Final Results

RNS Number : 1050Z

Aminex PLC

12 March 2012

 



PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2011

Aminex PLC  ("Aminex" or "the Group" or "the Company"), the oil and gas company listed on the London and Irish Stock Exchanges, today announces its preliminary results for the year ended 31 December 2011.

HIGHLIGHTS

·      Gross revenues up to $9.3 million (2010: $7.1 million) and net loss for period lower at $0.9 million (2010: $4.5 million)

·      Gas discovery at Ntorya-1 well in Ruvuma PSA in Tanzania extends play fairway from deep water to the onshore

·      Strategy review targets African acquisitions, divestiture of non-core assets, farm-downs and strategic investment to fund growth

·      Appointment of new Chief Executive

·      Investment from Asian group raises $3.1 million with potential to increase to a strategic stake for funding African growth

·      New Nyuni Area PSA signed October 2011 includes 30% deep water acreage

·      Working interest in Ruvuma PSA increased to 75%

·      Divestiture of Somerset field in Texas realises $700,000 and removes significant P&A liability

·      US production up 62% to 130,000 BOE per annum from increased production at Shoats Creek and Alta Loma

Aminex Chief Executive Stuard Detmer commented: "Aminex has entered 2012 with a growth strategy focused on building its portfolio in Africa, divesting non-core assets, balancing its exploration risks and securing new funding through strategic partnerships.  The recent gas discovery in the Ruvuma PSA in Tanzania highlights the potential of our assets in East Africa and the recent divestment of the Somerset field in Texas demonstrates our intent to shed non-core assets and focus on high-impact opportunities."

For further information please contact:

Aminex PLC                                                                        [phone]

Stuard Detmer - Chief Executive Officer

Max Williams - Chief Financial Officer

M: Communications                      

Patrick d'Ancona                                                              [phone] or [phone]

Chris McMahon                                                                [phone] or  [phone]

Website www.aminex-plc.com

CHAIRMAN'S LETTER

Dear Shareholder,

The reporting year has been an active one for your Company in terms of both securing funds for the business's growth and progressing it operationally, starting with an issue of new capital in the first quarter and followed by the spudding of a new well in the Nyuni licence, Tanzania during the second quarter.  Late in the year a further new well was spudded in the Ruvuma PSA, Tanzania which, since the end of the reporting period, has led to the first onshore gas discovery in the Ruvuma Basin.  Also during the year, recompletion of the Sunny Ernst-2 well in Texas increased oil and gas production, the Nyuni PSA in Tanzania was increased in size and renewed and a development licence granted for the Kiliwani North gas field.  At the very end of the year, we placed new shares for cash, within the Directors' existing authority and at a premium to the prevailing market price, with Asian investors, principally Dr. Chan Chai Ruayrungruang, a leading Chinese businessman.  We believe that this may lead in due course to a significant strategic relationship with important Chinese interests and we look forward enthusiastically to the challenges and opportunities that such a relationship will bring. 

In September your Board was pleased to appoint Stuard Detmer as Chief Executive of the Aminex group.  Mr. Detmer has a distinguished reputation in the oil industry, with a career which has spanned management roles in both major and independent oil companies.  Most recently he took over the management of Sibir Energy PLC in Russia after it had experienced financial difficulties and he subsequently turned its fortunes around, eventually selling it on to a major Russia energy company on favourable terms for investors.  New management will bring new ideas and give refreshed impetus to existing projects.  We warmly welcome Stuard Detmer as Chief Executive and he will of course be supported not only by your Board but by our very professional and experienced operating staff.

In December I announced my plans to retire from a full-time role in the Company after nearly 21 years at the helm.  At the beginning of this year I stepped down as Executive Chairman and an independent non-executive chairman will in due course be appointed.  Meanwhile I will be pleased to serve the Company as Chairman or in any other capacity for as long as required.   I would like to thank the many shareholders, colleagues and advisors who have supported Aminex over the past two decades, in a remarkable journey which has included Russia, the USA, the Far East and, today, East Africa.   It is this support which has made it possible and worthwhile.

Aminex expects to become involved in new projects and new areas in 2012 and beyond.  I am confident that we have selected the right team to take your Company forward to the next stage of its development.

Yours sincerely,

BRIAN HALL

Chairman

CHIEF EXECUTIVE'S REPORT

Dear Shareholder,

Since becoming Chief Executive of the Aminex Group in September 2011, I have had the opportunity to evaluate the Company's activities worldwide.  My report highlights the progress we have made and the opportunities ahead of us.

Tanzania

Shortly before year-end, Aminex, as operator of a consortium including Tullow Oil and Solo Oil, spudded the Ntorya-1 well onshore, leading to a gas discovery in the Company's Ruvuma Basin acreage in the extreme south-east of Tanzania close to the border with Mozambique.  After deepening the well beyond the original target depth of 2,000 metres, we encountered a 25-metre gross sand interval with a 3-metre net gas bearing pay zone and a 16.5-metre lower sandstone interval with further possible gas pay.  At the time of writing, a liner has been run to total depth and the well is being deepened another 250 metres to a further objective at 3,000 metres.  Following completion and testing of the well, Aminex plans a comprehensive seismic programme to establish the full potential of the discovered reservoir and guide future drilling plans.  Ntorya-1 is the first on-shore discovery in the Ruvuma Basin and extends the play fairway from deep-water in Mozambique and Tanzania where recent discoveries are reported to total over 50 TCF of gas.  

Earlier in the year on the Nyuni PSA in Tanzania, the Nyuni-2 well was drilled to a measured depth of 3,450 metres, but suspended due to operational problems.  The prospectivity of the Nyuni block was not affected by this setback, but a further seismic programme is planned prior to follow-up drilling.  Following suspension of Nyuni-2, the rig was moved in order to re-enter the Nyuni-1A well originally drilled in 2004 and an independent review of the results is being carried out.  The Nyuni PSA reached its full term during the year and in October a new PSA was signed with the Minister of Energy & Minerals, covering the existing acreage and four new adjoining blocks to the north.  The new Nyuni PSA, known as the Nyuni Area PSA, extends from onshore, through the transition zone shelf, and into deep water which comprises roughly 30% of the licence area.  The Company plans to implement an extensive seismic programme on the Nyuni block in 2012 and 2013, with priority given to transition zone and deep-water segments. 

