in Tanzania, which gives Aminex shareholders an exposure to Bowleven’s drilling and development program for 2016 in Cameroon.
Also under the Solo Agreement, Solo will receive a 25% share of the net carry of $10 million and will be entitled to 25% of the contingent bonuses. The net effective value to Aminex of the transaction will be $24.375 million.
The combined transaction is conditional upon, amongst other things, the execution of formal agreements with Bowleven and Solo, and Aminex shareholder approval. The Bowleven agreement will have an effective date of January 1, 2016. Both the sale of an interest in the KNDL and the farm-out transaction for interests in the Ruvuma PSA are subject to approval from the Tanzanian authorities and, where applicable, to partner pre-emption rights which must be exercised within 30 days, in absence of which they will lapse.
The completion of the proposed transactions with Bowleven and Solo will enable Aminex to reduce its outstanding corporate debt substantially, delivering on its 2015 stated objective. Aminex will remain the operator of all its assets in Tanzania following close of the transaction and is in discussions with Solo and Bowleven to accelerate the work program at Ruvuma. The company will announce an updated work program once concluded.
Following the completion of the combined transactions and with cash expected to be generated from KNDL soon, the Board considers the Company to be well placed to identify other production and development opportunities in line with Aminex’s longer-term strategy.
On completion of the transactions, Aminex will retain an operated 30.575% interest in KNDL and an operated 37.5% interest in the Ruvuma PSA. Shareholders are reminded that Solo retains its option to purchase a further 6.5% stake in KNDL (before TPDC back-in) on the terms previously advised to shareholders.
Aminex Chief Executive Jay Bhattacherjee commented “Today’s disposal and farm out is a landmark transaction for the Company and I am delighted to welcome Bowleven as a joint venture partner. Bowleven has built an enviable position in Cameroon and has a strong technical team who share the same ideology as us and we feel will strengthen the prospects of development.”
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