Aminex operates in Tanzania through its 100 per cent owned subsidiary Ndovu Resources Limited and has several other assets such as Kiliwani North, the Ruvuma PSA and Nyuni Area PSA.
The London Stock Exchange listed company told investors on Monday that the drilling will get underway mid this month. According to it, an independent inspection of the contracted drill rig has now been completed and the project is scheduled to start in mid-December.
“Ntorya-2 is to be located some 1.5 kilometres from the original Ntorya discovery well, which was at the fringes of the reservoir. The well is designed to test the reservoir up-dip where the feature is believed to be thicker,” the firm said in a statement.
Sectoral experts say that appraisal drilling is carried out once oil or gas has been discovered in order to assess the extent of the field, the reserves, the possible rate of production, and the properties of the oil or gas in it.
Aminex moved and began working on the drilling rig at the Ntorya-2 appraisal well in September this year. The Caroil 2 drilling rig was expected to spud the much anticipated well before the end of last month.
Caroil is a French driller and its contract with Aminex is for one firm well with an option for a second well. Aminex has a 75 per cent working interest and is the operator of the well, which is positioned approximately 1500m southwest of the Ntorya-1 discovery well, which flow tested at 20 MMscf/d with 139Barrels associated condensate in April 2012.
The appraisal, coming four and half years after the discovery, a period in which Tullow Oil exited the asset, is indicative of the challenges of resource volume, the company said.
“But Ntorya is significant for one thing: it has successfully extended onshore the Ruvuma Basin fairway which has been proven in deepwater Tanzania and Mozambique as containing over 130 trillion cubic feet (tcf) of gas.”
Partner Solo Oil Plc, which has a 25 per cent stake in the asset, said it has been excited by the development noting that if successful, the drilling can unlock the discovery's potentially significant value.
“Solo is especially excited that the spud of the Ntorya appraisal well is now imminent since this well has significant upside potential for Solo's asset holdings in Tanzania,” chairman Neil Ritson noted on the company’s website.
“The receipt of regular gas payments from TPDC is also encouraging and will support the investments being made in Tanzania."
Aminex meanwhile continues to produce gas from the Kiliwani North project, where it says revenues from gas sales are now established. It confirmed that the gas is being sold at US$3 per million British thermal units.
Gas is sold from the wellhead, meaning Aminex doesn’t have to pay for transportation, and the company highlighted that it is a fixed contract which is not linked to changing market prices. According to it, cash proceeds from production is being used to pay down corporate debts.Aminex has 54.575 per cent stake in Kiliwani North.