The Kiliwani North discovery, which flowed gas at 40 MMcfd under full production test conditions, has now been carved out of the Nyuni PSA as a separate gas field and, in April, the Minister of Energy & Minerals formally granted a 25-year field development licence.  Line pipe to connect this field to existing infrastructure is being delivered from a mill in China.  Tanzania has a pressing need for additional supplies of natural gas, principally for power generation.  Nevertheless, current infrastructure is limited by capacity and this has so far delayed putting Kiliwani North on stream, despite severe power shortages in Dar es Salaam.  The Government of Tanzania has more than one option for increasing processing and pipeline capacity and we expect to see implementation of new infrastructure projects in the near future.  In the meantime, Aminex continues to press for an interim solution that will see Kiliwani North gas flowing as soon as possible.

United States

In April, the Sunny Ernst-2 well at Alta Loma, Galveston County, Texas was recompleted in the 'S' Sands and the resulting production increase has materially improved the Group's production performance.   Further drilling at Shoats Creek, Louisiana, has not yet started.  In early 2012 the Company successfully completed the disposal of the Somerset Field in south Texas for a total consideration of over $700,000, thus eliminating considerable future plugging and abandonment cost.  Somerset is a mature field and, due to high operating costs, its profitability was marginal, with no value attributed to its reserves.

North Korea

On the Korean Peninsula, in-house evaluation of the geological potential of the East Sea has continued but no exploration work has so far been carried out on location.

Egypt

At the West Esh el Mellaha-2 concession in Egypt, two further wells are due to be drilled but no firm plans have yet been made.  The Company is free-carried with a 10% interest in this concession through to first commercial production.

Funds Raised

During the first quarter of the reporting year, the Company issued new shares to fund its exploration and development activities, through a combination of an institutional placing and an open offer to existing shareholders.  Both were oversubscribed and consequently scaled back.  New funds raised were over $40 million before expenses and these enabled an active drilling programme to be launched in Tanzania. 

Shortly before year-end, new shares were issued for cash consideration to Dr. Chan Chai Ruayrungruang, a prominent Chinese businessman, and to Empire Asia Group.  These were placed at a premium to the market price and raised approximately $3 million after expenses.  Dr. Chan Chai and Empire Asia Group now jointly own 4.76% of the issued share capital of the Company and acquired it with the purpose of establishing a strategic relationship with the Company.  This is an exciting development and we warmly welcome our new investors.

STRATEGIC REVIEW

Beginning in November 2011 Aminex has conducted a thorough review of its current asset base, geographical focus, funding strategy and risk management in order to position the Company for a step-change in growth and value creation for shareholders.  The strategic recommendations resulting from that review are outlined below.

Focus on Africa

Today, the Company's Tanzanian interests, consisting of the Nyuni and Ruvuma PSAs together with the Kiliwani North gas field, form the core of its asset base, offering the greatest potential among its existing holdings for high impact on shareholder value, as emphasised by the recent Ntorya-1 gas discovery in the Ruvuma area.  However, Aminex recognises that these core assets, though important, are not by themselves sufficient to achieve its ambitions.  

Building on its position in Tanzania, Aminex plans to expand its presence in Africa and transform the Company into a primarily African-focused E&P company.  We will initially look to strengthen our position in East Africa where we believe that we can still find assets with a good risk/value profile.  Secondly, we plan to expand in areas outside the East African coastal margin, diversifying our portfolio across multiple countries and geographic plays, while concentrating on high-value phases of the development cycle. 

Focusing on Africa leverages the Company's proven capability for working in frontier areas and builds on the already strong asset base in Tanzania.  We believe that Africa offers the greatest array of high-impact opportunities to drive shareholder value for the Company.

Grow through Acquisition

The coming years are expected to be a period of increased M&A activity in the African E&P sector.  As smaller cash-constrained companies struggle to raise capital and larger players divest non-core assets, Aminex sees a unique opportunity to build a diverse African portfolio through acquisition and farm-ins that will support an aggressive drilling campaign in the years to come.

By leveraging our Full Listing, Aminex believes it can achieve superior market valuations for acquired assets, creating shareholder value for existing Aminex shareholders and those of target companies.

Finally, growing the portfolio in Africa will give our shareholders exposure to a greater range of assets, thus spreading risk across a more diverse asset base.

Rationalise the Portfolio

We plan to take an active approach to managing the Company's portfolio. 

The strategic decision to concentrate the Company's resources on Africa naturally implies movement away from assets in non-core geographies and to that end Aminex plans to divest its remaining North American assets.

The rationale for this step is three-fold.  Firstly, it will bring cash into the Company that can be re-deployed in our target African opportunities where investments should have greater impact and see higher returns for shareholders; and secondly, it redirects management time and attention towards growing the African portfolio.  Thirdly, the North American assets are mature and do not have the capability to add significant shareholder value.  These assets are worth more to regional North American companies with local expertise and resources to exploit them effectively.  

Aminex will also seek to reduce exposure to its exploration interests off the Korean peninsula by working with regional partners better able to shoulder the costs of the exploration programme and to manage the long-term political nature of this project.  

The Company's plan to build a larger, more diverse African asset base will give it greater flexibility in optimising its work commitments in the future through a continuous programme of farm-outs, sales of assets that have not performed to expectation and acquisition of new assets.  Looking ahead, active portfolio management will become a key competency for Aminex.

Manage Exploration Risk

In both new and existing projects, Aminex's target will be to hold working interests of 25% - 30%, so as to be able to manage exposure to work commitments on individual projects, invest across a larger portfolio and spread exploration risk.  As a first step, Aminex is seeking farm-in partners for its Nyuni and Ruvuma PSAs in Tanzania where it currently has 70% and 75% working interests respectively. 

To reduce exploration risk, the Company plans to invest more heavily than in the past in seismic evaluation, ensuring that leads are as far as possible adequately de-risked before drilling.  The Company believes that this is one of the most cost-effective ways to increase the value of its existing and future properties, making them more attractive to farm-in partners, potential acquirers and Aminex shareholders.  Starting in 2012, an 800 kilometre seismic programme is planned for the Nyuni PSA and a new seismic programme will be developed for the Ruvuma PSA, following the Company's recent gas discovery at Ntorya-1. 

Establish Strategic Partnerships to Fund Growth

Developing the African portfolio will require funding.  In the near term we plan to use existing resources and proceeds from the divestment of non-core assets to grow our portfolio and fund our work commitments.  

To make larger acquisitions possible, Aminex has been actively seeking partners who share its strategic vision and have the capability to help fund its growth plans.  

As noted above, in December 2011 Aminex held negotiations with Asian investors led by prominent Chinese businessman, Dr. Chan Chai, who is seeking to channel significant investment into oil and gas assets in Africa.  Our discussions led to an issue of approximately 5% of the Company's capital at a 45% premium to the market to Dr. Chan Chai and to Empire Asia Group as a first step towards a broader strategic relationship that would see these new investors take a larger stake in the Company. 

