This thread provides a home for analyst comments and discussion thereof.
My own view has ways been that if and when there's a sizeable discovery or two @ Ruvuma then Tullow would take them out - as they did with Hardman Resources in Uganda (from whom Tullow inherited the Ruvuma licence.)
Hey Jim
Lets wait until we get the AEX IMS, which, IIRc is due next week.
Hopefully the Tanz Govt has found its collective pen and signed off on the new PSA because Id really like to know more about the extra blocks and as an outside chance coudl we have got the new equipment in at SE allowing them to open up the choke??
Anyway, if we dont get news in the IMS, Id bet that we will have it by the AGM.
D
Right, I've only just gone and bought some AEX - first time in almost a year. I was offered a million shares, but politely declined.
I think the market has overlooked the recent positive news and we have'nt seen a rally into the drilling later this month.
With the downside looking well protected I think it is a good risk:reward bet from current levels.
This is only a small holding for me, but a run to the teens will be a decent profit.
Let's see how this works out. They only need one decent strike & I expect the share price to re-rate.
Every dog has it's day, SER had her's yesterday. Maybe it is Aminex turn next?
Very good Isaac welcome back and now that marben 100 is also back on board and jonny t has increased his holding by three fold i think perhaps now the train is ready to leave the station of single figures for the land of the teens.
Well blackgold the game changer for me was on May 5th when Aminex said the following :
"The recompletion of Sunny Ernst-2 will provide a substantial boost to production with immediate revenue benefits and at a low capital cost when compared to new drilling.
http://www.investegate.co.uk/Article.aspx?id=201105050700109743F
Last year Aminex generated $7m in revenue, with higher Oil and Gas prices this year and higher production if they can double the revenue and the two development wells in Shoats Creek to be drilled later this year which will boost production further plus the production from KN next year will boost cash flow for Aminex significantly. I don't think the market has fully understood this point yet but time will educate them imho.
This makes Aminex a more attractive investment because it has gone from a company that went to shareholders with the begging bowl asking for cash into a company that is slowly turning into a self-funding one drilling high impact wells - the appraisal well in Nyuni-2 is relatively low risk but for Aminex has huge upside potential.
Couple that with the fact that they have just raised $40mn to fund their drilling for the next two years, makes Aminex a very good risk:reward Investment.
In effect your buying a business covered by the US assets with the rest i.e. East Africa & Cash thrown in for free.
Encore was cheap for a long long time in 2009 with the market cap = cash. The company was suffering from bad sentiment at the time due to the Storage asset not quite living up to expectations. Then they found Oil in Catcher / Cladhan and the price rocketed 1000%.
Aminex has been a company where for the last few years have disappointed investors with constant dilution and little signs of returning value to shareholders. And is now suffering from negative sentiment despite having a recent good run of news.
But experience tells me sentiment is very fragile & all they need is one decent discovery & sentiment can change quite quickly. The Nyuni-2 is an appraisal well and as such is low risk but high impact and I think their luck could change on this well & even if it is not succesful they will still be producing a lot of cashflow.
I think Aminex is a much better Investment now then it has ever been in the last 5 years, imho.
DYOR.
constant dilution
This is a frequent complaint on bulletin boards that IMO is pretty unjustified by the facts....so I thought I might remind people of the actual details. Going back to mid 2005 (before most of us bought shares) there has been a total of £63 mn or so raised in new equity. This was primarily in four blocks:
a) Placing & Open Offer at 8.7p in June 2005, raised £6.6mn
b) Rights issue at 20p in May 2007 raised £14.6mn
c) Placing & Open Offer at 6p in August 2009 raised £10.2mn
d) Placing & Open Offer at 8p in February 2011 raised £26mn
Other disapplication placings (all pre-authorised by shareholders) raised c £6mn at various prices between 7p and 30p.
Without doubt, the one that caused most complaint was the one in August 2009 - because it came at the end of the prolonged fall in the share price following the financial crash. But in EVERY case since I've been a shareholder, any substantial issue has included an opportunity for existing shareholders to buy on the same terms as new shareholders.This is a very important point, as it is observable that other companies commonly raise funds via a placing alone - leaving their existing shareholders no way of avoiding dilution when there is a discounted issue.
I'd also point out that the sums raised in aggregate (£63mn over 6 years) are not particularly large. For example, compare with these:
- Cove raised £110mn last November in a placing, after a previous £42mn placing in September 2009 - and neither included an open offer or rights for existing shareholders.
- Dominion raised £33mn in March 2010 in a placing, having raised $67mn via a placing and convertible in July 2007.
