REG - Aminex PLC - 2024 Half-Yearly Financial Report
30/09/2024 07:00
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RNS Number : 1237G Aminex PLC 30 September 2024
30 September 2024
2024 HALF-YEARLY FINANCIAL REPORT
Aminex PLC ("Aminex" or "the Group" or "the Company") announces its unaudited
half-yearly report for the six months ended 30 June 2024.
REPORTING PERIOD HIGHLIGHTS
· Signing of a gas sales agreement for the sale of Ntorya gas to
the Tanzania Petroleum Development Corporation.
· Award of a 25-year development licence over the Ntorya gas
discovery area.
· Commitment from the Government of Tanzania to complete the
construction of the Ntorya to Madimba pipeline within six months.
· A significant resource upgrade over the Ntorya discovery and
wider area.
· Loss for the period of US$1.35 million (30 June 2023: loss of
US$0.96 million).
Charles Santos, Executive Chairman of Aminex commented:
"We are pleased with this year's progress on critical commercial aspects of
the Ntorya project - the signing of the Gas Sales Agreement and the issuance
of the Development Licence. We are excited about ARA Petroleum Tanzania
Limited's 3D seismic survey results, which highlighted significant additional
resources for the Ntorya discovery and wider area. We look forward to progress
on operations through ARA Petroleum Tanzania Limited in the coming months. We
are impressed with the Tanzanian Government's resolve to expedite the gas
pipeline construction from Ntorya to the Madimba gas plant and its clear
commitment to use its gas resources to improve the economic conditions of the
Tanzanian people."
For further information:
Aminex PLC +44 203 355 9909
Charles Santos, Executive Chairman
Knights Media & Public Relations +44 203 653 0200
Jason Knights, Sabina Zawadzki
Davy +353 1 679 6363
Brian Garrahy
Shard Capital +44 20 7186 9952
Damon Heath
INTERIM MANAGEMENT REPORT
Executive Chairman's Review
Aminex PLC's results for the six months ended 30 June 2024 are set out below.
The Company reports a loss for the period of US$1.35 million (30 June 2023:
US$0.96 million). Further information is provided in the Financial Review.
During 2024, the following crucial events have occurred:
· The signing of a gas sales agreement for the sale of Ntorya gas
to the Tanzania Petroleum Development Corporation (TPDC), securing a route to
market for production from Ntorya.
· The issuance of the Ntorya 25-year Development Licence. The
Development Licence is a significant milestone for our Company and for the
United Republic of Tanzania, as it is the first such licence issued in more
than 13 years, ushering in a new and more dynamic approach to gas production
and energy investment in Tanzania.
· The Development Licence Handover Ceremony in Mtwara. This
significant event marked the full and public commitment of the Tanzanian
government to develop the Ntorya project as a key priority in its urgent
effort to address its power shortages and bring the benefits of natural gas to
the people of Tanzania.
· The clear and public commitment from the Office of the President
and the Office of the Prime Minister to construct a gas pipeline spur from
Ntorya to the Madimba gas processing plant in the coming six months.
Furthermore, Eclipse Investments LLC and Aminex signed a funding facility for
US$3.00 million in April, ensuring Aminex has sufficient working capital
available after 2024 and until the commencement of revenues from Ntorya gas
sales.
Ruvuma PSA
In addition to the events mentioned above, I also wish to note the importance
of the acquired, processed, and interpreted 338 km(2) 3D seismic in 2022 and
2023, which resulted in the identification of significant additional potential
gas volumes within the licence area. The most likely gas initially in place
(GIIP) potentially connected to the reservoir sandstones encountered in the
Ntorya-1 (NT-1) and Ntorya-2 (NT-2) discovery wells is now estimated to be
3.45 trillion cubic feet (TCF). Furthermore, the 3D seismic dataset supports a
substantial in-place unrisked resource potential of 16.38 TCF.
The Government of Tanzania's prioritisation of the Ntorya project means it has
the potential to be developed within a timescale so that Ntorya gas can
immediately service a fast-developing domestic market. Moreover, with the
government's full support, the TPDC is empowered to move quickly to select a
contractor to construct the gas pipeline spur to Madimba to meet the six-month
timeline articulated by Tanzania's leadership.
Kiliwani North and Kiliwani South - Kiliwani North Development Licence (KNDL)
We have recently had positive discussions with the TPDC and other Tanzanian
government authorities on how best to proceed to ensure investment and gas
production from this block. These discussions have, among other things,
focused on the importance of revenue generation from Ntorya/the Ruvuma PSA.
Nyuni Area PSA
We continue to have useful discussions with TPDC regarding the Nyuni Area PSA.
Financial Prudence and Funding
The Farm-Out of the Ruvuma PSA in 2020 carries the Company to potentially
material levels of production and gas revenues without the need to return to
shareholders for additional funding for the development of the Ntorya field.
The Company holds a 25% interest in the Ruvuma PSA with a US$35 million carry
of its share of costs. The carry, equivalent to US$140 million of gross field
expenditure, is expected to see the Company through to potentially significant
gas production volumes with commensurate revenues.
Moreover, we appreciate the continued strong support from our cornerstone
investor, Eclipse Investments LLC, which has agreed to provide a funding
facility for US$3.00 million against the carry, ensuring Aminex has sufficient
working capital available after 2024 and until the commencement of revenues
from Ntorya gas sales.
We continue to operate with significantly reduced costs and corporate
overheads established in recent years. Base running costs (which exclude
non-cash and one-off items), before recharges, increased by 6.5% to US$0.85
million for the six month period to 30 June 2024, compared with US$0.80
million for the same period in 2023. Despite this rise, base running costs are
67% lower, on an annualised basis, than 2018 levels when cost cutting measures
were introduced. The Company has maintained an appropriate structure of
capabilities and competencies that match current requirements with a more
flexible approach that de-risks our business and creates strategic
opportunities.
Outlook
This year has been decisive for our Company. We have made significant progress
in the Ntorya project, providing shareholders with several catalytic events.
More of these value inflection points will come. This year's events have
improved the Company's underlying value and demonstrated the Operator's
capacity to run numerous critical negotiations and operational workstreams. Of
further importance, the Government of Tanzania has indicated its full support
for and significance of Ntorya gas production in the shortest time feasible.
The net result for Aminex is an essential shift in the narrative of Ntorya,
which can now be considered a potentially world-class discovery with a path to
positive cash flow by next year - a remarkable turnaround for the Company
since 2020.
I want to thank our shareholders for their continued support and patience.
Yours sincerely,
Charles Santos
Executive Chairman
30 September 2024
Financial Review
Revenue Producing Operations
Revenues from continuing operations amounted to US$0.02 million (30 June 2023:
US$0.08 million). Group revenues during the first six months of 2024 are
derived from the provision of technical and administrative services to joint
operations.
Cost of sales was US$0.03 million (30 June 2023: US$0.11 million). The cost of
sales for Kiliwani North operations amounted to US$0.02 million (30 June 2023:
US$0.08 million) and included general licence related maintenance costs. There
was no depletion charge for Kiliwani North as the period saw no production (30
June 2023: US$ nil). The balance of the cost of sales amounting to US$0.01
million (30 June 2023: US$0.03 million) related to the oilfield services
operations and minor non-operated costs related to the Group's interest in the
Ruvuma PSA. Accordingly, there was a gross loss of US$0.01 million for the
period compared with a gross loss of US$0.03 million for the comparative
period.