The current aversion to risk in the financial markets is at odds with the long-term demand for oil and gas in the developing world and this provides unique opportunities for those who can see beyond the turmoil.  We believe that partnering with investors who share our view will allow Aminex to establish a winning portfolio for the long term. 

The Road Ahead

Our strategic vision for the future is clear and executable.  Indeed, it is already being put into practice, as evidenced by the divestiture of the Somerset field in Texas, introduction of strategic Asian investors to the Company in December and the launch of an extensive seismic programme for the Nyuni PSA in 2012.  Much more remains to be done.

These are but the first steps on the road towards achieving our ambitions.   In the coming years, Aminex plans to grow the Company for the benefit of its investors, the communities where it operates and a world that has increasing energy demands.  We hope you will join us on our journey.

Yours sincerely,

Stuard Detmer

Chief Executive

FINANCIAL REVIEW

Financing and future operations

During the year, Aminex raised $42.2 million (net of expenses) through an institutional placing and an over-subscribed Open Offer to existing shareholders, completed in March 2011, and a dis-application placing to Asian investors in December 2011. In February 2011, Aminex entered into a farm-in agreement with Key Petroleum Ltd, and following the drilling of the Nyuni-2 well, increased its interest in the Nyuni PSA to 65%, including the Kiliwani North gas field.  Subsequently, under the terms of an asset swap agreement with Key Petroleum, Aminex relinquished its interest in the West Songo-Songo PSA in order to increase its interest in the new Nyuni Area PSA to 70%.  On the Ruvuma PSA, Aminex also entered into a farm-in agreement with Tullow Oil in September 2011, increasing the Group's interest to 56.25%.  Since the year-end, Tullow Oil has decided not to participate further in Ruvuma operations and has withdrawn from the PSA, enabling Aminex to increase its interest further to 75%.  Although the Group has increased its share of its principal Tanzanian assets, the relinquishment of the interest in West Songo-Songo and the delays experienced with the tie-in of the Kiliwani North-1 well and US drilling activity have ensured that the Group has adequate cash reserves to meet planned expenditure over the next twelve months.

2011 financial results

Total production in the US increased by 62% from 80,500 BOE to 130,250 BOE following the successful re-completion of the Sunny Ernst-2 well in the 'S' Sands and a full year's production from wells drilled at Shoats Creek in 2010.  Oil production increased year-on-year by 14% because of the re-completion at Alta Loma but partially offset by declining production at Somerset.  Field-by-field, the percentage of oil production was: Alta Loma 38%, Somerset 34%, Shoats Creek 27% and South Weslaco and other legacy interests 1%. Gas production increased by 107% through a combination of increased production at Alta Loma, Shoats Creek and South Weslaco. Field-by-field, the percentage of gas production was: Alta Loma 78%, South Weslaco 17%, Shoats Creek and other legacy interests 5%. The average oil price achieved on US operations was $93.84 per barrel, up 23% from $76.46 per barrel in 2010.  The average gas price achieved fell marginally from $4.74 per MCF in 2010 to $4.54 per MCF in 2011.  Historically, Aminex's average oil price has been depressed by the discount applied to the production from the Somerset field, categorised as South Texas Sour.  Aminex obtains premiums on gas production at Alta Loma and on both oil and gas production at Shoats Creek (with reference to West Texas Intermediate and Henry Hub pricing).

The increases in production and oil prices led to an overall increase of 32% in Group revenues.  Revenues from oil and gas operations increased by 46%.  Revenues arising from equipment sales by the AMOSSCO division and other services provided by the Group to third parties and to the Group's joint operations increased by 7%. 

Cost of sales increased to $5.6 million, up $0.4 million on the previous year.  This reflects the benefit of increased gas production from Alta Loma following the re-completion of the Sunny Ernst-2 in the 'S' Sands. The depletion and decommissioning charge has risen by 56% to $1.87 million as a result of increased production.   No impairment provision has been made in the year under review: a provision of $0.55 million was made in 2010 against the carrying value of the South Weslaco field in the US.

As a result, the Group's gross profit has improved from $0.16 million in 2010 to $1.87 million in 2011.

Group administrative expenses fell by 23% from $4.65 million to $3.59 million. The decrease of $1.06 million arose mainly as a result of a reduction in the share-based payment charge of $0.75 million, the 2010 charge being higher because of a grant of options in January 2010 and December 2010.  Underlying administrative charges remain in line with the previous year although sterling-based costs were greater due to a higher average US Dollar exchange rate for the year.  The effect was offset by an increase in the Group's charges to joint operations for technical and management services, including the Ruvuma joint operation where it assumed operatorship in October 2011 prior to drilling Ntorya-1.  Including depreciation charges against other fixed assets and a gain of $0.68 million on the disposal of the Somerset field in the US, the loss from operating activities for the year was $1.08 million compared to $4.57 million in 2010.

After net finance income of $0.19 million (2010: $0.07 million), the resulting loss before tax for the year ended 31 December 2011 was $0.9 million (2010: loss $4.49 million), with basic and diluted loss per share of 0.12 US cents (2010: 1.06 US cents).

Balance sheet

The Group's total non-current assets increased by $23.8 million from $58.0 million to $81.8 million. The movement represents a net increase in exploration and evaluation assets of $12.1 million, a net increase in property, plant and equipment of $11.8 million and a reduction in other investments of $0.03 million, following the disposal of an unlisted investment.

The increase in exploration and evaluation assets is net of the carrying cost of $11.1 million for the Kiliwani North Development Licence which was re-classified to property plant and equipment in April 2011.  The gross additions in the year therefore amounted to $23.2 million.  Expenditure on the Nyuni licence amounted to $20.6 million, including the Group's share of drilling the Nyuni-2 well and side-track, the re-entry of the Nyuni-1A well and subsequent plugging and general licence costs.  A further $2.6 million was expended on the Ruvuma PSA for general licence costs and the preliminary costs of the Ntorya-1 well spudded on 22 December.  

The net increase of $11.8 million in property, plant and equipment includes the re-classification of the carrying cost of $11.1 million in the Kiliwani North field to producing and development assets following the grant of the Development Licence by the Tanzanian authorities in April 2011.  A further $1.3 million was spent on the licence following re-classification from exploration and evaluation assets, relating to long-lead items and the continuing costs associated with connecting to the Songas gas plant.   In the US, additions amounted to $1.55 million, which mainly comprises the cost of the drilling and completion for Olympia Minerals-1 and Olympia Minerals 10-1 and related production facilities at the Shoats Creek field. The disposal of the Somerset field released a net amount of $0.75 million from the carrying value of the production assets, while an increase in the decommissioning provision on the remaining US assets increased the cost base by $0.48 million.  The deduction of depletion charges of $1.87 million and depreciation of $0.04 million resulted in the carrying value of property, plant and equipment, including development assets, amounting to $29.8 million at the end of the year.

