Equities Research Initiation of coverage 15 November 2010

No recommendation+
Price 8.1p
Aminex
Oil & Gas
United Kingdom US production with Tanzanian upside
FTSE All Share 2990
Reuters/Bloomberg AEX Aminex recently reported strong flow rates from its OM10-1 well onshore
No. of shares in issue (m) 454.0 Louisiana, although these were not enough to kick-start the shares, which
have more than halved from a 17p high earlier in 2010. The company has
Market Cap (£m) 36.8
announced a placing raising £1.7m (net) at a 7.5p issue price, ahead of a
Estimated Net Cash (£m) 2.7 multi-well programme planned for next year, which will include a second,
Enterprise Value (£m) 34.1 high-impact well at Ruvuma. This project is operated by Tullow in the same
Website www.aminex-plc.com basin as the Anadarko/Cove joint venture’s recent discoveries offshore
Mozambique. We expect a recovery in US production, and are forecasting
Core NAV (p/share) 12
revenues of $17.4m in FY2011. In the meantime, we estimate that the shares
are trading at 0.3x total NAV, providing a highly attractive entry-point, even
Total NAV (p/share) 26 allowing for future dilution as Aminex funds its 2011 drilling programme.
Price/Total NAV (x) 0.3

Next update Tanzanian excitement: Aminex has a diverse asset portfolio although we
Q3 IMS November 2010 believe that Tanzania could provide the most powerful share price catalysts. An
exploration well is planned at Nyuni in the first quarter of 2011 and, if successful,
Performance 1M 3M 12M could be tied into the existing discovery at Kiliwani North. Drilling of a follow-up
Absolute (%) (6) (11) (2)
exploration well at Ruvuma is planned for late 2011, in the same basin as recent
discoveries by the Anadarko/Cove joint venture offshore Mozambique.
Rel Index (%) (10) (22) (2)
Relative to FTSE Oil & Gas Index Strong recovery in US production expected: Aminex recently reported flow
rates of 500boepd from OM10-1 at Shoats Creek, where two more deep wells are
planned for 2011. Recompletion of SE-2 in the second quarter should reverse
production declines at Alta Loma, helping to deliver total attributable production of
251mboe in FY2011, compared with the 94mboe we are forecasting this year. In
Tanzania, Kiliwani North could be producing commercially in 2012.
Research analyst
Craig Howie Trading at a substantial discount to risked NAV: We have calculated total NAV
0151 600 3703 of 26p per share, with core NAV of 12p per share and risked upside of a further
14p per share. Even allowing for potential future dilution, a current price/NAV ratio
of 0.3x looks too low, and we believe that the shares enjoy the potential to regain
lost ground as drilling catalysts and increased production emerge through 2011. In
the meantime, there is strong valuation support at current levels, we believe.
Conflicts of interest:
+ This is a non-independent marketing Results and Forecasts
communication. The analyst who has
prepared this report is aware that Shore Year to Turnover PBT EPS DPS Net Cash PER EV/EBITDA Div Yield
Capital Stockbrokers and/or another December ($m) ($m) (c) (c) ($m) (x) (x) (%)
member of the Shore Capital Group has a 2008A 10.2 (9.7) (0.6) - 3.9 n/a n/a n/a
relationship with the company covered in 2009A 7.9 (2.9) (0.9) - 11.6 n/a n/a n/a
this report. Accordingly, it has not been 2010F 7.4 (3.3) (0.8) - 2.2 n/a n/a n/a
prepared in accordance with legal
2011F 17.4 2.2 0.5 - (18.2) 28.8 9.7 n/a
requirements designed to promote the
independence of investment research and Source: Aminex, Shore Capital Stockbrokers
is not subject to any prohibition on dealing
ahead of the dissemination of investment
research.
Disclosures of potential conflicts of interest as required by regulatory
Shore Capital Stockbrokers Limited acts as
Joint Broker to Aminex.
bodies are shown on page 19.
15 November 2010
We have taken an ‘NPV plus risked
exploration upside’ approach
Core NAV of 12p/share provides
strong valuation support
14p/share of risked upside at Nyuni
and Ruvuma
Perceived funding risks already
factored in
AMINEX
Trading at a discount to core and risked NAV
Our sum-of-the-parts valuation includes net present values (NPVs) for Aminex’s production
and development assets in the United States. NPVs are derived from independent
evaluations completed by consultants Sojen, and have been calculated using a 10%
discount rate. In the case of Shoats Creek, where further development drilling is planned, we
have applied a 90% probability of success to reflect project development risk.
We think that this is appropriate given the likelihood of a reserves upgrade following good
results from the two wells drilled earlier this year. We have excluded the Somerset field from
our valuation given its high operating costs and minimal NPV.
We have applied a multiple of 1x 2010F revenues to derive a value for the Amossco oilfield
services business, and made adjustments reflecting the present value of central costs and
for net cash. This results in core NAV of 12p per share, implying that Aminex trades at a
33% discount to the fair value of its existing and near-term production, and providing strong
valuation support, in our view.
Our valuation also takes into account exploration and appraisal potential by calculating
risked values for Nyuni (including the Kiliwani North discovery) and Ruvuma. The former has
been subject to volumetric studies by Isis Petroleum Consultants, with prospective and
contingent resources totalling 1.6tcf (we assume a conservative 60% recovery factor).
We assume that the second well at Ruvuma targets 100mmboe (the Likonde prospect
drilled earlier this year was estimated to have upside resource potential of 153mmboe). We
have taken these resource estimates and used an ‘in ground’ value of $5/boe with
probabilities of success ranging from 10% to 30%.
This approach gives risked exploration upside of a further 14p per share, implying total NAV
of 26p. This figure excludes West Songo-Songo, an earlier stage project operated by Key
Petroleum, as well as Egypt and North Korea, which provide further potential. With the
shares currently trading at a 69% discount to total NAV, we see lots of upside on a fully
risked basis.
Aminex’s share price has arguably been held back by perceived funding risks associated
with heavy capital spend, which we estimate at $31.5m through the 2011 year-end, and this
is worthy of comment from a valuation perspective. The placing announced today will secure
long lead items for the next well in Tanzania, although Aminex will need additional financing
to cover its activities at Nyuni, Ruvuma and Shoats Creek. The company has several
available options including a farm-out at Nyuni and reserves-based lending facility in the US.
We believe that a 30% discount to total NAV is adequate to reflect potential future dilution at
the asset or corporate level, implying that an 18p share price remains achievable at the
current stage, giving 122% potential upside from current levels.
2
15 November 2010 AMINEX

