Aminex shares skyrocket on Tanzania farm-out agreement

Aminex saw its shares rocket over 40% on Wednesday after confirming that it has signed a binding farm-out agreement with its largest shareholder, The Zubair Corporation.

The London-listed upstream oil and gas company said Zubair intends to assign its interest in the farm-out to an affiliate of Eclipse Investments LLC, which owns 29.9% of Aminex. Eclipse is a vehicle of Oman's ARA Petroleum, which is itself part of Zubair.

The deal will see subsidiary ARA Petroleum Tanzania become operator in exchange for a 50% working interest in the Ruvuma production sharing agreement, which is located in southern Tanzania and includes the Ntorya project.

ARA will pay Aminex $5m cash in two tranches, with $3m payable on closing and the remaining amount 180 days later.

ARA will also acquire, process and interpret 3D seismic over a minimum of 200km squared within the Ntorya area, and establish an early production system to achieve accelerated first gas to a minimum gross rate of 40m cubic feet per day.

The farm-out agreement is intended to accelerate the development of the Ntorya project, carrying Aminex to the aforementioned minimum gross production rate and being self-funded through a full field development project.

Jay Bhattacherjee, chief executive of Aminex, said: "Aminex continues to develop its Kiliwani and Nyuni assets and is undertaking a review of other opportunities which will deliver robust shareholder returns."

Both projects are also in Tanzania, with Kiliwani representing first production for the Aminex in the country after commencing in April 2016, while Nyuni is a two well offshore site on which the company operates with a 93.3% working interest through Ndovu Resources.

Sultan Al-Ghaithi, a non-executive director on Aminex's board and chief executive of ARA, said: "Today's announcement emphasises our firm belief in the Aminex portfolio and in Tanzania, where the Zubair Corporation group of companies has existing business interests and enjoys strong relationships and an excellent reputation."

As of 1154 BST, Aminex’s shares were up 42.70% at 3.18p.