Group administrative expenses, excluding depreciation and net of costs
capitalised against projects, were US$0.99 million (30 June 2023: US$0.78
million), an increase of US$0.21 million. The increase in expenses during the
period was due mainly to increases in the non-cash share options charge
(US$0.16 million) and in consulting fees (US$0.09 million), partially offset
by reductions in tax provisions (US$0.03 million) and payroll costs (US$0.03
million). Management continues to maintain strict expenditure controls in
order to help maintain the cost-saving gains achieved since 2018, although
inflationary pressures have recently had an adverse effect.
The Group recognised an impairment during the six-month period against
exploration and evaluation assets of US$196,000 (30 June 2023: US$196,000).
This is comprised solely of expenditure incurred on the Nyuni Area PSA (30
June 2023: US$181,000), which relates mainly to own costs for geological,
geophysical and administrative work and licence maintenance costs, along with
training and licence fees. There was no expenditure incurred during the
six-month period on Kiliwani South Area (30 June 2023: US$15,000). All
expenditure on the Nyuni Licence Area and the Kiliwani South Area continues to
be impaired immediately to the income statement upon recognition following the
full impairment in 2018 and 2021 respectively. The Group's resulting net loss
from operating activities was US$1.29 million (30 June 2023: loss of US$0.98
million).
Finance income of US$18,000 is a result of foreign exchange gains (30 June
2023: US$108,000).
Finance costs amounted to US$76,000 (30 June 2023: US$80,000) and relates
solely to the decommissioning interest charge (30 June 2023: US$80,000).
The Group's net loss for the period amounted to US$1.35 million (30 June 2023:
US$0.96 million).
Balance Sheet
The Group's investment in exploration and evaluation assets increased slightly
from US$37.98 million at 31 December 2023 to US$38.00 million at 30 June
2024. This was due to an increase of US$0.02 million of own costs for the
Ruvuma PSA CGU. As noted above, all expenditure on the Nyuni Licence Area and
the Kiliwani South Area continues to be impaired immediately to the income
statement upon recognition as both are fully impaired. In accordance with the
Group's accounting policy, the Group does not record expenditure for its share
of costs that are carried by ARA Petroleum Tanzania Limited ("APT") in
relation to the Ruvuma PSA asset. The Group is carried for a total of US$35.0
million of development expenditure on the Ruvuma PSA, with carried expenditure
in the period relating to development activities.
The carrying value of property, plant and equipment ("PP&E") has decreased
from US$4,000 at 31 December 2023 to US$3,000 at 30 June 2024. This is a
result of depreciation for the period and no purchases of new equipment. The
costs for the Kiliwani North CGU are included in PP&E but are fully
impaired (see Note 9).
Current assets amounted to US$3.28 million (31 December 2023: US$4.63 million)
with trade and other receivables of US$1.50 million (31 December 2023: US$1.59
million), which as operator includes joint operations partner's interests in
gas revenues, and cash and cash equivalents of US$1.78 million (31 December
2023: US$3.04 million). The decrease in current assets of US$1.35 million
predominantly related to the reduction in cash due to expenditures on G&A
and tax payments.
Current liabilities amounted to US$7.82 million compared with US$8.19 million
at 31 December 2023. This balance included amounts payable to joint operations
partners for their profit shares from invoiced gas sales, related VAT and
excise tax payable on the gas receivables invoices and provisions and accruals
for taxes. The decrease related mainly to US$0.33 million in payments to the
TRA for accrued VAT and WHT included in the 2019-2020 tax assessment and
reduction of amounts due to joint operations partners of US$0.15 million,
offset by an increase of US$0.18 million in accrued training and licence fee
invoices from the Petroleum Upstream Regulatory Authority in Tanzania.
Non-current liabilities are US$1.92 million (31 December 2023: US$1.82
million) being the decommissioning provision which increased during the period
as a result of the unwind of the discount during the period of US$0.08 million
and US$0.02 million for an increase in estimated costs due to changes in
inflation and discount rates.
Total equity has decreased by US$1.07 million between 31 December 2023 and 30
June 2024 to US$31.54 million (31 December 2023: US$32.61 million). This is
due to the increase in the retained deficit arising from the loss for the
period, offset by increases in issued capital and share premium (US$0.08
million as a result of share options exercised) and the movement in the share
option reserve.
Cash Flows
Net cash outflows from operating activities were US$1.29 million during the
period (30 June 2023: cash outflow of US$0.71 million), being mainly G&A
expenditures and payment of accrued indirect taxes. Net cash outflows from
investing activities amounted to US$0.07 million (30 June 2023: US$0.17
million), mainly for care and maintenance expenditure on the KND Licence. Cash
inflows from financing activities during the period were US$ 0.08 million from
share issue proceeds (30 June 2023: US$nil). Net cash and cash equivalents
for the six months ended 30 June 2024 therefore decreased by US$1.28 million
compared with a decrease of US$0.88 million for the comparative half-year
period. The balance of net cash and cash equivalents at 30 June 2024 was
US$1.78 million (30 June 2023: US$5.04 million).
Related party transactions
There have been no material changes in the related party transactions
affecting the financial position or the performance of the Group in the period
since publication of the 2023 Annual Report other than those disclosed in Note
14 to the condensed consolidated financial statements.
Going Concern
The financial statements of the Group are prepared on a going concern basis.
The Directors have given careful consideration to the Group's ability to
continue as a going concern through review of cash flow forecasts prepared by
management for the going concern period to 30 September 2025, review of the
key assumptions on which these forecasts are based and the sensitivity
analysis. The forecasts reflect the Directors' best estimate of expenditures
and receipts during the going concern period. The forecasts are regularly
updated to enable continuous monitoring and management of the Group's cash
flow and liquidity risk. The forecasts indicate that, subject to the principal
assumptions noted below, the Group would have adequate resources to continue
as a going concern for the foreseeable future, that is a period of not less
than 12 months from the date of approval of the consolidated financial
statements.
As part of its analysis in making the going concern assumption, the Directors
have considered the range of risks facing the business on an ongoing basis, as
set out in the risk section of the 2023 Annual Report, that remain applicable
to the Group. The principal assumptions made in relation to the Group's going
concern assessment relate to the capital commitments on its operated assets in
Tanzania, the reservation of rights made by the TPDC in respect of certain
claims that the Directors consider are without merit and the ongoing
objections to the tax assessments in Tanzania (see Note 13).
