re: Ann: Nyuni 2 Well - Progress Update and K... UK view of...

re: Ann: Nyuni 2 Well - Progress Update and K... UK view of Nyuni-2 prospects:

Analysts at Shore Capital were unfazed by this morning?s update from Aminex (LON:AEX) in which the explorer revealed a minor delay to its drill programme in Tanzania.

The company told investors that it will have to side-track the Nyuni-2 well because of a blockage caused by a build up of debris.

While Nyuni-2 is targeting an offshore target it is actually being drilled on dry land, on a small Island 35 kilometres off the Tanzania coast. The technically challenging well is being drilled at a 29 degree angle. It was planned with a total vertical depth of 2,964 metres to target a location 1,200 metres from the island.

This morning Aminex said that after ?successfully mastering? the most difficult part of the drilling work debris from a damaged wireline logging tool prevented any further progress.

It now plans to pull back to around 3,000 metres, above the area of blockage, to side-track the well and by-pass the obstruction. Drilling will resume after the preparations are made for the sidetrack, which is expected to take several days.

Shore Capital analyst Craig Howie said he is looking forward to the well result, which he is now expecting later this month.

?The well continues to target the same bottom-hole location, and is already quite close to total depth,? Howie said.

?We are therefore comfortable with today?s news, and look forward to a result from Nyuni-2 later this month.?

Howie also highlighted that an equipment order, for the pipe that?s needed to tie in the Kiliwani North discovery to nearby production facilities, was a positive to take from the update.

Once the Nyuni-2 well has been drilled the rig will be moved back to the mainland, to the Ruvuma basin, where it will drill the Aminex-operated Ntorya-1 exploration well - in its joint venture project with Tullow Oil (LON:TLW) and Solo Oil (LON:SOLO).

The group has recently expanded its interests in Tanzania through a number of corporate deals.

Most recently, on Tuesday, it revealed an acreage swap deal that increased its stake in the Nyuni PSA. To gain an additional 5 per cent interest in the Nyuni PSA Aminex has agreed to relinquish a 50 per cent stake in the West Songo-Songo PSA, which is a non-operated joint venture that has endured slow progress and is currently behind schedule.

The company explained that the future of the West Songo-Songo PSA is uncertain, while the Nyuni acreage is actually set to expand.

The asset swap followed last week?s deal with Tullow Oil (LON:TLW), which saw Aminex gain an additional 18.75 per cent stake in another of its Tanzanian assets, the Ruvuma Basin PSA. As part of the agreement Aminex also became the operator of the PSA.

The Nyuni area itself is also expanding. In fact the 'Nyuni Area PSA' will replace the existing 'Nyuni-East Songo-Songo PSA', which is operated by Aminex.

?The Nyuni Area PSA will be materially larger than the earlier one and will comprise 4 additional blocks directly to the north, as well as the area covered by the existing Nyuni-East Songo-Songo PSA,? Aminex explained on Tuesday.

As Aminex has previously announced, the new Nyuni Area PSA has already been initialled by both Aminex and the Tanzanian authorities and will be formally signed-off by the Minister of Energy and Minerals at an appropriate time.
?Aminex considers that the new acreage included in the Nyuni Area PSA will provide greater scope for establishing a new play fairway on the continental shelf which could share similarities to some of the recent deep water drilling successes,? the company added.