High impact drilling should provide
catalysts
Following an excellent test result from the OM10-1 well, we expect future activity in the US
to include recompletion of Sunny Ernst-2 at Alta Loma, and drilling of two more deep Wilcox
wells at Shoats Creek as part of Aminex’s unitisation agreement with El Paso Corporation.
However, the highest impact events are likely to come with further drilling at Nyuni and
Ruvuma, which could provide catalysts with important implications for valuation.

Fig 1: Aminex sum-of-the-parts valuation

Unrisked CoS Risked Unrisked Risked Risked
US$m % US$m US$/share US$/share GBP/share
Alta Loma 26.5 100 26.5 0.06 0.06 0.03
Shoats Creek 95.4 90 85.9 0.20 0.18 0.11
S. Weslaco 4.0 100 4.0 0.01 0.01 0.01
Oil services 2.5 100 2.5 0.01 0.01 0.00
Net cash 2.2 100 2.2 0.00 0.00 0.00
G&A (30.8) 100 (30.8) (0.06) (0.06) (0.04)
Core NAV 99.8 - 90.3 0.21 0.19 0.12
Nyuni appraisal 71.9 30 21.6 0.15 0.04 0.03
Nyuni exploration 338.5 20 67.7 0.70 0.14 0.09
Ruvuma 187.5 10 18.8 0.39 0.04 0.02
Total NAV 697.7 - 198.3 1.45 0.41 0.26
Source: Shore Capital Stockbrokers, independent reporting engineers