Current liabilities of the Group exceeded its current assets as at 30 June
2024, mainly as a result of provisions made for some contested tax
assessments. As disclosed in Note 13, the Group received a tax assessment in
February 2020 from the Tanzania Revenue Authority ("TRA") of US$2.2 million in
relation to an audit of the Group's Tanzanian wholly owned subsidiary covering
the period from 2013 to 2015 and tax assessments in June 2022 for US$4.8
million in relation to audits covering the period from 2016 to 2018. These tax
assessments are excluded from the cash forecast as any cash outflow during the
going concern period is not considered probable based on either legal advice
or the timeframes for tax cases in Tanzania. Tax assessments received in June
2023 from the TRA of US$3.3 million in relation to an audit covering the
period from 2019 to 2020 are included insofar as they are covered by a payment
plan agreed with the TRA in June 2024. Additionally, development and
decommissioning of the Group's assets in Tanzania is excluded from the cash
forecast. The Group commenced discussions with the Tanzanian authorities
during 2022 to return the Nyuni Area licence to the Ministry of Energy and
such discussions have resulted in the Group being requested to market the
licence in 2023 and 2024, in an attempt to find a third-party partner willing
to pursue and fund a mutually agreed re-negotiated work programme. Regardless
of whether the farm-out process is successful or not, it is not considered
probable that any capital expenditure would arise in the period. However, a
risk exists that the Group lose the objections to the tax assessments or may
be unable to renegotiate or defer commitments relating to the development or
decommissioning of the operated Licence interests during the period, or that
the TPDC may take action to enforce their claims to certain rights during the
period and, therefore, the Group may need to raise additional funding to meet
these potential liabilities, in addition to the US$3 million funding facility
agreement between Aminex and Eclipse Investments LLC, a major shareholder in
the Company, signed in April 2024. There is material uncertainty as to its
ability to raise such additional funding. This may result in the Group having
to raise funds at whatever terms are available at the time, which is not
guaranteed.
These circumstances indicate that a material uncertainty exists that may cast
significant doubt on the Group's ability to continue as a going concern and,
therefore, the Group may be unable to realise its assets and discharge its
liabilities in the normal course of business. As the Group has been successful
in raising equity funds at various times and in similar circumstances in the
recent past on acceptable terms to the Group, the Directors have a reasonable
expectation that additional funding can be raised. Despite the aforementioned
material uncertainty, the Directors have confidence in the Group's forecasts
and have a reasonable expectation that the Group will continue in operational
existence for the foreseeable future and have therefore used the going concern
basis in preparing these financial statements. The financial statements do not
include the adjustments that would result if the Group were unable to continue
as a going concern.
Principal Risks and Uncertainties
The Group's strategic objectives for its principal activities, being the
production and development of and the exploration for oil and gas reserves,
are only achievable if certain risks are managed effectively. The Board has
overall accountability for determining the type and level of risk it is
prepared to take. The Board is assisted by the Audit and Risk Committee, which
oversees the process for review and monitoring of risks, and the
implementation of mitigation actions, by management. The Audit and Risk
Committee reviews management's findings regularly and reports to the Board
accordingly. Assessment of risks is made under four categories: Strategic
Risks, Operational Risks, Compliance Risks and Financial Risks.
Aminex has reviewed and assessed the principal risks and uncertainties at 30
June 2024 and concluded that the principal risks identified at 31 December
2023 and disclosed on pages 24 to 26 of the 2023 Annual Report are still
appropriate. The following are considered to be the key principal risks facing
the Group over the next six months although there are other risks which may
impact the Group's performance:
· Ability to meet licence work commitments
· Lack of exploration, appraisal and development drilling success
· Adverse and unexpected tax assessments in Tanzania
· Ability to secure other financing for Group operations
· Political and fiscal uncertainties
Forward Looking Statements
Certain statements made in this half-yearly financial report are
forward-looking statements. Such statements are based on current expectations
and are subject to a number of risks and uncertainties that could cause actual
events or results to differ materially from the expected future events or
results referred to in these forward-looking statements.
Statement of Directors' Responsibilities
In respect of the Half-Yearly Financial Report
Each of the Directors who held office at the date of this report, confirm
their responsibility for preparing the half-yearly financial report in
accordance with the Transparency (Directive 2004/109/EC) Regulations 2007 (as
amended) and IAS 34 Interim Financial Reporting, as adopted by the EU and to
the best of each person's knowledge and belief:
· The condensed consolidated financial statements comprising the
condensed consolidated income statement, the condensed consolidated statement
of comprehensive income, the condensed consolidated balance sheet, the
condensed consolidated statement of changes in equity, the condensed
consolidated statement of cashflows and the related explanatory notes have
been prepared in accordance with IAS 34 Financial Reporting as adopted by the
EU.
· The Interim Management Report includes a fair review of the
information required by:
(a) Regulation 8(2) of the Transparency (Directive 2004/109/EC)
Regulations 2007, being an indication of important events that have occurred
during the first six months of the financial year and their impact on the
condensed set of financial statements; and a description of the principal
risks and uncertainties for the remaining six months of the year; and
(b) Regulation 8(3) of the Transparency (Directive 2004/109/EC)
Regulations 2007, being related party transactions that have taken place in
the first six months of the current financial year and that have materially
affected the financial position or performance of the entity during that
period; and any changes in the related party transactions described in the
last annual report that could do so.
On behalf of the Board
Charles Santos
Executive Chairman/Director
30 September 2024
Aminex PLC
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June
2024
Notes Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 2024 30 June 2023 31 December 2023
US$'000 US$'000 US$'000
Continuing operations
Revenue 2 21 81 112
Cost of sales (29) (114) (82)
Gross loss (8) (33) (30)
Administrative expenses (986) (776) (695)
Impairment against exploration and evaluation assets
8 (196) (196) (346)
Impairment against property, plant and equipment assets
9 (107) 21 (103)
Loss from operating activities (1,297) (984) (1,114)
Finance income 4 18 108 154
Finance costs 5 (76) (80) (159)
Loss before tax (1,355) (956) (1,119)
Income tax expense 6 - - -
Loss for the period 2 (1,355) (956) (1,119)
Loss per share
Basic and diluted (US cents) 7 (0.03) (0.02) (0.03)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2024
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 2024 30 June 2023 31 December 2023
US$'000 US$'000 US$'000
Loss for the period (1,355) (956) (1,119)
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss:
Currency translation differences (8) 29 37
Total comprehensive expense for the period attributable to the equity holders
of the Company
(1,363) (927) (1,082)
Aminex PLC
CONDENSED CONSOLIDATED BALANCE SHEET
