Aminex say that it is proposing to increase its interest in the Nyuni Production Sharing Agreement in Tanzania (Nyuni PSA) from 50% to 65% through a farm-in arrangement. Binding heads of agreement have been signed.

Under the terms of the farm-in, Aminex will fund a 20% share in the dry hole cost of the forthcoming Nyuni-2 exploration well in Tanzania in return for assignment to the Company of a 15% interest. The farm-out party is Key Petroleum Ltd. ('Key') which is refocusing its activities to onshore United Kingdom production and onshore North Perth Basin exploration in Australia. Once the farm-out conditions have been met, Key will become a 5% partner and responsible for 5% of ongoing costs, including any testing and completion costs of the Nyuni-2 well. The additional 15% being acquired by Aminex includes 15% of the tested Kiliwani North gas discovery and of the logged but not tested gas discovery in Albian-Aptian sands in the Nyuni-1 well, drilled in 2004.

Nyuni-2 is due to be spudded in April and a rig contract is in the final stages of negotiations. Nyuni-2 will be drilled from Nyuni Island at an angle of approximately 30 degrees from vertical to target a large gas prospect in Neocomian age (Lower Cretaceous) sandstones. A commercial discovery could be tied back via a 20 kilometre subsea pipeline to Songo-Songo and would be relatively quicker and less expensive to develop than, for instance, a discovery in deep water.

Aminex chairman Brian Hall commented: 'A further acquisition of interest in the Nyuni PSA is a logical expansion of our activities and confirms our strong commitment not only to the Nyuni PSA itself but to Tanzania and the East African margin generally, now a focus of high oil industry interest. We are pleased to have been able to come to a mutually satisfactory arrangement with Key, which meets the strategic objectives of both companies'.

Partners in the Nyuni PSA after the farm-out terms have been fulfilled will be:

Ndovu Resources (Aminex subsidiary): 65% (operator) RAK Gas Commission: 25% Key Petroleum Ltd: 5% Bounty Oil: 5%

The agreement is subject to formal consent of the Government of Tanzania.

Tags: Aminex PLC