3
15 November 2010
Tullow-operated onshore block
2-D seismic has enabled
identification of large, drillable
prospects
AMINEX
Exciting times in the Ruvuma basin
The Tullow-operated (TLW, no recommendation at 1236p) Ruvuma licence, covering
12,000km2 on Tanzania’s southern border with Mozambique, is primarily onshore but
adjacent to the Mnazi Bay gas field operated by Maurel & Prom in shallow coastal waters.
Other operators have been active on the Mozambique side of the basin, including Anadarko
which, with Cove Energy (COV, no recommendation at 84p), has recently drilled its fourth
offshore well in a six well programme. Tullow, with partners Aminex and Solo (SOLO, no
recommendation at 0.4p), holds the principal onshore acreage north of the border in
Tanzania. Aminex has a 37.5% working interest.
Fig 2: Ruvuma location map
Source: Aminex
Since award of the PSA in 2005, 370km of offshore and 430km of onshore 2-D seismic data
have been acquired. Following the completion of interpretation work, four large onshore
prospects were identified with P50 resources of 50mmbbl and/or 300bcf estimated in each.
From these, two drilling locations were selected, with a first well (Mikindani-1) scheduled for
spudding in late 2009.
4
15 November 2010
Likonde-1 targeted multiple
reservoirs
Hydrocarbon shows and potential
reservoir thickness provide
encouragement
Evidence of a working petroleum
system
Follow-up well scheduled for late
2011
Strong relationship with authorities
has provided flexibility
AMINEX
However, detailed reprocessing work by Tullow led to the selection of a new, more
prospective well location; Likonde-1 spudded in the New Year, targeting multiple reservoirs
including Tertiary and Cretaceous intervals, to a planned total vertical depth of 3,200m. Like
Mikindani, this was primarily an oil prospect, with upside resource potential estimated at
153mmboe and an estimated one in four chance of success.
Results from Likonde-1 were reported in early April after a powerful gas influx halted drilling
at an extended total depth of 3,650m. Results from drilling, logging and coring showed that
the well had intersected two sandstone intervals with a combined thickness of over 820 feet
(250m) and evidence of residual oil and gas. High gas readings were recorded through most
of the well bore with drill cuttings and sidewall cores providing evidence of crude oil.
Although Likonde-1 was not a commercial discovery (and has since been plugged and
abandoned), the hydrocarbon shows and potential net reservoir thickness provide lots of
encouragement ahead of drilling of a second well. Residual hydrocarbons demonstrate that
there is a working petroleum system in the Ruvuma basin although the oil appears to have
leaked beyond the cap rock overlaying the reservoir. The priority therefore is to find a
structure with an effective trapping mechanism.
Likonde-1 provides a wealth of new data and Tullow is undertaking detailed technical work
ahead of selection of the next drilling location. Importantly, recent well data can now be
integrated for the first time with existing seismic lines. We understand that evaluation work is
well advanced and that, although the next drilling location is to be confirmed following a
recent joint venture meeting in South Africa, a follow-up well is currently scheduled for the
fourth quarter of 2011 at an estimated cost of US$14m (100%).
The Ruvuma PSA originally required drilling to commence by October 2009, although
extensions were subsequently granted to give the partners additional flexibility. Two
commitment wells still form part of the current exploration period; this will expire in late 2011
and, with the second well now scheduled for spudding at around this time, it is critical that
the partners manage any slippage to ensure the continued support of the Tanzanian
authorities. We think that it should be possible to obtain further extensions if necessary,
given the JV’s planned investment and strong working relationship with the local ministry.
5
15 November 2010
Basin has been subject of intense
industry interest
Anadarko and Cove have enjoyed
high rates of drilling success
Ironclad well provides documented
evidence of liquid hydrocarbons
Anadarko has drilled just one
recent well in the onshore portion
Potential for oil has been
established
Significant unrisked potential for
Aminex
AMINEX
Read-across from Anadarko and Cove
The Ruvuma PSA remains a high-risk, high-reward exploration opportunity although the
wider Ruvuma basin has been the subject of intense industry interest, particularly offshore.
ExxonMobil and BG (BG, no recommendation at 1254p) have separately farmed into
offshore blocks on the Tanzanian side whilst Anadarko is undertaking a major drilling
programme over the border in Mozambique. Anadarko’s partner Cove recently raised
£110m via a placing, primarily to fund its activities offshore Mozambique.
Discoveries to date on the East African margin have previously been limited to gas,
including Anadarko’s Windjammer discovery earlier this year. The Windjammer exploration
wildcat was the first of a continuous six well offshore programme, with 555 feet of net gas
pay reported in March 2010. This was followed by the Collier well, which was suspended
above the predicted reservoir objective due to operational problems, and Ironclad, which
encountered 125 feet of net oil and gas pay (albeit with poor reservoir quality). A fourth well,
Barquentine, was recently drilled and declared a discovery, encountering (like Windjammer)
substantial gas pay with excellent reservoir quality. The drill ship has since moved off
location and commenced drilling of the penultimate well, Lagosta-1.
Cove Energy has stated that, with the Windjammer/Barquentine discoveries, it has found a
multi-TCF gas resource. However, we think that Ironclad brings a particularly important
read-across to Aminex, as it provides the first documented occurrence of liquid
hydrocarbons in deepwater East Africa. In addition, it proves that there are working
petroleum systems extending across the basin, north to south, in Mozambican waters.
The read-across from the basin onshore Mozambique is perhaps less compelling although,
to be fair, just one well has been drilled in recent years (Mecupa-1 by Anadarko in late
2009). The Mecupa-1 well encountered good reservoir sands with hydrocarbon shows at
various intervals, but was not a commercial discovery and consequently plugged and
abandoned. With the Phase 1 exploration commitment now fulfilled, a technical evaluation is
underway to help formulate a Phase 2 work programme by January 2011.
Analysis of seismic data had already resulted in a number of onshore leads being identified
by Anadarko, including oil and gas plays. Although Andarko’s exploration programme is gas-
focused, mean prospective resources in the Tertiary oil plays of 104mmboe seem consistent
with volumetric estimates on the Tanzanian side. Oil seeps have also been identified
onshore while, over the border in Tanzania, the wells at the Mnazi Bay gas field have
reportedly also produced small quantities of oil with several possible source rocks identified.
With oil encountered at Ironclad, and evidence of residual hydrocarbons at Likonde-1, we
are enthusiastic about the potential here.
Aminex’s interest in the Ruvuma project currently accounts for just 2p per share in our risked
NAV calculation, reflecting the aggressive 10% risk factor we have applied. However, this
translates into almost 25p per share on an unrisked basis, indicating that commercial
success would be a real company-maker.
6
15 November 2010 AMINEX