At 30 June
2024
Notes Unaudited Unaudited 30 June Audited
30 June 2023 31 December 2023
2024 US$'000 US$'000
US$'000
Assets
Non-current assets
Exploration and evaluation assets 8 38,001 38,032 37,978
Property, plant and equipment 9 3 5 4
Total non-current assets 38,004 38,037 37,982
Current assets
Trade and other receivables 10 1,500 1,562 1,592
Cash and cash equivalents 11 1,778 5,036 3,041
Total current assets 3,278 6,598 4,633
TOTAL ASSETS 41,282 44,635 42,615
Equity
Issued capital 69,703 69,695 69,695
Share premium 128,409 128,340 128,340
Other undenominated capital 234 234 234
Share option reserve 1,603 1,290 1,541
Foreign currency translation reserve (2,275) (2,275) (2,267)
Retained deficit (166,134) (164,771) (164,934)
Total equity 31,540 32,513 32,609
Liabilities
Non-current liabilities
Decommissioning provision 1,920 1,916 1,821
Total non-current liabilities 1,920 1,916 1,821
Current liabilities
Trade and other payables 12 7,822 10,206 8,185
Total current liabilities 7,822 10,206 8,185
Total liabilities 9,742 12,122 10,006
TOTAL EQUITY AND LIABILITIES 41,282 44,635 42,615
Aminex PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2024
Attributable to equity shareholders of the Company
Share premium Other undenominated capital Share option reserve Foreign currency translation reserve Retained deficit Total equity
Share capital
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
At 1 January 2023 69,695 128,340 234 1,231 (2,304) (163,815) 33,381
Comprehensive income
Loss for the period - - - - - (956) (956)
Currency translation differences
- - - - 29 - 29
Transactions with shareholders of the Company recognised directly in equity
Share based payment charge - - - 59 - - 59
At 30 June 2023 69,695 128,340 234 1,290 (2,275) (164,771) 32,513
Comprehensive income
Loss for the period - - - - - (163) (163)
Currency translation differences - - - - 8 - 8
Transactions with shareholders of the Company recognised directly in equity
Share-based payment charge - - - 251 - - 251
69,695 128,340 234 1,541 (2,267) (164,934) 32,609
At 31 December 2023 as previously reported
Comprehensive income
Loss for the period - - - - - (1,355) (1,355)
Currency translation differences
- - - - (8) - (8)
Transactions with shareholders of the Company recognised directly in equity
Shares issued 8 69 - - - - 77
Shares options reserve transfer
- - - (155) - 155 -
Share based payment charge - - - 217 - - 217
At 30 June 2024 (unaudited) 69,703 128,409 234 1,603 (2,275) (166,134) 31,540
( )
Aminex PLC
CONDENSED CONSOLIDATED STATEMENT OF CASHFLOWS
for the six months ended 30 June 2024
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 2024 30 June 2023 31 December 2023
US$'000 US$'000 US$'000
Operating activities
Loss for the financial period (1,355) (956) (1,119)
Depreciation and depletion 1 1 3
Equity-settled share-based payments 217 59 310
Finance income (18) (108) (154)
Finance costs 76 80 159
Impairment of exploration and evaluation assets 196 196 346
Impairment of property, plant and equipment 107 (21) 103
Trade receivables write-off - - -
(Increase) / decrease in trade and other receivables (4) (240) (254)
(Decrease) / increase in trade and other payables (506) 280 (2,048)
Net cash (used in) / generated by operating activities (1,286) (709) (2,654)
Tax paid - - -
Net cash (outflows) / inflows from operating activities (1,286) (709) (2,654)
Investing activities
Acquisition of property, plant and equipment (43) - (202)
Expenditure on exploration and evaluation assets (29) (168) (62)
Net cash (outflows) / inflows from investing activities (72) (168) (264)
Financing activities
Proceeds from the issue of share capital 77 - - -
Payment of transaction costs on issue of share capital - - -
Payment of borrowings - - -
Payment of interest on borrowings - - -
Net cash inflows / (outflows) from financing activities 77 - -
Net (decrease) / increase in cash and cash equivalents (1,281) (877) (2,918)
Cash and cash equivalents at 1 January 3,041 5,805 5,805
Foreign exchange gain 18 108 154
Cash and cash equivalents at end of the financial period 1,778 5,036 3,041
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
for the six months ended 30 June 2024
1. Basis of preparation
The condensed consolidated financial statements included in this Half-Yearly
Financial Report have been prepared in accordance with IAS 34 "Interim
Financial Reporting" as adopted by the European Union. They do not include all
of the information required for full annual statutory financial statements and
should be read in conjunction with the audited consolidated financial
statements of Aminex PLC as at and for the year ended 31 December 2023. The
financial information contained in the condensed financial statements has been
prepared in accordance with the accounting policies set out in the 2023 Annual
Report and Accounts.
The financial information presented herein does not amount to statutory
financial statements that are required by Part 6 of Chapter 4 of the Companies
Act 2014 to be annexed to the annual return of the Company. The statutory
financial statements for the financial year ended 31 December 2023 were
annexed to the annual return and filed with the Companies Registration Office
in Ireland. The audit report on those statutory financial statements was
unqualified and included an emphasis of matter paragraph relating to going
concern.
The financial statements have been prepared on the historical cost basis, as
modified for the measurement of certain financial instruments at fair value
through profit or loss. These financial statements are presented in US Dollars
("USD") which is the currency of the primary economic environment in which the
Group operates and are rounded to the nearest thousand, unless otherwise
stated. The preparation of the Half-Yearly Financial Report requires the
Directors to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of certain assets, liabilities,
revenues and expenses together with disclosure of assets and liabilities.
Estimates and underlying assumptions relevant to these financial statements
are the same as those described in the last annual financial statements. Terms
used in this condensed set of consolidated financial statements are defined in
the Glossary on page 69 in the 2023 Annual Report and Accounts.
These condensed consolidated financial statements were authorised for issue by
the Board of Directors on 30 September 2024.
The Interim Report has not been audited or formally reviewed by the Company's
Auditor in accordance with the
International Standards on Auditing (ISAs) (Ireland) or International
Standards on Review Engagements (ISREs).
(i) Going concern
The financial statements of the Group are prepared on a going concern basis.
The Directors have given careful consideration to the Group's ability to
continue as a going concern through review of cash flow forecasts prepared by
management for the going concern period to 30 September 2025, review of the
key assumptions on which these forecasts are based and the sensitivity
analysis. The forecasts reflect the Directors' best estimate of expenditures
and receipts during the going concern period. The forecasts are regularly
updated to enable continuous monitoring and management of the Group's cash
flow and liquidity risk. The forecasts indicate that, subject to the principal
assumptions noted below, the Group would have adequate resources to continue
as a going concern for the foreseeable future, that is a period of not less
than 12 months from the date of approval of the consolidated financial
statements.
As part of its analysis in making the going concern assumption, the Directors
have considered the range of risks facing the business on an ongoing basis, as
set out in the risk section of the 2023 Annual Report, that remain applicable
to the Group. The principal assumptions made in relation to the Group's going
concern assessment relate to the capital commitments on its operated assets in
Tanzania, the reservation of rights made by the TPDC in respect of certain
claims that the Directors consider are without merit and the ongoing
objections to the tax assessments in Tanzania (see Note 13).