As with each reporting period, the Directors have performed an extensive review of the Group's portfolio of assets to determine whether any of the assets have been impaired. The Directors consider the carrying value of each production sharing agreement separately.  Since publication of the 2010 Annual Report, the Group has successfully negotiated a replacement Nyuni Area PSA to replace the Nyuni/East Songo-Songo PSA and is committed to further exploration on the licence.  Because the result of Nyuni-2 well was inconclusive and drilling was suspended due to wellbore conditions, the Nyuni Prospect has been neither proved nor disproved.  The Directors have decided to acquire further seismic over the island as part of planned transition zone seismic and have concluded that there are no indicators of impairment.  On the Ruvuma PSA, the Directors consider that the gas discovery at Ntorya-1 indicates that no impairment provision is required.  For the Group's producing assets, the Directors have compared the carrying value of each cash-generating field in the US, with updated independent reserves reports prepared as at 1 January 2012.  No impairment provision has been considered necessary.  For the Group's Tanzanian producing assets, management has compared the carrying value with the estimated net recoverable value.  Based on the results of this assessment, the Directors are satisfied that there is no evidence of impairment.

The Group's current assets at 31 December 2011 amounted to $25.2 million (2010: $5.0 million), comprising cash balances of $21.1 million (2010: $2.9 million) and trade and other receivables of $4.1 million (2010: $1.7 million).  Assets available for sale of $0.4 million held at 31 December 2010 were sold during the year. Current liabilities increased to $7.4 million compared to $4.4 million in the prior year.  Trade and other payables included amounts due to suppliers for Nyuni drilling operations and early Ntorya-1 drilling costs which have been settled since the year-end. Non-current liabilities have decreased by $0.3 million due mainly to the reduction in the decommissioning provision following the disposal of the Somerset field.

Cash movements

The Company raised $42.2 million (net of expenses) during the year, of which $39.2 million was from the institutional placing and Open Offer to existing shareholders in the first quarter of the year and a further $3.0 million was from Asian investors under a dis-application placing in December.  Net cash used in operating activities was $0.4 million (2010: $0.4 million).  The Group invested $4.7 million in property, plant and equipment during the year, comprising $3.6 million on US operations and $1.1 million on Kiliwani North which is now classified as a development asset.  The Group invested $19.8 million on exploration and evaluation assets during the year, mainly on the drilling of the Nyuni-2 well and the side-track and the re-entry of Nyuni-1 and subsequent plugging operation.  Also included are the general licence costs for Nyuni and Ruvuma.  The Group received $0.4 million on the disposal of the Somerset field and related assets (with the balance of the sales proceeds received in 2012), and $0.4 million on the disposal of shares in listed and unlisted investments.  Interest received amounted to $0.1 million and debt finance decreased by a net amount of $0.02 million.  As a result of operations, financing and investing activity, cash and cash equivalents increased by $18.2 million to $21.1 million at the year-end.

OPERATIONS REVIEW

TANZANIA

Ruvuma PSA

Following the drilling of the Likonde-1 well in 2010 in which over 800 feet of reservoir quality sands with gas and oil shows were encountered, a programme of seismic reprocessing and remapping was carried out resulting in the identification of several up dip pinch-out plays at the level of the Basal Tertiary and Upper Cretaceous sands seen in the Likonde-1 well.  One of the pinch-out plays mapped by Aminex was selected for drilling as the Ntorya-1 well.

The Ntorya-1 well was spudded on 22 December 2011 with a planned total depth of 2,026 metres.  The target reservoir sands expected at 1,800 to 1,900 metres were not encountered and drilling was continued to 2,500 metres before electric logs and a check shot survey were run to establish a tie to the seismic.  On the basis of the logging data, Aminex proposed to deepen the well by a further 250 metres to a deeper horizon seen on the seismic.  Tullow elected not to participate in the deepening of the well.  A 25 metre gross sand interval with strong gas shows was subsequently drilled from 2,660 to 2,685 metres and an electric logging programme carried out at 2,750 metres.  The logs showed an upper sand with 3 metres of net gas pay and a 16.5 metre lower sand with possible gas pay.  At the time of writing, a 7 inch liner was being set before drilling a further 250 metres to evaluate a deeper seismic event above 3,000 metres.  After logging the well at final total depth, Ntorya-1 will be suspended for testing at a later date.

With the encouragement from the Ntorya-1 gas discovery, a programme of seismic acquisition is planned in 2012 to delineate the Ntorya find as well as infill seismic across previously defined leads. 

In October 2011, operatorship of the Ruvuma PSA was transferred from Tullow to Aminex which also involved a pro-rata transfer of equity from Tullow to both Aminex and Solo, resulting in Aminex having 56.25% as operator.  This left Tullow with 25% and increased Solo's interest to 18.75%.  After participating in the Ntorya-1 well to a depth of 2,500 metres, Tullow withdrew from the Ruvuma PSA and Aminex and Solo have committed to the first extension period of the PSA with interests of 75% and 25% respectively.   In accordance with the requirements of the Ruvuma PSA, 50% of the PSA area was relinquished at the end of the first exploration period.  The relinquished area covers shallow basement in the western half of the PSA.

Nyuni Area PSA

During 2011 the Tanzanian Government approved an application by Aminex's subsidiary Ndovu Resources Limited for a new PSA covering the same area plus four graticular blocks to the north.  This new PSA replaced the Nyuni/East Songo Songo PSA (reported separately below) which completed its full 11-year term, having satisfied all commitments under the licence. 

The Nyuni Area PSA was signed with the Ministry of Energy & Minerals in Dar es Salaam on 27 October 2011, for an 11-year term, expiring in 2022.  The licence area now extends from the coastline near the Rufiji Delta, across the shallow water reef platform into the deep water on the east side of the licence.  An extensive seismic programme is planned in the first year of the licence, with 335 kilometres of transition zone seismic profiles to be acquired using ocean bottom cable in the shallow water platform area and a 2D marine seismic programme in the deepwater area to the east.  This is the first time that the deepwater portion of the Nyuni Licence will have been evaluated with seismic. 