Nyuni drilling ahead of first gas in 2012

Aminex’s third Tanzanian well Also known as Kiliwani North, the Aminex-operated Nyuni appraisal area was carved out of
(KN-1) was a commercial discovery the existing Nyuni exploration licence (Aminex 50%) following drilling of the KN-1 well on
Songo-Songo Island. This was Aminex’s third Tanzanian well and declared a commercial
discovery, testing at a flow rate of 40mmcfd (6,900boepd) in June 2008. Kiliwani North is
adjacent to the producing Songo-Songo gas field in an area of shallow reefs and islands,
with drilling carried out using small islands as drilling pads. KN-1 intersected a 60m gross
gas column and, following testing, was completed and suspended for future production.

1.6tcf of resource potential A new 2-D seismic survey has since been completed over an area on and around Songo-
identified at Nyuni Songo Island, acquiring additional data to determine the areal extent of the field. Following
processing and interpretation, Isis Petroleum Consultants estimates contingent resources of
45bcf at Kiliwani North, with 1.5tcf of additional potential across the wider Nyuni block.

Detailed engineering plans finally
submitted with first gas expected in
2012
Expansion of the gas treatment plant required to bring Kiliwani North on-stream has been
held up for the past two years due to a dispute between the Tanzanian regulator and
pipeline operator Songas. However, Aminex reports that these issues have now been
resolved, with detailed engineering plans submitted for final approval. Although the final
timetable is to be confirmed by Songas, Aminex estimates that first gas will be delivered into
the pipeline from Kiliwani North in the first half of 2012, at an initial flow rate of 20mmcfd.