Current liabilities of the Group exceeded its current assets as at 30 June
2024, mainly as a result of provisions made for some contested tax
assessments. As disclosed in Note 13, the Group received a tax assessment in
February 2020 from the Tanzania Revenue Authority ("TRA") of US$2.2 million in
relation to an audit of the Group's Tanzanian wholly owned subsidiary covering
the period from 2013 to 2015 and tax assessments in June 2022 for US$4.8
million in relation to audits covering the period from 2016 to 2018. These tax
assessments are excluded from the cash forecast as any cash outflow during the
going concern period is not considered probable based on either legal advice
or the timeframes for tax cases in Tanzania. Tax assessments received in June
2023 from the TRA of US$3.3 million in relation to an audit covering the
period from 2019 to 2020 are included insofar as they are covered by a payment
plan agreed with the TRA in March 2024. Additionally, development and
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
for the six months ended 30 June 2024
1. Basis of preparation (continued)
(i) Going concern (continued)
decommissioning of the Group's assets in Tanzania is excluded from the cash
forecast. The Group commenced discussions with the Tanzanian authorities
during 2022 to return the Nyuni Area licence to the Ministry of Energy and
such discussions have resulted in the Group being requested to market the
licence in 2023 and 2024, in an attempt to find a third-party partner willing
to pursue and fund a mutually agreed re-negotiated work programme. Regardless
of whether the farm-out process is successful or not, it is not considered
probable that any capital expenditure would arise in the period. However, a
risk exists that the Group lose the objections to the tax assessments or may
be unable to renegotiate or defer commitments relating to the development or
decommissioning of the operated Licence interests during the period, or that
the TPDC may take action to enforce their claims to certain rights during the
period and, therefore, the Group may need to raise additional funding to meet
these potential liabilities, in addition to the US$3 million funding facility
agreement between Aminex and Eclipse Investments LLC, a major shareholder in
the Company, signed in April 2024. There is material uncertainty as to its
ability to raise such additional funding. This may result in the Group having
to raise funds at whatever terms are available at the time, which is not
guaranteed.
These circumstances indicate that a material uncertainty exists that may cast
significant doubt on the Group's ability to continue as a going concern and,
therefore, the Group may be unable to realise its assets and discharge its
liabilities in the normal course of business. As the Group has been successful
in raising equity funds at various times and in similar circumstances in the
recent past on acceptable terms to the Group, the Directors have a reasonable
expectation that additional funding can be raised. Despite the aforementioned
material uncertainty, the Directors have confidence in the Group's forecasts
and have a reasonable expectation that the Group will continue in operational
existence for the foreseeable future and have therefore used the going concern
basis in preparing these financial statements. The financial statements do not
include the adjustments that would result if the Group were unable to continue
as a going concern.
(ii) Use of judgements and estimates
The preparation of the condensed consolidated financial statements requires
management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these
estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimates are revised and in any future periods affected.
The significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty were the
same as those described in the 2023 Annual Report and Accounts.
(iii) New and amended standards adopted by the Group
A number of amended standards became effective for the financial year
beginning on 1 January 2024; however, the Group did not have to change its
accounting policies or make retrospective adjustments as a result of adopting
these amended standards.
(iv) Impact of standards issued but not yet adopted by the Group
There are no standards issued but not yet adopted by the Group.
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
for the six months ended 30 June 2024
2. Segmental disclosure - continuing operations
An operating segment is a component of the Group that engages in business
activities from which it may earn revenues and incur expenses, including
revenues and expenses that relate to transactions with any of the Group's
other components.
The Group considers that its operating segments consist of (i) Producing Oil
and Gas Properties, (ii) Exploration Activities and (iii) Oilfield Services.
These segments are those that are reviewed regularly by the Chief Operating
Decision Maker (Executive Chairman) to make decisions about resources to be
allocated to the segment and assess its performance and for which discrete
financial information is available. However, the Group 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 Aminex Group items comprise mainly head office
expenses, cash balances and certain other items.
The Group's revenue is derived from contracts with customers. The timing of
revenue streams depends on the following for products and services:
Producing oil and gas assets
The Group satisfies its performance obligation by transferring a nominated
volume of gas to its customer. The title to gas transfers to a customer when
the customer takes physical possession of the gas at the contracted delivery
point. The gas needs to meet certain agreed specifications. The Group
generated no revenue for the period under this segment (30 June 2023: US$nil).
Oilfield services
Revenue for services is recognised as services are rendered to the customer.
All services rendered by the Group relate to jointly controlled operations to
which the Group is a party and the terms of the services provided are subject
to service contracts.
The IFRS 8 operating segments as follows (i) Producing Oil and Gas Properties,
(ii) Exploration Activities and (iii) Oilfield Services are the disaggregation
of revenue from customers as required by IFRS 15.
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
for the six months ended 30 June 2024
2. Segmental disclosure - continuing operations (continued)
Operating segment results - 30 June 2024 (unaudited)
US$'000 Tanzania Tanzania UK Unallocated
Producing oil and gas properties Corporate Aminex
Exploration activities Oilfield services Group
Total
30 June 2024 30 June 2024 30 June 2024 30 June 30 June 2024
2024
Revenue - - 21 - 21
Cost of sales (9) (2) (18) - (29)
Gross loss (9) (2) 3 - (8)
Depreciation - - - (1) (1)
Administrative expenses (75) - (97) (813) (985)
Impairment against PP&E assets - (107) - - (107)
Impairment against exploration and evaluation assets - (196) - - (196)
Loss from operating activities (84) (305) (94) (814) (1,297)
Finance costs (16) (61) - 1 (76)
Finance income - - - - -
Foreign exchange gains - - - 18 18
Loss before tax (100) (366) (94) (795) (1,355)
Taxation - - - - -
Loss for the period (100) (366) (94) (795) (1,355)
Segment assets 1,483 38,123 - 1,676 41,282
Segment liabilities (2,415) (3,528) - (3,799) (9,742)
Capital expenditure additions 107 220 - - 327
Other material non-cash items
Share based payments (Note 3) - - - (217) (217)
Unwinding of discount on decommissioning provision (Note 5) (15) (61) - - (76)
Operating segment results - 30 June 2023 (unaudited)
US$'000 Tanzania Tanzania UK Unallocated
Producing oil and gas properties Corporate Aminex Group
Exploration activities Oilfield services
Total
30 June 2023 30 June 2023 30 June 2023 30 June 30 June 2023
2023
Revenue - - 81 - 81
Cost of sales (27) (6) (81) - (114)
Gross loss (27) (6) - - (33)
Depreciation - - - (1) (1)
Administrative expenses (113) - (97) (565) (775)
Impairment against PP&E assets 21 - - - 21
Impairment against exploration and evaluation assets - (196) - - (196)
Loss from operating activities (119) (202) (97) (566) (984)
Finance costs (19) (60) - (1) (80)
Finance income - - - - -
Foreign exchange gains - - - 108 108
Loss before tax (138) (262) (97) (459) (956)
Taxation - - - - -
Loss for the period (138) (262) (97) (459) (956)
Segment assets 2,388 38,143 - 4,104 44,635
Segment liabilities (3,846) (3,492) - (4,784) (12,122)
Capital expenditure additions (21) 180 - - 159
Other material non-cash items
Share based payments (Note 3) - - - (59) (59)
Unwinding of discount on decommissioning provision (Note 5)
(20) (60) - - (80)
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
for the six months ended 30 June 2024
3. Share based payments
Aminex PLC operates or operated the following share option schemes:
· Executive Share Option Scheme ("ESOS"). Under the terms of the
ESOS, certain Directors and employees of Aminex PLC, and its subsidiary
companies, were entitled to subscribe for Ordinary Shares in Aminex PLC at the
market value on the date of the granting of the options. Options are granted
at market price, in accordance with the ESOS rules, with reference to the
average closing price for the fourteen days prior to the grant of options.
Options granted in February 2019 and February 2020 vest immediately, and the
options granted in November 2019 and January 2020 vest in tranches subject to
the achievement of certain market and non-market performance conditions. The
options granted in 2019 and 2020 will expire at a date either 5, 7 or 10 years
after their date of grant. The ESOS expired on 10 May 2020 and therefore no
further share options will be granted pursuant to the ESOS.