In September 2011, Aminex announced that it had reached an agreement with Key Petroleum Ltd. ('Key') whereby Key relinquished its 5% interest in the Nyuni Area PSA and Aminex withdrew from the West Songo-Songo PSA.  Aminex therefore has a 70% interest in the new PSA.

Nyuni/East Songo Songo PSA

The Nyuni-2 exploration well was spudded in mid-June 2011 on the Nyuni Prospect, a large seismically-defined fault closure with a Lower Cretaceous (Neocomian) primary reservoir target.  Nyuni-2 was drilled as a directional well from Nyuni Island to a bottom-hole target 1,200 metres to the southeast of the island.  The well reached a final total measured depth of 3,450 metres (true vertical depth of 3,112 metres).  Thin sands of Neocomian age and younger Cretaceous age were intersected, with some minor indications of gas, but the main Neocomian sands were not reached.  Efforts to obtain a full suite of electric logs to target depth were hampered by obstructions in the wellbore and a decision was made to sidetrack the hole around the obstructions.  Further difficulties with obstructions in the sidetrack hole resulted in the loss of the bit and mud motor and the decision was taken to suspend the well for possible future re-entry.  The structural high at Nyuni remains a prime exploration target, but improvements in seismic data quality are required before any further drilling can be considered.

Following the suspension of the Nyuni-2 well, the Caroil-6 rig was skidded across to Nyuni-1A and the well was re-entered.  After drilling out cement plugs, wireline logs and pressure tests were recorded across the Lower Cretaceous Albian/Aptian sands.  At the time of drilling Nyuni-1A in 2004, gas shows were recorded across this interval and subsequent electric logging indicated a gas reservoir.  An independent evaluation of the results of the re-entry programme was being carried out at the time of report preparation and the results will be reported once they are available.

At the conclusion of the drilling operations on Nyuni, the rig was demobilised and the Nyuni/East Songo Songo PSA reached the end of its term.  

Kiliwani North Development Licence

The Development Licence for Kiliwani North Field was signed by the Minister for Energy & Minerals with an effective date of 1 April 2011, for a 25 year term.  The licence covers one block comprising an area of 81 km².  Since the award of the licence, Aminex has completed the engineering design of the Kiliwani North-1 (KN-1) tie-in to the Songas Processing Plant and the order for the 6" line pipe to connect KN-1 to the processing plant is being completed at a mill in China.  The tie-in is designed for a daily throughput of up to 20 MMcfd.  Subject to finalising commercial terms for a Gas Sales Agreement and a Tie-In Agreement, tenders are ready to be issued for the construction of the pipeline connection, hook-up and commissioning. 

Capacity restrictions on the existing processing and pipeline infrastructure have hampered efforts to secure access for Kiliwani North gas, so until one of two possible schemes proposed for expanding the processing and transportation capacity have been approved by the Government of Tanzania, Aminex is continuing to pursue an interim solution to obtain a short term tie-in to the existing facilities. 

USA

Shoats Creek Field, Louisiana

The Shoats Creek leases cover approximately 2,100 acres in south-western Louisiana.  Principal oil and gas bearing horizons are the Frio sands at a depth of 5,000 to 6,000 feet, multiple zones in the Cockfield sands at 8,500 to 9,500 feet and the Upper and Lower Wilcox sands below 10,000 feet.  Shoats Creek is a mature field, but found new life with the acquisition of 3D seismic which enabled the Wilcox sands to be explored.  However, the OM10-1 well drilled in 2010 in the Upper Wilcox sands and the OM-1 well targeting the Cockfield sands have produced inconsistently.   In 2011 permission was granted by the State of Louisiana to convert a depleted production well to water disposal and, when this project is on stream coupled with the intended perforation of the lowest two of the five zones originally tested, the production profile should improve.  Two further Wilcox wells proposed by the operator, El Paso E&P, in the Wilcox Unit for 2011 have not yet been drilled and the timing of future drilling is still under evaluation.  In the meantime, Aminex has also identified five further locations for development.

Alta Loma Field, Texas

Following the planned recompletion of the Sunny Ernst-2 ('SE-2') well, a new producing zone known as the 'S' sands was brought onstream in April 2011.  This significantly increased production which had been declining from the Upper Andrau sands originally completed in 2008.  The already depleted Sunny Ernst-1 ('SE-1') well is being evaluated for conversion to salt water disposal and this will boost production while reducing operating costs. Future development will be based on 3D seismic, which has identified possible new well locations.  Sunny Ernst-3 has been proposed, but not yet drilled.  El Paso, field operator, recently disposed of its 25% interest in Alta Loma, which has been acquired by a company within the Hunt Oil group. Aminex has a 37.5% working interest in Alta Loma and another partner, Activa Resources, has recently taken over operatorship from El Paso.

South Weslaco, Texas

South Weslaco is a mature gas field and, given the weak market for gas, Aminex does not plan to participate in any further drilling on the property, but will continue to receive its share of production from its existing wells.  Aminex has a 25% interest in this property, which is operated by Kaler Energy.

Somerset Field, Texas

In early 2012 the Company's US subsidiary, Aminex USA, Inc, completed agreements signed in late 2011 to sell leases and other assets comprising the Somerset Field for a total consideration of approximately $700,000.  Somerset contributed gross production, but high per barrel operating costs and the low sales price of Somerset oil made it only marginally profitable.  The sale of the Somerset properties will relieve the Aminex Group of future abandonment costs without affecting the profitability of US operations.  Reserves values will not be affected as recent independent reports attributed no reserves to the field.

EGYPT

Gulf of Suez - West Esh el Mellaha-2 PSC ("WEEM-2")

Two further exploration wells are due to be drilled at WEEM-2 in 2012 prior to expiry of the second exploration period and Aminex has a 10% interest in the PSC with a free carry through to first production under any development lease awarded. 

The block is located along the south-western onshore margins of the oil-prone Gulf of Suez Basin.  Drilling under the current PSC has proven the presence of a working petroleum system but commercial flow rates have not been established.  One well, South Malak-1, was abandoned after it tested limited volumes of oil from two reservoir horizons, but failed to find the main target.

WEEM-2 is close to major oil and gas producing fields and there is good local infrastructure, which would enable any discovery to be commercialised rapidly.

KOREAN PENINSULA

Through a 50% shareholding in Korex Ltd, Aminex participates in exploration of an offshore area of over 55,000 km² in the Korean East Sea of the Democratic People's Republic of Korea.  Aminex believes that the large area covered by the Korex PSC is prospective in both deep and shallow water.  Politics on the Korean peninsula are undergoing change and are difficult to predict. To date, Korex's work has been at the evaluation stage, but Korex is likely to commence seismic evaluations on site in the first half of 2012.  Korex plans to create partnerships with larger, better-resourced oil and gas companies to provide financial resources and reduce risk.