Proximity to existing infrastructure
is a real bonus
Timing is perhaps still subject to some uncertainty, but visibility has improved following
submission of the field development plan for government approval. We like Kiliwani North
because of its simplicity as a single well development and proximity to existing infrastructure
on Songo-Songo Island. The project is 2.5km overland from the existing Songas treatment
facility, with a common user pipeline taking gas to shore and onwards to Dar es Salaam.
Gas from successful step-out wells could be readily tied into the existing facilities, and KN-1
should make a material contribution once on-stream. Ahead of this, we estimate that
Aminex’s share of the plant expansion will cost a modest $1.8m in 2011.

Fig 3: Nyuni contingent and prospective resources

Major Structural Prospects PMean unrisked GIIP
Prospect Neocomian Aptian/ Albian Total
Gas Gas Gas Gas Gas Gas
(bcf) (mmboe) (bcf) (mmboe) (bcf) (mmboe)
Kiliwani N. 45 8 0 0 45 8
Nyuni Contingent 0 0 233 40 233 40
Nyuni Prospective 1,309 226 0 0 1,309 226
Okuza 640 110 222 38 862 149
Fanjove N. 254 44 40 7 294 51
Fanjove S. 62 11 21 4 83 14
Total 2,310 398 516 89 2,826 487
Source: Isis Petroleum Consultants

7
15 November 2010
Aptian/Albian levels provide
additional potential
Nyuni-2 will give Aminex its first
high impact well for next year
AMINEX
In addition to the potential for commercial production from Kiliwani North in 2012, the
technical work undertaken by Isis reinforces previous evaluations of reserve upside in the
wider Nyuni block. The Nyuni-1 well drilled by Aminex in 2003-4 encountered gas shows
during drilling, but was not tested due to mechanical problems. However, downhole logging
data has given Isis sufficient confidence to attribute a 233bcf contingent resource to Nyuni at
the Aptian/Albian level, which lies above the Neocomian reservoir successfully tested by
KN-1. The Neocomian interval still represents the primary reservoir objective, accounting for
over 80% of total contingent and prospective resources. However, the presence of gas in
the Aptian/Albian provides additional potential upside.
Nyuni-1 was drilled on Nyuni Island, which lies approximately 16km to the north-east of the
pipeline terminal on Songo-Songo Island. A follow-up exploration well (Nyuni-2) is now
planned for the first quarter of 2011, giving Aminex its first high-impact well for next year.
This will target the Nyuni East structure, using the same drilling pad as the previous well, at
an estimated cost of $15m (100%).
Technically, Aminex is obligated to drill a further well on the Nyuni block in 2011, with Nyuni
West being a possible target. However, the Tanzanian authorities have indicated their
willingness to negotiate a completely new PSA ahead of further drilling, and we expect the
second well to fall into this. History suggests that Aminex will be able to agree a new
timetable for the second well, and we therefore assume just one new well on Nyuni during
our forecast period.
8
15 November 2010
US portfolio generates revenues
and underpins valuation
Declines at Alta Loma have
impacted production this year
SE-2 recompletion should ensure
recovery in well productivity
Two successful wells drilled at
Shoats Creek
Strong increase in FY2011
production forecast
AMINEX
US production underpins valuation
Tanzania may provide lots of excitement, but we believe that the presence of a portfolio of
producing oil and gas projects in the US is an underappreciated part of the Aminex
investment story. In addition to the US providing revenues to help cover the company’s
central costs, our valuation work indicates that existing 2P reserves underpin value in their
own right, giving core NAV of 12p per share and effectively throwing in Tanzania for free.
Aminex has four projects onshore US, although Alta Loma in Texas and Shoats Creek in
Louisiana are, in our opinion, the most material of these. Alta Loma, which is operated by El
Paso Corporation and where Aminex has a 37.5% working interest, contributed the lion’s
share of production in FY2009, with 80,000boe produced from the field (net to Aminex).
However, production from the existing Sunny Ernst-2 well (drilled in 2008) has since fallen
due to natural declines in the Upper Andrau formation, as illustrated by the interim results
and our forecasts, which see under 40,000boe produced from Alta Loma in the current
financial year.
This production decline adversely affected first half revenues, which fell by a third year-on-
year to $2.6m, and the operator is planning to recomplete Sunny Ernst-2 to bring a new
interval (the ‘S’ sand) on-stream, which should get production back up to historical rates
(initially over 1,300boepd gross). The SE-2 recompletion is scheduled for the second quarter
of next year, at an estimated cost to Aminex of around $400,000. A relatively small
investment should therefore make a material difference to production from this field in the
short term, with an additional well (Sunny Ernst-3) anticipated in 2012.
Also yet to be reflected in Aminex’s reported numbers is its success at its second key project
in the US, Shoats Creek in Louisiana, where the company is operator with a 100% working
interest. This was a mature field, with one shallow well producing just 20bopd. However, the
OM-1 appraisal well drilled in the first half of this year changed this position, having
successfully tested at 504bopd from one zone in the Cockfield Sands, with stabilised
production rates of 120-150bopd expected going forward.
Aminex also entered into a unitisation agreement with its neighbour at Shoats Creek, El
Paso Corporation, whereby the partners would drill on a 50:50 basis, targeting the deeper
Wilcox play in an area spanning the acreage of both companies. The first exploration well,
OM10-1, has been a resounding success, relying on high quality 3-D seismic and recently
testing at 500boepd from five zones. Although production testing is continuing, commercial
oil and gas production could exceed these levels, with two more development wells planned
for next year. Taking into account recovering well productivity at Alta Loma, and the
contribution of new wells at Shoats Creek, we are forecasting a 165% year-on-year uplift in
total attributable production to 251,000boe in FY2011.
9
15 November 2010 AMINEX