· New Restricted Share Plan ("New RSP"). The New RSP was adopted by
the Board on 1 July 2020 and approved by shareholders of the Company at its
AGM on 29 July 2020.
There were no share options granted during the period.
The fair value at the grant date is measured using a recognised valuation
methodology for the pricing of financial instruments i.e. the Black-Scholes
method. The following expenses have been recognised in the income statement
arising on share-based payments and included within administrative expenses:
Unaudited Unaudited Audited
6 months ended 6 months ended year ended
30 June 30 June 31 December 2023
2024 2023 US$'000
US$'000 US$'000
Share-based payment charge 217 59 310
On 30 June 2024, there were options granted under the ESOS and the New RSP
outstanding over 126,611,000 (31 December 2023: 145,361,000) Ordinary Shares
which are exercisable at prices ranging from Stg 0.60 pence to Stg 1.56 pence
per share and which expire at various dates up to 2029. The weighted average
remaining contractual life of the options outstanding is 3.89 years (31
December 2023: 3.66 years). The average share price for the six months ended
30 June 2024 was Stg1.13pence / €0.0131 (year ended 31 December 2023:
Stg1.15pence / €0.01220).
4. Finance income
Unaudited Unaudited Audited
6 months ended 6 months ended year ended
30 June 30 June 31 December 2023
2024 2023 US$'000
US$'000 US$'000
Foreign exchange gain 18 108 154
18 108 154
5. Finance costs
Unaudited Unaudited Audited
6 months ended 6 months ended year ended
30 June 30 June 31 December 2023
2024 2023 US$'000
US$'000 US$'000
Interest expense - - -
Other finance costs - decommissioning provision interest charge
Foreign exchange loss 76 80 159
- - -
76 80 159
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
for the six months ended 30 June 2024
6. Tax
The Group has not provided any tax charge for the six-month periods ended 30
June 2024 and 30 June 2023. The Group's operating divisions have accumulated
losses which are expected to exceed profits earned by operating entities for
the foreseeable future.
7. Loss per share from continuing activities
The profit or loss per Ordinary Share is calculated using a numerator of the
profit or loss for the financial period and a denominator of the weighted
average number of Ordinary Shares in issue for the financial period. The
diluted profit per Ordinary Share is calculated using a numerator of the
profit for the financial period and a denominator of the weighted average
number of Ordinary Shares outstanding and adjusted for the effect of all
potentially dilutive shares, including share options and share warrants,
assuming that they have been converted.
The calculations for the basic and diluted earnings per share of the financial
periods ended 30 June 2024, 30 June 2023 and the year ended 31 December 2023
are as follows:
Unaudited Unaudited Audited
6 months ended 6 months ended Year
30 June 30 June ended
2024 2023 31 December 2023
Numerator for basic and diluted earnings per share:
Loss for the financial period (US$'000) (1,355) (956) (1,119)
Weighted average number of shares:
Weighted average number of ordinary shares ('000) 4,211,738 4,211,167 4,211,167
Basic and diluted loss per share (US cents) (0.03) (0.02) (0.03)
There is no difference between the basic loss per Ordinary Share and the
diluted loss per Ordinary Share for the financial periods ended 30 June 2024,
30 June 2023 and the year ended 31 December 2023 as all potentially dilutive
Ordinary Shares outstanding were anti-dilutive. There were 195,611,000 share
options in issue at 30 June 2024, 209,611,000 share options in issue at 30
June 2023 and 215,611,000 share options in issue at 31 December 2023.
8. Exploration and evaluation assets
US$'000
Cost
At 1 January 2024 104,876
Additions 219
At 30 June 2024 105,095
Provisions for impairment
At 1 January 2024 66,898
Increase in impairment provision 196
At 30 June 2024 67,094
Net book value
At 30 June 2024 38,001
At 31 December 2023 37,978
The Group does not hold any property, plant and equipment within exploration
and evaluation assets.
The additions to exploration and evaluation assets during the period relate
mainly to own costs capitalised for geological, geophysical and administrative
("GG&A") work and licence maintenance costs, along with training and
licence fees under the respective PSAs, plus an increase in estimates for
decommissioning costs.
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
for the six months ended 30 June 2024
8. Exploration and evaluation assets (continued)
The amount for exploration and evaluation assets represents active exploration
projects. These will ultimately be written off to the Income Statement as
exploration costs if commercial reserves are not established but are carried
forward in the Balance Sheet whilst the determination process is not yet
completed and there are no indications of impairment having regard to the
indicators in IFRS 6.
In accordance with its accounting policies each CGU is evaluated annually for
impairment, with an impairment test required when a change in facts and
circumstances, in particular with regard to the remaining licence terms,
likelihood of renewal, likelihood of further expenditures and ongoing acquired
data for each area, result in an indication of impairment.
Ruvuma PSA
The Ruvuma PSA comprised two exploration licences; Mtwara and Lindi. On 22
October 2020, the Group completed the Ruvuma Farm-Out. On completion, the
Group, through its wholly owned subsidiary, Ndovu Resources Limited,
transferred a 50% interest in, and operatorship of, the Ruvuma PSA to ARA
Petroleum Tanzania Limited ("APT"), a related party of the Group. The Group
now holds a 25% interest in the Ruvuma PSA with a US$35.0 million carry
through to potentially significant volumes of production.
A two-year licence extension, effective from 15 August 2021, was received over
the Mtwara Licence in respect to the Ntorya Location. Although the extension
was over the smaller Ntorya Location area, this was not considered an
indicator of impairment as the area corresponded to the identified Ntorya
asset development programme. During the two-year extension period the operator
was committed to undertake acquiring 200 km(2) of 3D seismic (minimum
expenditure of US$7.0 million), drill the Chikumbi-1 exploration well (minimum
expenditure of US$15.0 million), complete the negotiation of the Gas Terms for
the Ruvuma PSA with the TPDC and, using the data gathered from the Chikumbi-1
exploration and appraisal well and seismic acquisition, prepare and submit an
application for a Development Licence for the Ntorya Location area. Although a
second licence extension was requested in October 2022, this was superceded by
a Development Licence application over the Ntorya gas discovery area submitted
in January 2023. This was granted in May 2024 and therefore no impairment has
been recognised against the Ruvuma PSA.
The Farm-Out secured funding for the next phase of development for the Ruvuma
PSA CGU, for which the Group will be carried for its share up to US$35.0
million, equivalent to US$140.0 million gross field expenditure. The Carry
balance as at 30 June 2024 was US$29.4 million (30 June 2023: US$30.1
million). There is a clear development plan for the asset outlined by the
operator APT, with the support of the JV partners. During 2022, a 338 km(2) 3D
seismic survey was completed and data processing and interpretation was
completed in 2023. In June 2023 a Field Development Plan ("FDP") was approved.
