Aminex,ARA Petroleum farm-out deal conclusion pushed back to next July

22Mar 2019
The Guardian Reporter
The Guardian
Aminex,ARA Petroleum farm-out deal conclusion pushed back to next July

A farm-out agreement between Aminex Plc and ARA Petroleum Tanzania Limited for Ruvuma license Chikumbi-1 Well has been pushed back to next July as the companies continue to engage with government for approval.

Map depicting Ruvuma production sharing agreement area. File photo

In a statement this week, Aminex Plc’s CEO, Jay Bhattacherjee said the two companies have agreed that the previously announced Ruvuma farm-out agreement be given an extension to the longstop date of 31 July 2019.

"Aminex and APT have had positive meetings with the Tanzania government regarding the Ruvuma farm-out and look forward to the continued support of the authorities in closing out these remaining conditions and, in so doing, facilitating the progression of the Ntorya Development and specifically the drilling of the Chikumbi-1 well," Bhattacherjee said in a statement.

Aminex and ARA Petroleum Tanzania Limited have made good progress on closing out the conditions precedent, including all joint venture partner approvals, and are actively engaged with the government to close out the remaining conditions.

The principal conditions still to be met are the extension of the Mtwara Licence and approval by the government of the transfer of the interest and operatorship. The London Stock Exchange listed company further stated that together with APT, they continue to work closely with the authorities to close out the conditions as soon as possible.

Last year, Aminex and ARA Petroleum Tanzania which is an affiliate of Eclipse Investments, the largest shareholder in Zubair Corporation will take over operatorship of the Ruvuma PSA after Ndovu Resources signed a binding farm-out agreement with the Zubair Corporation.

According to Aminex which wholly-owns subsidiary Ndovu Resources following the farm-out, it is intended that the move will accelerate the development of the Ntorya project, including carrying Aminex through to a minimum gross production rate of 40 million standard cubic feet per day of gas and be self-funded through a full field development project.

Among other things, ARA Petroleum will drill, complete, and test Chikumbi-1 (formally Ntorya-3) as soon as reasonably practicable; acquire, process and interpret 3D seismic over a minimum of 200 square kilometres within the Ntorya area and establish an early production system to achieve accelerated first gas to a minimum gross rate of 40 MMcf/d.

 The company was also expected to pay Aminex $5 million cash in two tranches, $3 million payable on closing and the remaining $2 million 180 days later and fully carry Aminex for its share of costs up to $35 million in respect of its remaining 25 percent interest.