Shares in oil and gas company Aminex rocketed 31 per cent on Wednesday afternoon after the company signed an agreement which will accelerate development of its principal asset while substantially reducing risks.
The Dublin-incorporated explorer, which is listed on both the Irish and London stock exchanges, signed a farm out agreement related to its flagship Ntorya project in Tanzania which will see it receive a cash payment of $5 million (€4.25 million) in two tranches.
The agreement with Zubair Corporation will see the Oman industrial conglomerate create a company to operate the asset. That new company, ARA Petroleum Tanzania, will be an affiliate of one of Aminex's largest shareholder, Eclipse Investments LLC.
Both Eclipse and Zubair hold 28.62 per cent of the issued share capital of Aminex.
Aminex expects this farm out to elevate the asset to a minimum gross production rate of 40 million cubic feet per day. ARA will cover costs up to $35 million as it targets the 40 million rate. However, if that rate is achieved prior to costs reaching $35 million Aminex will be paid the difference. If costs exceed $35 million before the target is reached, Aminex will be liable for the surplus.
