This deal is the best outcome for both EAE and for Aminex.EAE...

This deal is the best outcome for both EAE and for Aminex.

EAE now have 65% control of L17 and L18. Their aim, obviously with the aid of the $1 million, is to complete the seismic on both blocks this year with the aim of drilling in late 2010 or early 2011. They now have the capacity to farmout for a free carry and still retain a good size holding.

The Mombasa oil refinery, which imports its crude, is close by and would be a ready market for any oil found.

Rough estimates are that between these two leases, and another couple also in Kenya, they have a possibility of over 1 billion barrels of oil and over 600mcf of gas.

To remain in the Nyuni joint venture would have sucked money out of them in the near term with no solid return until new processing is constructed at Songo Songo and possibly a new pipeline is built to Dar es Salaam. If this happened they would have put the Kenya licences at risk due to lack of money, and then still have to farmout for an even smaller return on L17 an L18.

For Aminex this deal helps them to consolidate their holdings. Between Nyuni, Ruvuma, USA, Egypt and Kenya they had spread themselves too thinly with all requiring money spent in the near future.

With this deal Aminex have increased their interest in the whole Nyuni block which will help development, especially if EAE had no funds to go towards the extra drilling that is coming up in the future. EAE could possibly have even been having trouble contributing to their share of the current seismic expenses. This extra 10% of Nyuni will be a lot easier to handle than having to fork out for seismic at L17 and L18 and then still have to farm down to about 10% of that block anyway.

Overall a good win/win situation for both companies.