Highlights
- During Q1 2024, the Company's disciplined capital allocation framework that prioritizes maintaining a strong balance sheet, consolidating its core assets, and shareholder capital returns was supported by two strategic farm down agreements for its assets in the prolific
Orange Basin . On completion, these agreements will de-risk the Company's balance sheet in relation to the Venus oil development project that is expected to underpin the Company's long-term production outlook. - These agreements allowed the Company to increase the pace of its shareholder capital returns with a total shareholder return of
$25.4 million during Q1 2024 and$37.5 from start of the year toMay 10, 2024 . - The Company ended Q1 2024 with a cash balance of
$195.5 million and no debt. - In
April 2024 the Company received a$25.0 million dividend distribution from Prime, net to its 50% shareholding. - TotalEnergies, the operator of Block 2913B, offshore
Namibia , successfully completed the drilling and testing of Venus-1A and Mangetti-1X wells, acquiring important technical data to incorporate into the Venus reservoir model. - Selected Prime's highlights and results net to
Africa Oil's 50% shareholding*:- Recorded daily WI2 production of approximately 17,100 barrels of oil equivalent per day ("boepd") and average daily net entitlement3 production of approximately 20,100 boepd
- The infill drilling program on Prime's Nigerian assets continued during Q1 2024 with two Akpo wells completed, and the drilling rig contract for this campaign was extended to the end of
October 2024 . - Recorded cashflow from operations4,5 of
$77.1 million . - Prime's cash position of
$134.3 million and debt balance of$375.0 million resulting in a Prime net debt position of$240.7 million atMarch 31, 2024 .
* Important information: |
2024 First Quarter Results Summary
(Millions United States Dollars, except Per Share and Share Amounts)
Three Months Ended | Year Ended | |||
Unit | 2024 | 2023 | 2023 | |
AOC highlights | ||||
Netincome/(loss) | $'m | 3.5 | 21.9 | 87.1 |
Net income/ (loss) per share - basic | $/ share | 0.01 | 0.05 | 0.19 |
Cash position | $'m | 195.5 | 158.2 | 232.0 |
Prime highlights, net to AOC's 50% shareholding1,2 | ||||
WI production3 | boepd | 17,100 | 20,900 | 19,800 |
Economicentitlementproduction4 | boepd | 20,100 | 23,200 | 22,400 |
Cashflowfromoperations5 | $'m | 77.1 | 70.9 | 298.8 |
EBITDAX | $'m | 93.6 | 113.6 | 458.7 |
Free Cash Flow | $'m | 67.2 | 75.0 | 149.1 |
Netdebt | $'m | 240.7 | 161.7 | 298.9 |
The financial information in this table was selected from the Company's unaudited consolidated financial statements for the three months ended March 31, 2024 and the Company's audited consolidated financial statements for the year ended |
In Q1 2024, the Company recorded a net income attributable to common shareholders of
This is primarily made up of share of profit from the Company's investment in Prime of
The figures below explaining the movements in the result of Prime are based on Prime's gross balances as per the financial statements.
Prime revenues decreased by
General and administrative expenses, including share-based compensation charges relating to the LTIP and Stock Option Plan, amounted to
General and administrative expenses excluding share-based compensation charges amounted to
Outlook
2024 Priorities and Business Plan
The Company's focus for 2024 is to advance its main opportunity set comprised of its core assets in deepwater
- Farm down agreement between its investee company, Impact, and TotalEnergies for the interests in Blocks 2912 (PEL 91) and 2913B (PEL 56), offshore
Namibia , which was announced onJanuary 10, 2024 . This transaction gives the Company the opportunity to continue its participation in the world-class Venus light oil development project, and the follow-on exploration and appraisal program on the Blocks at no upfront cost. This frees up the Company's balance sheet for the pursuit of other growth opportunities and shareholder capital returns. - Farm down agreement for its Block 3B/4B, offshore
South Africa , with TotalEnergies and QatarEnergy, which was announced onMarch 6, 2024 . On completion of this transaction,Africa Oil will retain a 17.0% interest in the Block and will transfer the operatorship of the Block to TotalEnergies for a total consideration, including the carry, of up to$46.8 million .