-Petroceltic just raised £37mn in a placing last week, having raised £81mn via a placing in March 2010
- Circle raised £43mn in a placing in August 2010 and £33mn in a placing in August 2008
I therefore wonder whether this regular refrain from retail investors about "constant dilution" or "begging bowls" is more reflective of a point of view that says that they would prefer to be diluted via straightforward placings (as shareholders in other companies have been) rather than having a fair shot at putting more money in out of their own pockets?
Obviously everyone would prefer to see the share price rising sharply after successful operational news following fund-raisings....and it is a frustration when this doesn't happen. But, as the above examples illustrate, Aminex hasn't raised particularly large sums from shareholders - so I'm therefore wondering whether the negative comments about "constant dilution" and "begging bowls" is in fact due to the company having tried too hard to give existing shareholders the opportunity to participate?
I don't wish to hijack this thread for the purpose (as it is somewhat academic at present) but I'm always happy to hear from people about whether they would prefer the company to go the lower cost route of a clean placing (at any future juncture) rather than the Open Offer approach that has been followed recently. It is, however, my belief that shareholders value the opportunity to come in alongside placees - but, if that is actually the case, then I'd rather there were fewer complaints on bulletin boards about having had the opportunity.
E&OE (and all figs etc are approximate)
ee
ee.
What would be useful is to see Aminex registered office move to Canada. By doing so buyers would no longer have to pay 1% stamp duty, infact the stamp duty would be 0.
It makes absolutely no sense in my mind for holders to pay 1% stamp duty. Even paying 0.5% less and being able to pick up more shares would have a dramatic impact on the shares being acquired imho.
ee,
I'd also point out that the sums raised in aggregate (£63mn over 6 years) are not particularly large.
This fact is actualy quite amusing as the market cap is currently £60mn. Which beg's the question what value has the management actually added over the last 6 years? Why compare against Cove which has done a remarkable job for it's shareholders despite the placing. You see people don't mind as much providing they get a return. In 3 out of the 4 placings people can currently buy the shares cheaper in the market. What does that tell you? There really is NO point in justifying and defending the undefendable imho.
And no there is no point in saying Obviously everyone would prefer to see the share price rising sharply after successful operational news following fund-raisings....and it is a frustration when this doesn't happen
The fact is the markets have been buoyant and a number of e+p companies have done well in this time frame. So there is no point in blaming the market, you need to look closer to home imho.
But fwiw I don't care about the past & I am not a big fan of management. However I do like the current prospects & do believe a decent strike on Nyuni will see us higher (whether there is a large amount of gas or even Oil is out of managements hand) Therefore I am prepared to Invest at current levels as it is good risk reward & it looks less likely of a placing happening for a while imho.
I'm always happy to hear from people about whether they would prefer the company to go the lower cost route of a clean placing
As you've asked ee, I for one certainly appreciate the fact that (unusually amongst smallcap stocks) Aminex goes down the OO route. I would have been much less inclined to reinvest, had Aminex diluted s/hs by repeated placings rather than OOs. Nevertheless, the substantial number of shares now in issue does mean that a much larger increase in NAV is needed to restore the SP to levels seen in past years.
Shareholders will be much less grumpy if and when Aminex has some concrete success in monetising assets, by production increases, farmdowns on attractive terms (perhaps following drilling success) or asset sales at good prices.
Mark
Shareholders will be much less grumpy if and when Aminex has some concrete success in monetising assets, by production increases, farmdowns on attractive terms (perhaps following drilling success) or asset sales at good prices.
Mark,
You miss out an important point in the above - which is that shareholders will only be less grumpy if the share price goes up in response to some or all of the above! That is for the market to decide. Most shareholders (as Isaac demonstrates) only care about the share price.
rgds
I cannot understand the constant moaning and snide remarks some posters see fit to produce regarding Aminex.
Aminex does exactly "what it says on the tin". It engages in a mix of low and high risk exploration activies. The lower risk activities are in the USA and are now coming together it seems quite well. The delay in benefitting from the Alto Loma discovery was due to technical reasons combined with the fact that Aminex is part of a consortium of which it is not the operator. In other words the delay was no fault of management. Again the Shoats Creek progress was held up for years by the need to obtain the seismic survey from a third party - credit to the management for securing the advantage of expensive seismic at no cost to Aminex.
