Aminex has received a confirmation from the Tanzanian Ministry of Energy and Minerals that the Minister has no objection to the proposed sale of up to a 13% interest in the Kiliwani North Development Licence (KNDL) to Solo Oil for a total consideration of $7 million.
The sale now remains subject only to a formal Deed of Assignment being completed and signed by all participating parties.
Aminex and Solo will now proceed with the assignment of the initial 6.5% interest in KNDL for $3.5 million. The parties have agreed to extend the deadline on the option to purchase an additional 6.5% on the same terms to January 30, 2015 as a result of the longer than expected time taken to obtain the no objection notification.
The KNDL contains the Kiliwani North field which is expected to start production at approximately 20 mmcfd in early 2015. Once the Deed of Assignment is complete, and if Solo elects to take up its full 13% entitlement, the KNDL joint venture partners will be Ndovu Resources Ltd. (Aminex) 52% (operator), RAK Gas 25%, Bounty Oil 10% and Solo 13%.
Aminex says that once producing, KNDL will represent a major milestone for the company by providing it first revenues from its Tanzanian assets. Independently verified resources at KNDL are estimated to be 45 billion cubic feet of gas in place. Construction of a 2 km pipeline from the KN1 wellhead to the new Songo Songo processing plant is expected to be completed by the end of this month.
Furthermore, the company reports that a Gas Sales Agreement for KNDL is expected to be completed prior to the commissioning of the 2 km pipeline and the Songo Songo processing plant in early 2015.
Aminex and Solo are already partners in the Ruvuma Production Sharing Agreement in Tanzania, with respectively 75% and 25% interests, where gas was discovered in 2012 at Ntorya-1. Ndovu is the operator of both the Ruvuma Production Sharing Agreement and the KNDL.
Aminex CEO, Jay Bhattacherjee, commented: “We are pleased to announce this process to sell part of the KNDL to Solo is now approaching conclusion with only the formal Deed of Assignment left to be executed. As previously stated, Aminex intends to use the sale proceeds to reduce outstanding corporate debt thereby strengthen its balance sheet.”
Neil Ritson, Solo Oil’s Chairman, commented: “The final step in the process of receiving approvals to our acquisition of an interest in the soon to be producing Kilwani North development has now been received and we look forward to signature of the gas sales agreement and to the start-up of the production in 2015.”