Nyuni Area PSA
Aminex fully provided for the Nyuni Area PSA exploration asset in 2018
following confirmation from the Tanzanian authorities that the Nyuni Licence
period ended in October 2019, coupled with the communication from the Tanzania
Ministry of Energy to withhold all work on the licence, pending a review of
the Nyuni Area PSA. The Company was unable to progress the work programme and,
therefore, the Directors concluded that the carrying cost of the Nyuni asset
should be fully impaired. In April 2022 the Group commenced the process to
hand back the licence to the Ministry. Subsequently, it was agreed with the
Tanzanian authorities that the Group will continue its attempts to attract
industry partners to participate in the licence. The likely outcome of these
attempts however remains uncertain and consequently the Directors maintained
their position of a full impairment over the Nyuni Area PSA CGU. Expenditure
during the year is capitalised and then immediately impaired to the income
statement as impairment against exploration and evaluation assets.
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
for the six months ended 30 June 2024
8. Exploration and evaluation assets (continued)
Kiliwani South
The Kiliwani South CGU, located within the Kiliwani North Development Licence
acreage, was previously identified as a potential lead. The Kiliwani South
prospect was estimated by management to contain a mean 57 BCF un-risked GIIP
and the prospect was reviewed by RPS in their February 2018 CPR.
During 2021, the Group proposed no work programme and allocated no budget
towards the future development of the Kiliwani South CGU. This was due to no
agreement reached with the Ministry of Energy on the work commitments over the
Nyuni Area PSA and the delay to agreeing commercial terms on the Kiliwani
North Development Licence. The Group previously considered any future drilling
on the Licence would be dependent upon improved seismic resolution of the
target structures that would result from the acquisition and interpretation of
a 3D seismic survey, which would only be economic if conducted over both the
KNDL and immediately adjacent areas within the Nyuni Area PSA. In line with
the requirements of IFRS 6 this is an indicator of impairment. The Directors
concluded in 2021 that the carrying value of the Kiliwani South asset should
be fully impaired. Although a budget has been approved for 2024, this is for
licence maintenance and support only, and the Directors concluded that full
impairment should continue in 2023 and 2024. There was however no expenditure
during the period. Any reversal of the impairment would be dependent on an
established development programme for the area, including a seismic and
drilling programme where an assessment of the carrying value of the CGU would
be reviewed.
9. Property, plant and equipment
Development property - Tanzania
Other assets Total
US$'000 US$'000 US$'000
Cost
At 1 January 2024 8,453 88 8,541
Additions in the period 107 - 107
Disposals - - -
Exchange rate adjustment - (1) (1)
At 30 June 2024 8,560 87 8,647
Depreciation and depletion
At 1 January 2024 8,453 84 8,537
Charge for the period - 1 1
Increase in impairment provision 107 - 107
Disposals - - -
Exchange rate adjustment - (1) (1)
At 30 June 2024 8,560 84 8,644
Net book value
At 30 June 2024 - 3 3
At 31 December 2023 - 4 4
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
for the six months ended 30 June 2024
9. Property, plant and equipment (continued)
Development property - Tanzania
Following the award of the Kiliwani North Development Licence ("KNDL") by the
Tanzanian Government in April 2011, the carrying cost relating to the
development licence was reclassified as a development asset under property,
plant and equipment, in line with accounting standards and the Group's
accounting policies. Production from the Kiliwani North-1 well ("KN-1")
commenced on 4 April 2016 and depletion was calculated with reference to the
remaining reserves of 1.94 BCF, which were ascribed to the field as at 1
January 2018 in an independent reserves and resources report prepared by RPS
in February 2018. The report also identified a contingent resource of 30.8 BCF
in addition to the reserves. The well has produced approximately 6.4 BCF of
gas to date. However, production from KN-1 in 2018 was intermittent and there
has been no commercial production from the well since March 2018.
During 2021, although the Group and TPDC reached agreement on the settlement
of past outstanding gas sales and related amounts due to the TPDC, certain
rights were reserved by both parties over areas that remain unresolved related
to commercial terms over production from the area (see Note 13). Any
development of the KNDL requires prior agreement on commercial terms. During
2021, the KN-1 well remained idle, no progress was made with the TPDC on
remediation of the well as discussions continued to focus on commercial terms
over the Licence, and the Group proposed no work programme and allocated no
budget over the KNDL for 2022. The Directors concluded in 2021 that these all
indicated the asset was impaired.
In accordance with IAS 36, the Group conducted an impairment test as at 31
December 2021 on a value-in-use basis. The cash-generating unit for the
purpose of impairment testing is the KN-1 well. The Company uses a financial
model of the forecast discounted cash flow to calculate the assets
value-in-use. However, as key judgements for the 2021 impairment test
concluded no production, the value in use calculation was US$nil.
Consequently, the Directors concluded that the Kiliwani North CGU was fully
impaired as at 31 December 2021. These conditions and assessments have
continued and therefore expenditures incurred during the financial period were
capitalised and immediately impaired.
10. Trade and other receivables
Trade and other receivables amounted to US$1.50 million at the period end (31
December 2023: US$1.59 million). The decrease is comprised mainly of a
reduction in amounts due from joint operations partners of US$0.09 million.
11. Cash and cash equivalents
Unaudited Unaudited Audited
6 months ended 6 months ended year ended
30 June 30 June 31 December 2023
2024 2023 US$'000
US$'000 US$'000
Cash at bank and in hand 1,778 5,036 3,041
Included in cash and cash equivalents is an amount of US$869,000 (31 December
2023: US$1,023,000) held on behalf of partners in jointly controlled
operations.
12. Trade and other payables
Trade and other payables amounted to US$7.82 million at the period end (31
December 2023: US$8.19 million). The decrease related predominantly to
US$0.33 million in payments to the TRA for accrued VAT and WHT included in the
2019-2020 tax assessments and a reduction in amounts due to joint operations
partners of US$0.15 million, offset by an increase of US$0.18 million in
accrued training and licence fee invoices from the Petroleum Upstream
Regulatory Authority in Tanzania. Included in trade and other payables for the
Group are amounts due to partners in joint operations, VAT payable and amounts
arising on gas sales.
The Directors consider that the carrying amounts of trade payables approximate
their fair value.
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
for the six months ended 30 June 2024
13. Commitments, guarantees and contingent liabilities
Commitments
In accordance with the relevant PSAs, Aminex has a commitment to contribute
its share of the following outstanding work programmes:
(a) Following the grant of the first extension to the Nyuni Area PSA,
Tanzania, the terms of the licence require the acquisition of 700 kilometres
of 3D seismic over the deep-water sector of the licence, and the drilling of
four wells, on the continental shelf or in the deep-water, by October 2019.
The Group commenced discussions in 2022 with the Tanzanian authorities to hand
back the Nyuni Area licence which resulted in Aminex being requested to market
the licence in 2023 in an attempt to find a third-party partner willing to
pursue and fund a mutually agreed renegotiated work programme. It is
acknowledged that only part of the seismic acquisition commitment and none of
the drilling commitment under the licence has been undertaken.
(b) The Ruvuma PSA, Tanzania, originally comprised two licences. Two
wells are required to be drilled on the Mtwara Licence, one of which is
expected to be the Chikumbi-1 well. The Mtwara Licence in respect of the
Ntorya Location was extended in August 2021 for two years. Pursuant to that
extension, the joint operations parties are required to acquire 200 km(2) of
3D seismic over the location area, drill the Chikumbi-1 well and conclude
negotiations of the Gas Terms for the Ruvuma PSA. The 3D seismic acquisition
programme was completed on 9 October 2022 and the Addendum to the Ruvuma PSA,
setting out the fiscal terms for the production of gas, was signed by all
parties on 25 November 2022. The Development Licence over the Ntorya gas
discovery area was granted in May 2024.