Fig 4: Aminex US reserves at 31 December 2009

Asset Working Reserves Net Oil Net Gas Net Oil NPV10 (net)
Interest (%) Category (mmbbl) (bcf) Equivalent ($m)
(mmboe)
1P 0.1 3.9 0.8 22.4
Alta Loma 37.5
2P 0.2 4.8 1.0 26.5
Shoats 1P 0.0 0.2 0.1 1.0
100
Creek 2P 1.7 16.7 4.5 95.4
1P 0.0 1.3 0.2 3.5
S. Weslaco 25
2P 0.0 1.6 0.3 4.0
Somerset 100 0 0.0 0.0 0.0 0.0
1P 0.2 5.4 1.1 26.8
Totals
2P 1.9 22.5 5.8 125.9
Source: Independent reporting engineers

Other projects
Amossco provides in-house In addition to Amossco, the company’s in-house services division which mainly procures
procurement services equipment for Aminex-operated joint ventures, Aminex has three other projects, none of
which has a material influence on our forecasts or valuation at this stage.

Limited progress at West Songo-
Songo
The West Songo-Songo exploration project, which is operated by Key Petroleum (Aminex
50%), is in Tanzania and located to the west of the Songo-Songo gas field and Aminex’s
Nyuni project. Key has been planning to reprocess existing seismic data ahead of fulfilling a
single well commitment next year although, given the limited progress to date, our 2011
forecasts do not assume any drilling here.

Aminex has a free carry in Egypt
In Egypt, Aminex has a 10% carried interest in the WEEM-2 project where three wells have
been drilled, with one recovering oil to surface. Further drilling is planned following a recent
decision to move into the next phase of the Production Sharing Contract. Aminex is fully
carried through to commercial production, so it does not have any current financial
exposure.

North Korea has no material impact Finally, in North Korea, a new Production Sharing Agreement was signed in 2010, covering
for the time being a large offshore area in the Korean East Sea. Singapore-based Chosun Energy has
acquired a 50% interest in Aminex’s North Korean subsidiary for a $500,000 consideration
and $500,000 carry in the first exploration phase. This is clearly a high-risk play but, again,
we see no material financial impact for the foreseeable future.