Oilfield Supply and Logistics

AMOSSCO (Aminex Oilfield Services & Supply Company, a wholly-owned subsidiary) provides specialised logistics services to the oil industry from a base in London and sources oilfield equipment and consumables to international oil companies. Typically AMOSSCO procures goods and materials on behalf of its customers from suppliers in many different countries and then consolidates them into packages to meet the needs and delivery times of the customer. During 2011, AMOSSCO provided considerable support to the Group's operations in Tanzania, in particular the sourcing of materials, equipment and services for the drilling of Nyuni-2 and Ntorya-1.

Group Income Statement

for the year ended 31 December 2011

	Notes	2011 US$'000	2011 US$'000	2010 US$'000	2010 US$'000
Revenue	2		9,329		7,081
Cost of sales		(5,592)		(5,174)
Depletion, depreciation and decommissioning of oil and gas interests		(1,866)		(1,194)
Impairment provision against producing assets		-		(550)
			(7,458)		(6,918)
Gross profit			1,871		163
Administrative expenses		(3,593)		(4,652)
Depreciation of other assets		(38)		(79)
			(3,631)		(4,731)
Loss from operating activities before other items			(1,760)		(4,568)
Gain on disposal of property plant and equipment	3		677		-
Loss from operating activities			(1,083)		(4,568)
Gain on disposal of exploration asset			-		238
Finance income	4		431		3
Finance costs	5		(243)		(168)
Loss before tax			(895)		(4,495)
Income tax expense			-		-
Loss for the financial year attributable to equity holders of the Company	2		(895)		(4,495)
Basic and diluted loss per Ordinary Share (in US cents)	6		(0.12)		(1.06)

Group Statement of Comprehensive Income

for the year ended 31 December 2011

			2011 US$'000		2010 US$'000
Loss for the financial year			(895)		(4,495)
Other comprehensive income:
Currency translation differences			(155)		(40)
Net change in fair value of available for sale financial asset			49		(22)
Net change in fair value of available for sale financial asset reclassified to profit or loss			(27)		-
Total comprehensive income for the financial year attributable to the equity holders of the Company			(1,028)		(4,557)

Group Balance Sheet

 at 31 December 2011

	Notes		2011  US$'000		2010  US$'000
ASSETS
Exploration and evaluation assets	7		51,478		39,404
Property, plant and equipment	8		29,823		18,048
Other investments			500		532
Total non-current assets			81,801		57,984
Available for sale financial asset			-		356
Trade and other receivables			4,112		1,715
Cash and cash equivalents			21,106		2,905
Total current assets			25,218		4,976
Total assets			107,019		62,960
LIABILITIES Current liabilities
Loans and borrowings			(17)		(53)
Trade and other payables			(7,232)		(4,128)
Decommissioning provision	9		(160)		(206)
Total current liabilities			(7,409)		(4,387)
Non-current liabilities
Loans and borrowings			(58)		(44)
Decommissioning provision	9		(1,803)		(2,116)
Total non-current liabilities			(1,861)		(2,160)
Total liabilities			(9,270)		(6,547)
NET ASSETS			97,749		56,413
EQUITY
Issued capital	10		65,629		35,611
Share premium	10		79,431		67,228
Capital conversion reserve fund			234		234
Share option reserve			3,763		3,620
Fair value reserve			-		(22)
Foreign currency translation reserve			(814)		(659)
Retained earnings			(50,494)		(49,599)
TOTAL EQUITY			97,749		56,413

Group Statement of Changes in Equity

for  the year ended 31 December 2011

		Attributable to equity holders of the Company
	Share capital	Share premium	Capital conversion reserve fund	Share option reserve	Share warrant reserve	Foreign currency translation reserve	Fair value reserve	Retained earnings	Total equity
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
At 1 January 2010	32,399	60,463	234	2,729	5,665	(619)	-	(45,104)	55,767
Transactions with shareholders recognised directly in equity
Shares issued	3,212	1,100	-	-	-	-	-	-	4,312
Share based payment charge	-	-	-	891	-	-	-	-	891
Release on exercise of share warrants	-	5,665	-	-	(5,665)	-	-	-	-
Comprehensive income:
Currency translation differences	-	-	-	-	-	(40)	-	-	(40)
Net change in fair value of available for sale financial asset	-	-	-	-	-	-	(22)	-	(22)
Loss for the financial year	-	-	-	-	-	-	-	(4,495)	(4,495)
At 1 January 2011	35,611	67,228	234	3,620	-	(659)	(22)	(49,599)	56,413
Transactions with shareholders recognised directly in equity
Shares issued	30,018	12,203	-	-	-	-	-	-	42,221
Share based payment charge	-	-	-	143	-	-	-	-	143
Comprehensive income:
Currency translation differences	-	-	-	-	-	(155)	-	-	(155)
Net change in fair value of available for sale financial asset	-	-	-	-	-	-	22	-	22
Loss for the financial year	-	-	-	-	-	-	-	(895)	(895)
At  31 December 2011	65,629	79,431	234	3,763	-	(814)	-	(50,494)	97,749

Group Statement of Cashflows

for the year ended 31 December 2011

	2011 US$'000		2010 US$'000
Operating activities
Loss for the financial year	(895)		(4,495)
Depletion, depreciation and decommissioning	1,904		1,273
Impairment provision against producing assets	-		550
Foreign exchange (gains)/losses	(155)		(41)
Finance income	(113)		(3)
Finance costs	212		168
Gain on disposal of exploration and evaluation assets	-		(238)
Loss on disposal of non quoted financial instrument	31		-
Net change in fair value of available for sale financial asset reclassified from equity	(27)		-
Gain  on disposal of property, plant and equipment	(677)		-
Equity-settled share-based payment charge	143		891
Provision against doubtful debts	312		-
(Increase)/decrease in trade and other receivables	(2,382)		913
Increase  in trade and other payables	1,648		721
Net cash absorbed by operations	1		(261)
Cost of decommissioning	(384)		(135)
Interest paid	(5)		(11)
Net cash outflows from operating activities	(388)		(407)
Investing activities
Acquisition of property, plant and equipment	(4,657)		(5,789)
Expenditure on exploration and evaluation assets	(19,833)		(6,955)
Proceeds from sale of assets available for sale	405		90
Proceeds from sale of property, plant and equipment	371		-
Acquisition of non quoted financial investment	(200)		-
Proceeds from sale of non quoted financial instrument	201		-
Interest received	103		3
Net cash outflows from investing activities	(23,610)		(12,651)
Financing activities
Proceeds from the issue of share capital	44,993		4,647
Payment of transaction costs on the issue of share capital	(2,772)		(335)
Loans repaid	(79)		(70)
Loans received	57		32
Net cash inflows from financing activities	42,199		4,274
Net increase/(decrease)  in cash and cash equivalents	18,201		(8,784)
Cash and cash equivalents at 1 January	2,905		11,689
Cash and cash equivalents at 31 December	21,106		2,905

Notes to the Financial Information
for the year ended 31 December 2011

1              Statement of accounting policies

The financial information has been prepared in accordance with International Financial Reporting Standards as adopted by the EU (EU IFRSs).

