Energy firm Aminex (LSE:AEX) sat at 2p this morning after announcing that it has begun remediation work on a key well based on its 58pc-owned and operated Kiliwani North asset in Tanzania. After reporting that pressure at the Kiliwani North-1 well had built up sufficiently last week, the company said today that it plans to repair a faulty valve in the current quarter, which is expected to allow gas to flow from the well.
Pending approvals, the business then plans to perforate a lower untested and potentially gas-bearing section of the reservoir system in Q4, with the aim of bringing the well back into full-time production. Production from Kiliwani North commenced in April 2016, representing first production for Aminex in Tanzania. It produced around 3.6bcf of gas from the site in 2017.
Today’s news was also welcomed by Solo Oil (LSE:SOLO), which owns a 7.6pc stake in Kiliwani North. The firm saw its share’s drop 1.7pc in morning trading.
Elsewhere in today’s update, Aminex said it has identified areas on its Kiliwani North and Nyuni Area concessions where it will acquire up to 275km2 of 3D seismic to de-risk prospects and leads. It hopes this data gathering across the two assets – which is planned to occur at the same time– will find undrained areas in the Kiliwani North structure and high-grade the Kiliwani South prospect to drill-ready status.
Kiliwani South is estimated to have 57 BCF mean un-risked GIIP, as reviewed by RPS Energy as part of its Competent Persons Report. The Kiliwani North development licence has existing gas terms, a 25-year development licence to 2036, and any further drilling success could be produced and monetised through the national pipeline, according to Aminex.
Jay Bhattacherjee, chief executive of Aminex, said: ‘The company believes that, given the significant production surrounding Songo Songo Island and the geological properties identified in Kiliwani North, there remain significant opportunities to pursue additional development of the Kiliwani North Development Licence as the commercial terms are already in place.’
Today’s update follows the news last week that Aminex had received numerous bids for a rig to drill a new well called Chikumbi-1 (CH-1) within its 75pc-owned Ruvuma production sharing agreement (PSA) in Tanzania. CH-1 is located up dip from Aminex’s Ntorya project, which is part of the Ruvuma PSA and contains 1.87TCF of gas initially in place. Ntorya currently consists of the Ntorya-1 discovery well, which tested at rates of up to 20MMcf/d with 139bbls of condensate and the Ntorya-2 well, which tested at a stabilised rate of c.17MMcf/d.
Aminex said it expects CH-1 to delineate the Ntorya gas field in a significantly thicker section of the Cretaceous reservoir system. It also plans to evaluate a more in-depth exploration target in the Jurassic formation. If CH-1 is successful, then its gas will be produced into the existing Madimba Gas Processing Plant, and ultimately integrated into a full-field development programme.
Author: Daniel Flynn
The author does not own shares in the company mentioned in this article