10
15 November 2010
We expect to see higher
production, better pricing and lower
per barrel costs coming through
next year
Additional funding required
although Aminex has several
possible solutions
AMINEX
Forecasts
Our profit & loss forecasts for Aminex use a $75/bbl oil price deck in the current financial
year, rising to $80/bbl in 2011, with a US gas price of $4.50/mcf and $5.00/mcf in 2010 and
2011, respectively. Although we see net attributable production falling 25% to 94.3mboe in
the current financial year, we see a 165% improvement to 250.5mboe in 2011, with a full
year’s contribution from two new wells at Shoats Creek and a second half recovery at Alta
Loma. Our forecasts show unit production costs falling back to the $22.50/boe level in 2011,
when we expect higher production, better commodity pricing, economies of scale and a
small contribution from Amossco to result in FY2011 PBT of $2.2m (on revenues of
$17.4m), translating into diluted EPS of 0.5c (compared with a loss this year).
Fig 5: Aminex net annual production, 2008-2011F
300 251
250
200
MBOE
150 126
90 94
100
50
0
2008A 2009A 2010E 2011E
Source: Aminex, Shore Capital Stockbrokers
Although we expect operating cash flow of $5.3m in 2011, we also are also forecasting
heavy capital spend totalling $31.5m in the 18 months from June 2010 to December 2011.
This is expected to cover items including two more deep wells at Shoats Creek, pipeline
facilities at Kiliwani North, drilling of Nyuni-2 and drilling of Ruvuma-2. Although our
forecasts imply the need for additional funding to get Aminex through its planned work
programme, the company has several potential ways to address this, including a farm-out at
Nyuni and reserves-based lending facility in the US. In the meantime, we have attempted to
account for potential future dilution by applying a 30% discount to our Risked NAV
calculation, which still implies a substantial uplift from the current share price.
11
15 November 2010 AMINEX

Fig 6: Aminex profit & loss ($'000)

Yr-end December 2008A 2009A 2010F 2011F
Revenues
US production 5,539 4,247 4,883 14,635
Oil services 4,638 3,601 2,500 2,750
Total revenues 10,177 7,848 7,383 17,385
Operating costs
US production (3,885) (4,428) (4,292) (8,894)
Oil services (4,427) (3,431) (2,425) (2,668)
Central costs (3,466) (2,754) (4,000) (3,500)
Exploration (8,107) - - -
Total operating costs (19,885) (10,613) (10,717) (15,061)
Operating profit
US production 1,654 (181) 591 5,741
Oil services 211 170 75 83
Central costs (3,466) (2,754) (4,000) (3,500)
Exploration (8,107) - - -
Total operating profit (9,708) (2,765) (3,334) 2,324
Profit on disposal - - 238 -
Net interest 46 (130) (150) (150)
Profit before tax (9,662) (2,895) (3,246) 2,174
Tax - - - -
Profit after tax (9,662) (2,895) (3,246) 2,174
Average shares (000) 242,118 315,176 425,393 454,007
EPS (cents) (3.99) (0.92) (0.76) 0.48
Adjusted EPS (cents) (0.64) (0.92) (0.82) 0.48
Adjusted diluted EPS (cents) (0.64) (0.92) (0.82) 0.45
Source: Aminex, Shore Capital Stockbrokers

12
15 November 2010 AMINEX

Fig 7: Aminex cash flow ($'000)

Yr-end December 2008A 2009A 2010F 2011F
Net profit (9,662) (2,895) (3,246) 2,174
DD&A 758 1,590 1,226 3,257
Depreciation of other assets 79 50 50 50
Asset write-down 8,107 0 0 0
Other provisions 11 0 0 0
FX (gains)/losses (924) 215 0 0
Net interest (46) 130 150 150
Profits on disposal (26) 20 (238) 0
Impairment provisions 328 0 0 0
Share based payments 473 191 925 250
Working capital movement 777 (968) 750 (500)
Decommissioning costs 0 0 (100) (100)
Interest paid (17) (13) (10) (10)
Operating cash flow (142) (1,680) (493) 5,270
Capital expenditure (4,292) (1,360) (3,603) (7,150)
Exploration expenditure (10,748) (5,918) (9,731) (18,500)
Payment of back costs 0 1,250 0 0
Proceeds from disposal 428 91 0 0
Interest received 226 7 4 0
Other 0 0 0 0
Free cash flow (14,528) (7,610) (13,823) (20,380)
Share issues 41 15,250 4,475 0
Net cash flow (14,487) 7,640 (9,348) (20,380)
Opening net cash 18,401 3,914 11,554 2,206
Closing net cash 3,914 11,554 2,206 (18,174)
Source: Aminex, Shore Capital Stockbrokers

