Aminex said it was reorganising its Egyptian interests, converting its carried interest in a well in the area into an overriding royalty position.

The company has an indirect 10 per cent interest in the West Esh el Mellahah-2 production sharing contract, through a 12.5 per cent stake it owns in Aminex Petroleum Egypt Ltd (Apel). Under the proposed deal, the firm will sell its stake in Apel to PetroSino for a nominal sum, along with the carried interest, and in return it will get a 1 per cent overriding royalty from PetroSino on the the full sales value of its share of production from a discovery well on theWEEM-2 concession , once PetroSino has recovered its $2.5 million drilling costs.

The company said the plan would optimise its commercial interest in the discovery. It has no operational control over the well, and if production was established, Aminex would have to meet ongoing licence costs and repay its frr-carry before it could get its share of production revenues.

Apel will also change its name to something unrelated to the Aminex brand.

Aminex chief executive Jay Bhattacherjee said the reorganisation was the best opportunity to achieve revenues from the WEEM-2 concession, with no exposure to further development capital.