Aminex Announces First Gas Production from Kiliwani North

Source: www.gulfoilandgas.com 4/6/2016, Location: Africa

Aminex PLC, the Africa-focused oil and gas production and development company, is pleased to announce first gas production from its Kiliwani North gas field in Tanzania. The Kiliwani North Development Licence is operated by a wholly-owned subsidiary of the Company with a 55.575% working interest (expected to reduce to 51.75% as a result of a partial disposal announced on 4 April 2016) and the field will provide the Company with its first significant African production revenues.

Highlights:

- Initial production commenced from the Kiliwani North-1 well (KN-1) on 4 April. KN-1 is tied into the regional pipeline infrastructure and will deliver gas to the new adjacent Songo Songo processing plant, ultimately serving the local power market.
- Production is expected to build up to an anticipated production rate of 25-30 mmcfd (approximately 4-5,000 barrels of oil equivalent per day gross) (Commercial Production Rate) over the next 90-100 days.
- All gas produced during the build-up to full production rates will be paid for under the terms of a recently signed Gas Sales Agreement signed with the sole buyer, Tanzania Petroleum Development Corporation (TPDC). Aminex will receive US$3.00 per mmbtu (approximately US$3.07 per mcf) with expected net cash revenues of US$10-15 million per annum.

Aminex will receive all revenue in United States Dollars and the contractual gas price of US$3.00 per mmbtu will be adjusted annually by applying an agreed United States Consumer Price Index. The gas price is not linked to any commodity price so importantly is unaffected by current commodity market conditions. The gas delivery point is to be at the outlet flange of the Kiliwani North wellhead and, by selling the gas at the wellhead, the joint venture partners will not be liable for pipeline transportation and processing fees.

Initial production rates will be carefully managed to allow for testing and commissioning of the gas processing plant and pipeline, while recording critical pressure and flow rate measurements to determine the optimal flow rate to maximize the life of the reservoir. Together with TPDC the Company plans to conduct a well test during the production build up to determine the optimal flow rate. It is this optimal flow rate that will become the Commercial Production Rate and the Company intends to flow gas at this rate for as long as possible prior to a natural decline in production.

KN-1 represents contingent resources (2C) of gross 28 billion cubic feet gross. With first production complete Aminex expects to book reserves for Kiliwani North later this year.

Aminex CEO, Jay Bhattacherjee, commented:

“This is a significant moment for Aminex, its shareholders and Tanzania, and is the culmination of a tremendous amount of hard work by all involved. First gas at Kiliwani North marks the transition of the Company from developer to producer in Africa and sets us on the path for growth as we begin to generate cash. The Company looks forward to its exciting appraisal and development programme in the Ruvuma Basin which will potentially add further revenues in due course.”

For more information about related Opportunities and Key Players visit East Africa Projects


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