Basis of preparation

At the date of issue of this announcement the Group's statutory financial statements for the year ended 31 December 2011, and therefore the result showing in this announcement, are unaudited. In the opinion of the Directors, the announcement includes all adjustments necessary for a fair presentation of the results for the periods presented.

The accounting policies used are consistent with those set out in the audited Annual Report for the year ended 31 December 2010, which is available on the Company's website, www.aminex-plc.com, except as noted below.

i)       New account standards and interpretations adopted

Below is a list of standards and interpretations that were required to be applied in the year ended 31 December 2011. There was no material impact to the financial statements in the current year from these standards set out below:

·       Amendments to IAS 32: Financial Instruments Presentation - Classification of Rights Issues

·       IFRIC 19: Extinguishing Financial Liabilities with equity instruments

·       Improvements to IFRSs 2010 various standards

·       IAS 24: Related Party Disclosures (revised 2009)

ii)    New standards and interpretations not adopted

Standards that are not yet required to be applied but can be early adopted are set out below. None of these standards have been applied in the current period. There would not have been a material impact to the financial statements if these standards had been applied in the current accounting period. These will be applied as required on a prospective basis.

·       IFRS 9: Financial instruments

·       IFRS 10: Consolidated financial statements

·       IFRS 11: Joint arrangements

·       IFRS 12: Disclosure of interests in other entities

·       IFRIC 13: Fair value measurement

·       IAS 19: Employee benefits (amended 2011)

·       IAS 27: Separate financial statements

·       IAS 28: Investments in associates and joint ventures

2              Operating segments

The Group considers that its operating segments consist of (i) Producing Oil and Gas Properties, (ii) Exploration Activities and (iii) Oilfield Services and Supplies.  These segments represent are those that are reviewed regularly by the Chief Executive Officer (Chief Operating Decision Maker) to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. However it further analyses these by region for information purposes.  Segment results include items directly attributable to the segment as well as those that can be allocated on a reasonable basis.  Unallocated items comprise mainly head office expenses, cash balances and certain other items. 

Segmental revenue - continuing operations

	Producing oil and gas properties				Provision of oilfield Services and supplies				Total
	2011 US$'000		2010 US$'000		2011 US$'000		2010 US$'000		2011 US$'000		2010 US$'000
Country of destination
America	6,511		4,456		675		1,366		7,186		5,822
Africa	-		-		1,630		858		1,630		858
Asia	-		-		-		141		-		141
Europe	-		-		513		260		513		260
Revenue	6,511		4,456		2,818		2,625		9,329		7,081

The exploration activities in Africa and Asia do not give rise to any revenue at present.

	2011 US$'000		2010 US$'000
Segment profit/(loss) for the financial year
US - producing assets	1,113		(984)
Africa and Asia - exploration assets	(282)		(997)
Europe - oilfield services and supplies assets	(148)		(37)
Europe - group costs (*)	(1,578)		(2,477)
Total group loss for the financial year	(895)		(4,495)
Segment assets
US - producing assets	18,602		19,448
Africa and Asia - exploration assets	66,003		40,544
Europe - oilfield services and supplies assets	602		631
Europe - group assets (**)	21,812		2,337
Total assets	107,019		62,960
* Group costs primarily comprise mainly salary and related costs.
** Group assets primarily comprise cash and working capital.
Segment liabilities
US - producing assets	(2,586)		(4,809)
Africa and Asia - exploration assets	(5,801)		(1,170)
Europe - oilfield services and supplies	(636)		(164)
Europe - group activities	(247)		(404)
Total liabilities	(9,270)		(6,547)
Capital expenditure
US - producing assets	1,551		7,463
Africa and Asia - exploration assets	23,195		6,156
Africa and Asia - producing  assets	1,270		-
Europe - group assets	8		18
Total capital expenditure	26,024		13,637
Other non-cash items:
US: depletion and decommissioning charge	1,866		1,194
US: impairment charge against producing assets	-		550
Europe: depreciation - Group assets	38		79
Europe: impairment charge against other investments held	-		374
Europe: fair value adjustment against available for sale financial asset	-		22
Europe: net change in fair value of available for sale financial asset reclassified from equity	(22)		-

3              Gain on disposal of property plant and equipment

During the year, the Group entered into two agreements to dispose of its interest in the Somerset field in the USA and other field-related assets.  The gain on disposal amounted to US$677,000, which was made up as follows: 

				2011 US$'000
Net book value of field assets				(746)
Release of decommissioning provision (note 9)				657
Other assets and liabilities				4
				(85)
Sale proceeds				762
Gain on disposal of property plant and equipment				677

4              Finance income

		2011 US$'000		2010 US$'000
Net change in fair value of available for sale financial asset reclassified from equity		27		-
Foreign exchange gains		291		-
Deposit interest income		113		3
		431		3

5              Finance costs    

		2011 US$'000		2010 US$'000
Other finance costs - decommissioning provision interest charge		207		151
Loss on disposal of non-quoted financial investment		31		-
Bank charges		-		1
Other finance charges		5		16
		243		168

6              Loss per Ordinary Share

The basic loss per Ordinary Share is calculated using a numerator of the loss for the financial year and a denominator of the weighted average number of Ordinary Shares in issue for the financial year.  The diluted loss per Ordinary Share is calculated using a numerator of the loss for the financial year and a denominator of the weighted average number of Ordinary Shares outstanding and adjusting for the effect of all potentially dilutive shares, including share options, assuming that they had been converted.

The calculations for the basic loss per Ordinary Share for the years ended 31 December 2011 and 2010 are as follows:

		2011		2010
Loss for the financial year (US$'000)		(895)		(4,495)
Weighted average number of Ordinary Shares ('000)		728,145		425,738
Basic and diluted loss per Ordinary Share (US cents)		(0.12)		(1.06)

There is no difference between the basic loss per Ordinary Share and the diluted loss per Ordinary Share for the years ended 31 December 2011 and 2010 as all potentially dilutive Ordinary Shares outstanding are anti-dilutive.  There were 50,215,000 (2010: 27,715,000) anti-dilutive share options in issue as at 31 December 2011.