Guarantees and contingent liabilities
(a) Under the terms of the Addendum to the Ruvuma PSA, Ndovu Resources
Limited, a subsidiary company of Aminex PLC, has provided security to the TPDC
for up to 15% of the profit share of the Kiliwani North Development Licence to
guarantee the amended four-well drilling commitment under the Ruvuma PSA. For
each well drilled the security interest will be reduced by 3% for the first
well and 4% thereafter.
(b) The Company guarantees certain liabilities and commitments of
subsidiary companies from time to time, including the commitments of Ndovu
Resources Limited under the Nyuni Area PSA. Management has assessed the
possible outcomes of these liabilities and commitments in accordance with IFRS
9 and no material losses are expected to arise.
(c) On 11 April 2018, Ndovu Resources Limited received formal
notification from the TPDC of certain claims amounting to US$5.97 million
against the Kiliwani North Development Licence with regard to unpaid royalties
and amounts due under profit share arrangements. The agreed amounts claimed
were offset as part of the settlement agreement signed in October 2021 between
the Group and the TPDC. As part of the settlement agreement, both parties
reserved certain rights including the TPDC reserving its rights in relation to
unpaid royalties and profit share arrangements. Aminex has advised the TPDC
that it does not accept the balance of the claims, which TPDC estimates to be
US$4.18 million (Aminex's net share is equal to US$2.74 million). The Group
has received legal advice in country that supports its position, and this has
been provided to the TPDC. The Directors believe these claims are without
merit and do not consider it appropriate at this stage to provide for these
claims.
(d) In 2022, as part of the share placement agreement with its broker,
Shard Capital Partners LLP ("Shard"), the Company agreed to grant 5,320,666
warrants over new Ordinary Shares to Shard at an exercise price of
Stg1.125pence per Ordinary Share ("Warrants"). It was agreed between the
Company and Shard that the Warrants would not be issued until requested by
Shard. No such request has been received by the Company to date and so the
Warrants have not yet been granted to Shard.
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
for the six months ended 30 June 2024
13. Commitments, guarantees and contingent liabilities (continued)
Tanzanian Tax Assessments
On 28 February 2020, following the conclusion of the TRA audit of Ndovu
Resources Limited ("NRL"), the Group's Tanzanian wholly owned subsidiary, for
taxation years 2013 to 2015, the TRA issued tax assessments in respect of
these taxation years. The following matters were raised in the assessments:
Principal Interest Total
US$'000 US$'000 US$'000
Area
Withholding tax Withholding tax on payments made to non-residents for services performed 242 182 424
outside of Tanzania
VAT Output VAT on imported services 191 156 347
Withholding tax Withholding tax on deemed interest 797 664 1,461
1,230 1,002 2,232
On 3 June 2022, following the conclusion of the TRA audit of NRL for taxation
years 2016 to 2018, the TRA issued tax assessments in respect of these
taxation years. The following material matters were raised in the assessments:
Principal Interest Total
US$'000 US$'000 US$'000
Area
VAT VAT on Ruvuma Farm-Out 1,221 233 1,454
Pay As You Earn (PAYE) PAYE on Director's fees 92 45 137
1,313 278 1,591
On 28 June 2022, following the conclusion of the TRA corporate income tax
audit of NRL for taxation years 2016 to 2018, the TRA issued tax assessments
in respect of these taxation years. The following matters were raised in the
assessments:
Principal Interest Total
US$'000 US$'000 US$'000
Area
Corporate tax Under declaration of revenue for 2016 365 145 510
Corporate tax Under declaration of revenue for 2017 1,438 394 1,832
Corporate tax Under declaration of revenue for 2018 772 143 915
2,575 682 3,257
NRL considers all the above claims to be without technical merit in tax law
and with the assistance of an in-country tax advisor, has submitted objections
to the assessments. At this stage it is unclear if these objections will be
successful and therefore the amount or timing of potential cash outflow
remains uncertain. Provision has been made for amounts NRL has ceded or where
management determine the likelihood of success through the objection or
appeals process is unlikely. There have been no developments on the above
claims in 2024.
On 20 June 2023, following the conclusion of the TRA corporate income and
other taxes audits of NRL for taxation years 2019 and 2020, the TRA issued tax
assessments in respect of these taxation years. The corporate income tax
assessments covered disallowance of costs, totalling US$760,000 for the two
years, with no amounts due. The following material matters were raised in the
assessments of other taxes:
Principal Interest Total
US$'000 US$'000 US$'000
Area
Withholding tax WHT accrued not paid 1,062 181 1,243
Withholding tax WHT on foreign services 357 57 414
VAT VAT accrued not paid 358 - 358
VAT VAT accrued not paid (Gas Sales Agreement) 920 - 920
Excise Duty ED accrued not paid (Gas Sales Agreement) 297 - 297
2,994 238 3,232
Aminex PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
for the six months ended 30 June 2024
13. Commitments, guarantees and contingent liabilities (continued)
The majority of these amounts were already accrued in the accounts of NRL.
Objections were filed in July 2023 to some of the amounts but delays in
receiving replies from the TRA led to the TRA rejecting these and eventually
imposing an Instalment Plan ("IP") for monthly payments from October 2023 to
October 2024 for 100% of the assessment amounts. Four payments were made up to
January 2024 (US$ 1.10 million had been paid by 31 December 2023). In June
2024, a revised IP was agreed with monthly payments up to December 2025. In
addition, NRL is currently formulating its response to the rejection of its
filed objections. At this stage it is unclear whether NRL will be successful
in its objections and therefore the amount or timing of potential cash outflow
remains uncertain. Provision had been made at 31 December 2023 for interest on
non-objected amounts, but all unpaid interest was subsequently waived by the
TRA in June 2024 and the provisions released.
The claims detailed above total US$10.31 million, of which US$1.44 million has
been paid and US$2.38 million has been accrued or provided for. Amounts
accrued or provided for are included in Trade and other payables within WHT
payable, VAT payable and Other payables.
14. Related party transactions
There have been no material changes in the related party transactions
affecting the financial position or the performance of the Group in the period
since publication of the 2023 Annual Report.
15. Post balance sheet events
There are no post balance sheet events to report.
16. Statutory information
The financial information to 30 June 2024 and 30 June 2023 is unaudited and
does not constitute statutory financial information. The information given
for the year ended 31 December 2023 does not constitute the statutory accounts
within the meaning of Part 6, Chapter 4 of the Companies Act 2014. The
statutory accounts for the year ended 31 December 2023 have been filed with
the Companies Registration Office in Ireland. This announcement will be made
available at the Company's registered office at Paramount Court, Corrig Road,
Sandyford Business Park, Dublin 18 and at the office of Aminex's UK subsidiary
company, Aminex Petroleum Services Ltd., at 20-22 Wenlock Road, London, N1
7GU.
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