In Tanzania Aminex was, IIRC, the first company in recent years to take out licences in an area which has subsequently become one of the hottest exploration areas in the world with most of the surrounding acreage subsequently taken by major companies. The Aminex acreage is onshore and close to shore I.e. shallow water. The deep water acreage is much more expensive to drill and not suitable for a company of Aminex's size. With regard to the near shore licences it has been able to drill from islands thereby minimising drilling cost, again a credit to management. To date the discoveries in Tanzania have been gas but Aminex believes that there is the prospect of oil as well as gas and has produced evidence of the existence of oil in two wells so far. As I understand it Aminex believes the best prospect of oil is onshore or close to shore. Whether this is correct or not remains to be seen but if correct the rewards could be substantial.
I would suggest that the delays in Tanzania were mainly due to others and not the management although perhaps a faster exploration programme might have been possible if the company had more capital - i.e. even more dilution!
As a small private investor I must say I really appreciate the opportunity Aminex has given private shareholders to participate if fund raising - so many companies don't incur the expense and delay which is understandable but very frustrating.
I think much of the criticism of Aminex management is ill informed and arises from the fact that many investors do not appreciate the limitations placed on management of small exploration companies through limited funds and non-operated interests.
All public companies have non executive directors and any serious investor should be aware of their function. If not I suggest that they should find out without resorting to unnecessary questions bordering on insult.
BB It is wrong to attempt to draw a director into a dispute about his and other directors' roles on a public BB and I think your remarks are unfair. ee is restricted in what he can say regarding Aminex and his role in the company - as you should know.
ee has a substantial investment in Aminex, which makes that £25K he draws as NED remuneration scant compensation for the restrictions he has to live under (regarding trading shares as well as what he can say and the attacks he has to put up with).
Yes, Aminex has not delivered lately, but IMO the directors and executives are doing all they can to try to achieve a result. I do not find their salaries excessive, considering the nature of business they are running (though they are not too miserly either).
ee - in response to your point, in my own case short-term share price movement is secondary. What I want to see is stabilisation of Aminex's financial position. If Aminex delivers and the SP doesn't respond, then I'd be very happy to take that as a buying opportunity. As long as there is delivery - recognisable in cash or cash equivalent terms - eventually the SP will respond.
Mark
If Aminex delivers and the SP doesn't respond, then I'd be very happy to take that as a buying opportunity. As long as there is delivery - recognisable in cash or cash equivalent terms - eventually the SP will respond.
I concur. I will be buying ALOT more if Nyuni and Likonde works out. Nyuni-2 could be worth almost as much as the current share price & Likonde can be worth a lot more if they strike Oil.
Aminex have the cash to drill both wells and we are literally days away from Nyuni Spud which can be transformational for Aminex.
Bad luck can easily change in this business, it is very much a results driven business and you only need to get lucky on one well & the price can rocket.
If neither well works then Brian Hall should sell US assets and return cash to shareholders & liquidate the company imho - This may well happen as quite a few directors have quite a bit of money invested & I am sure they too want a return on their money.
The Risk:Reward is favourable imho. You take a risk & if it works then you make quite a bit of money & if it does'nt work then that is just Investing for you.
I hope Bankerbasher that on reflection you will realise that such comments are not just against the spirit of this board, but also not in any shareholders best interests. I trust that experienced contributors will not allow such disruptive comments to detract from more valued comment at a critical time in the companies development ;-)
£25K he draws as NED remuneration
It is £20k, in fact. And occasional options. I currently have options to increase my direct shareholding by 200,000 shares - which is 12% of my direct shareholding stake - but ONLY if I pay 8.5p per share to the company. People may wish to compare those figures with the remuneration and exercise terms for options/LTIPs for NEDs elsewhere. :-)
ee
Just to jump on the bankerbasher-bashing bandwagon, having met ee at a NED training event a mere few months after he started in the role, I find the attack to be quite pathetically laughable if not for the vitriol:
1. as marben has pointed out, the salary is inconsequential compared to his holdings in AEX
2. the salary in no way compensates for the risks he runs whilst acting as a custodian for shareholders and other stakeholders in the business
3. 10 or 20 year chart??? Clearly you've checked how long ee has been a director of AEX!
4. even from that brief encounter, it is clear to me that ee takes his role seriously, has plenty at stake financially and reputationally with AEX, and as others have pointed out, is quite restricted in what he can say on a public BB and yet still continues to do so to ensure the facts don't get misplaced amongst all the whinging about what is a small oil & gas explorer operating in countries where things don't run quite as smoothly and quickly as we would all like - none of this is a secret and if one doesn't like those risks at the price available, then one doesn't have to hold the shares
If you do hold the shares, please grow up & take responsibility for that decision yourself.