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15 November 2010 AMINEX

Fig 8: Aminex production and cost data

Yr-end December 2008A 2009A 2010F 2011F
Total oil production (000bbl) 36.0 42.0 49.5 144.5
Total gas production (000mcf) 314 489 260 615
Total oil & gas production (000boe) 90.1 126.3 94.3 250.5
Average oil price ($/bbl) 86.79 55.25 75.00 80.00
Average gas price ($/mcf) 7.75 3.91 4.50 5.00
Oil revenues ($’000) 3,124 2,321 3,713 11,560
Gas revenues ($’000) 2,434 1,912 1,170 3,075
Total revenues ($’000) 5,539 4,247 4,883 14,635
Production costs/boe ($) (34.69) (22.47) (32.50) (22.50)
Production costs ($’000) (3,127) (2,838) (3,066) (5,637)
Cash operating profit ($’000) 2,412 1,409 1,817 8,998
DD&A/boe ($) (8.41) (12.59) (13.00) (13.00)
DD&A ($’000) (758) (1,590) (1,226) (3,257)
Total operating costs (US production) ($’000) (3,885) (4,428) (4,292) (8,894)
Operating profit (US production) ($’000) 1,654 (181) 591 5,741
Source: Aminex, Shore Capital Stockbrokers

14
15 November 2010 AMINEX

Fig 9: Aminex asset summary

Asset Country Status Operator Aminex Gross Next steps
interest production
Alta Loma US Producing from Sunny Ernst-2 El Paso 37.5% Circa Sunny Ernst-2 recompletion
well 400boepd
Shoats US OM-1 and OM10-1 on-stream Aminex 50-100% Circa Development drilling (2 deep
Creek 650boepd wells)
South US Producing from 5 wells Kaler Energy 25% 1.9mmcfd GU-40 development well
Weslaco
Somerset US Production from multiple stripper Aminex 100% 100bopd Marginal production; under
wells ongoing review
Kiliwani Tanzania Field development plan submitted Aminex 50% Tested at Commercial production in
North following KN-1 discovery 40mmcfd 2012
Nyuni Tanzania Exploration with existing seismic Aminex 50% None Nyuni-2 exploration well
and well data
Ruvuma Tanzania Exploration with existing seismic Tullow 37.5% None Ruvuma-2 exploration well
and well data
W. Songo- Tanzania Exploration licence awarded in Key Petroleum 50% None Seismic reprocessing planned
Songo 2008
WEEM-2 Egypt Exploration; three wells drilled Aminex 10% (carried) None Further drilling planned
Petroleum Egypt
North N. Korea Exploration; new PSC signed Korex 50% None Seismic
Korea reprocessing/reinterpretation
Source: Aminex, Shore Capital Stockbrokers

15
15 November 2010 AMINEX

Fig 10: Aminex indicative well programme

2011 2012
Q1 Q2 Q3 Q4
Tanzania
Nyuni
Nyuni-2 exploration well
Kiliwani North on-stream
Follow-up drilling
Ruvuma
Ruvuma-2 exploration well
United States
Shoats Creek
1st Wilcox development well
2nd Wilcox development well
Alta Loma
SE-2 recompletion
SE-3 development well
Source: Aminex, Shore Capital Stockbrokers

16
15 November 2010 AMINEX

Common abbreviations
BBL Barrels

BCF Billion Cubic Feet

BOE Barrels of Oil Equivalent

BOPD Barrels of Oil Per Day

GIIP Gas Initially In Place

MBOE Thousand Barrels of Oil Equivalent

MCF Thousand Cubic Feet

MMBBL Million Barrels

MMBOE Million Barrels of Oil Equivalent

MMCFD Million Cubic Feet Per Day

PSA Production Sharing Agreement

TCF Trillion Cubic Feet

17
15 November 2010 AMINEX

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18
15 November 2010 AMINEX

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