7              Exploration and evaluation assets

		Tanzania US$'000
Cost
At 1 January 2011		44,132
Additions		22,793
Employment costs capitalised		402
Reclassification as developed  and producing assets (Note 8)		(11,121)
At 31 December 2011		56,206
Provisions for impairment
At 1 January and  31 December 2011		4,728
Net book value
At 31 December 2011		51,478
At 31 December 2010		39,404

The Directors have considered the licence, exploration and appraisal costs incurred in respect of its exploration and evaluation assets, which are, with the exception of the partial write down on the Nyuni-1 well in Tanzania, carried at historical cost.  These assets have been assessed for impairment and in particular with regard to remaining licence terms, likelihood of renewal, likelihood of further expenditures and ongoing acquired data for each area, as more fully described in the Operations Report.  The Directors are satisfied that there are no further indicators of impairment but recognise that future realisation of these oil and gas assets is dependent on further successful exploration and appraisal activities and the subsequent economic production of hydrocarbon reserves.

8              Property, plant and equipment

	Development Property Tanzania US$'000	Developed and producing oil and gas properties - USA US$'000	Other assets US$'000		Total US$'000
Cost
At 1 January 2011	-	25,919	423		26,342
Reclassification from exploration and evaluation assets (Note 7)	11,121	-	-		11,121
Additions in the year	1,270	1,551	8		2,829
Increase in decommissioning provision	-	475	-		475
Released by disposal	-	(4,269)	-		(4,269)
Exchange rate adjustment	-	-	5		5
At 31 December 2011	12,391	23,676	436		36,503
Depreciation and impairment
At 1 January 2011	-	7,916	378		8,294
Charge for the year	-	1,866	38		1,904
Released by disposal	-	(3,523)	-		(3,523)
Exchange rate adjustment	-	-	5		5
At 31 December 2011	-	6,259	421		6,680
Net book value
At 31 December 2011	12,391	17,417	15		29,823
At 31 December 2010	-	18,003	45		18,048

Property, plant and equipment shown above includes assets held under finance leases as follows:

		2011 US$'000		2010 US$'000
Net carrying value		75		97
Depreciation charge		19		31

The majority of the Group's property, plant and equipment comprises its producing oil and gas properties which are depleted on a unit of production basis, based on proven and probable reserves at each field.  At 31 December 2011, an independent valuation was carried out based on estimated future discounted cash flows of each producing property at the Shoats Creek, South Weslaco and Alta Loma fields, as set out in more detail in the Operations Review. The Directors are satisfied that no further impairment to the property, plant and equipment is considered to have occurred.  During the year the Group disposed of its 100% interest in the Somerset field; further details in respect of the disposal are set out in Note 3.  Following the award of the Kiliwani North Development Licence by the Tanzanian government in April 2011, the Directors are satisfied that the Kiliwani North field is commercially viable.  As a result, in line with Group policy, the carrying cost relating to the development licence was reclassified from exploration and evaluation assets as a development asset under property, plant and equipment. Depletion will be charged once the field commences commercial production.

9              Decommissioning provision

				2011 US$'000
At January 2011				2,322
Increase in decommissioning provision on property plant and equipment (see Note 8)				475
Release from decommissioning provision on disposal of property plant and equipment (see Note 3)				(657)
Discount unwound in the year (see Note 5)				207
Payments made in the year				(384)
At 31 December 2011				1,963
		2011 US$'000		2010 US$'000
Current		160		206
Non-current		1,803		2,116
Total decommissioning provision		1,963		2,322

10           Share capital

On 25 February 2011, the Group issued 250 million Ordinary Shares of €0.06 each for cash increasing share capital by US$20.6 million. The premium arising on the issue, after share issue costs, amounted to US$8.9 million. On 14 March 2011, the Group issued 75.77 million Ordinary Shares of €0.06 each for cash increasing share capital by US$6.3million.  The premium arising on the issue, after share issue costs, amounted to US$3.3 million.  The Placing and Open Offer funds were raised primarily to enable the Group to meet planned capital expenditure commitments in Tanzania and the US.  On 22 December 2011, the Company issued 39 million Ordinary Shares of €0.06 each for cash increasing issued capital by US$3.1 million.  The placing was under a Share Subscription Agreement to facilitate Group exploration and development and to supplement working capital.

11           Going concern

The Directors have given careful consideration to the Group's ability to continue as a going concern.  The Directors have concluded that, following the placings and Open Offer in 2011 which raised approximately $42 million net of transaction costs, the Group has sufficient ongoing operating cash flows to continue as a going concern.  The Group's ability to continue to make planned capital expenditure, in particular in its areas of interest in Africa and the USA, can be assisted if necessary by the successful sale of assets, deferral of planned expenditure or an alternative method of raising capital.  The Directors have a reasonable expectation that the Group will be able to implement this strategy.

We understand that, as in prior years, the auditors will likely make reference to this in their report.  We understand that their opinion will not be qualified in this respect. 

12           Post balance sheet events

In February 2012, Aminex announced a gas discovery at the Ntorya-1 well in the Ruvuma PSA.

13           2011 Annual Report and financial statements

The 2011 Annual Report and financial statements will be posted to shareholders shortly.

14           Statutory information

The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 December 2011 within the meaning of the Companies (Amendment) Act, 1986.  The statutory accounts will be finalised on the basis of the financial information presented by the Directors in the preliminary announcement and together with the Independent Auditor's report thereon will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

15           Estimates, key risks and uncertainties

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.  Key estimates and judgments related to the preparation of these financial statements relate to notes 7 (Exploration and evaluation assets), 8 (Property, plant and equipment), 9 (Decommissioning provision), and 12 (Going concern) and these were the same as those applied in the most recent published financial statements for the Group.  Principal risks and uncertainties affecting the Group relate to exploration and production risk, commodity and currency prices and other political risks particular to the countries in which we operate, as more fully described in the operations report, and in our most recent published financial statements.

16           Board approval

The Board of Directors approved the preliminary financial statements for the year ended 31 December 2011 on 9 March 2012. 

Glossary of terms used
PSA or PSC:	Production Sharing Agreement or Contract
MCF:	Thousands of cubic feet of natural gas
TCF:	Trillions of cubic feet of natural gas
BOE:	Barrels of oil equivalent per day
MMcfd	Millions of cubic feet per day of natural gas

 

END

 

 

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