animex announcement, page-5

TANZANIA - Nyuni PSA and Kiliwani North Appraisal Licence



Following successful testing of the Kiliwani North-1 gas discovery in 2008 (40 MMcfd from Lower Cretaceous sandstones), a two year Appraisal Licence was granted by the Tanzanian Government. Analysis of the well test data confirmed the excellent production characteristics of the Neocomian reservoir. A key element of the appraisal programme was the acquisition of 48 line kilometres of land and transition zone seismic over Kiliwani North in July 2009. This was the first land seismic ever acquired on Songo-Songo Island and the resulting high quality processed data has made a strong contribution to our understanding of the Kiliwani North structure.



Various options to commercialise Kiliwani North gas have been and are being studied but, given its proximity to the Songas Plant which is only 3kms from the Kiliwani North-1 wellhead, this remains the obvious choice. However, in order to be able to access the Songas pipeline system which delivers gas from the Songo-Songo gas field to market in Dar es Salaam, the gas handling plant at Songo-Songo needs to be expanded and there has been a planning consent deadlock for some time between the plant operator and the government authorities. Aminex now believes that a positive outcome will soon be achieved in near time and that the expansion of both plant and pipeline will be more than adequate for Nyuni's needs. Aminex also believes that the expanding gas market in Dar es Salaam will be more than capable of accepting the additional production.



The remainder of the Nyuni Licence is held as an exploration area under the second extension of the PSA with a further work programme commitment. Previously acquired seismic has now been reprocessed and reinterpreted, then integrated with the new seismic acquired over Songo-Songo Island. The new mapping, which has been independently assessed, has considerably upgraded the sizes of the main prospects and provides us with a much better understanding of the geological potential of the licence as well as allowing prospects to be mapped with a far greater level of confidence than previously.



Contingent resources at Kiliwani North and prospective resources on the exploration prospects have been evaluated by Isis Petroleum Consultants Pty. Ltd. ("Isis") and their conclusions are tabulated below. It should be noted that Isis is attributing some "contingent" as well as "prospective" resources to the Nyuni prospects which lie close to Nyuni Island. This results from their review of the Nyuni-1 well drilled by Aminex and partners at Nyuni Island in 2003/4. Nyuni-1 recorded several gas-bearing intervals in Aptian/Albian sands but operational difficulties at the time meant that these were never tested and the well was subsequently suspended, although not plugged and abandoned in case re-entry was ever required. Isis therefore attributes the same resource category to these Nyuni-1 reservoirs as to the successfully-tested discovery at Kiliwani North.



Unexplored prospects at Fanjove Island, Songo-Songo South and elsewhere on the licence have not yet been fully evaluated. However Aminex initially concludes that the prospect in and around Nyuni Island offer the best potential for further exploration drilling.



In September 2009, Aminex reached an agreement with East Africa Exploration Limited (EAX) under which EAX assigned its 10% interest in the Nyuni PSA, including the Kiliwani North discovery, to Aminex in exchange for Aminex's 25% interest in Kenya blocks L17/L18 Licence in which EAX was already a partner. In addition to swapping acreage, Aminex made a cash payment to EAX of $1 million. For Aminex this represents a 25% increase in its holding in Nyuni, consolidating our overall position in Tanzania where we are a well established operator, as well as a favourable exit from Kenya where we had concluded that exploration was relatively more high-risk and long-term than the acreage at Nyuni.



With a firm timetable for plant expansion and pipeline capacity increase now more likely, Kiliwani North reserves now established and further drillable prospects - now well-defined - which could tap into much larger gas reserves and feed into a hub at Songo-Songo, all the ingredients are falling into place for development of a gas business based on the Nyuni PSA.

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