The Company, as part of its disciplined capital allocation focused on the organic growth opportunities in the existing portfolio, also announced on
Namibia Orange Basin Appraisal and Exploration Campaign
The drilling and test results from Venus-1X, Venus-1A, Venus-2A and Mangetti-1X (Venus interval), completed in 2023 and
In addition to the Venus opportunity, the Company has retained upside exposure to the exploration opportunities that in case of success, could significantly increase the existing discovered resource base on Blocks 2912 and 2913B. Processing of data from the 3D seismic data survey that was completed during Q1 2024, could better define the prospectivity on Block 2193B to the south of the Venus discovery. It is possible that the JV could drill further high-impact exploration wells on separate fan structures on this Block in late 2024 or 2025 once the 3D seismic interpretation work is completed. Also, a 3D seismic survey was completed post period on the northern part of Block 2913B focused on the Mangetti complex to support the potential appraisal of the Mangetti discovery.
On
At the date of this report, AOC has an interest in this program through its 31.1% shareholding in Impact, which in turn has a 20.0% WI in Block 2913B (PEL 56) and 18.9% in Block 2912 (PEL 91). On closing of the farmout transaction with TotalEnergies, Impact will retain a carried 9.5% WI in each of the two Blocks.
The infill drilling campaign on PML 2 (Akpo field) and PML 3 (Egina field) that commenced on
Also, the acquisition of 4D monitor seismic survey on Akpo was completed during Q1 2024 and similar surveys are planned for Akpo, Egina and Agbami during 2024. The acquisition plan also includes a baseline 4D seismic survey of the Preowei field. The surveys will support future drilling decisions across both PML 2, 3 and 52.
Following the 20-year renewal of OML 130 (resulting in the issue of PMLs 2, 3, 4, and PPL 261) on
On
The Company is continuing with the farm down process for Blocks EG-18 and EG-31 as well as continuing the subsurface studies to enhance the definition of multiple targets already identified.
The Company holds an operated WI of 80.0% in each of Blocks EG-18 and EG-31.
2024 Management Guidance
The 2024 Management Guidance is unchanged and a summary is presented below, including significant assumptions in the footnotes, for completeness:
Prime, net to AOC's 50% shareholding: | Full-Year 2024 | Q1 2024 Actuals |
WI production (boepd) (6, 7) | 16,500 – 19,500 | 17,100 |
Economic entitlement production (boepd) (6, 7, 8) | 18,000 – 21,000 | 20,100 |
Cash flow from operations (million) (5) | ||
Capital investment (million) |
Notes
1. | The 50% shareholding in Prime is accounted for using the equity method and presented as an investment in joint venture in the Interim Condensed Consolidated Balance Sheet. |
2. | Aggregate oil equivalent production data comprised of light and medium crude oil and conventional natural gas production net to Prime's WI in Agbami, Akpo and Egina fields. These production rates only include sold gas volumes and not those volumes used for fuel, reinjected or flared. |
3. | Net entitlement production is calculated using the economic interest methodology and includes cost recovery oil, tax oil and profit oil and is different from working interest production that is calculated based on project volumes multiplied by Prime's effective working interest in each license. |
4. | Includes non-GAAP measures. Definitions and reconciliations to these non-GAAP measures are provided in Fourth Quarter 2023 MD&A. |
5. | Cash flow from operations before working capital adjustments and interest payments. |
6. | The Company's 2024 production will be contributed solely by its 50% shareholding in Prime. |
7. | Approximately, 78% expected to be light and medium crude oil and 22% conventional natural gas. |
8. | Net entitlement production estimate is based on a 2024 average Brent price of |
All dollar amounts are in |
Management Conference Call
Senior management will hold a conference call to discuss the results on
Participants should use the following link to register for the live webcast:
https://edge.media-server.com/mmc/p/2vjwubo5
Participants can also join via telephone with the instructions available on the following link:
https://register.vevent.com/register/BI0fd530d12c0d4c4d8be2d49571b38dbf
1. | Click on the call link and complete the online registration form. |
2. | Upon registering you will receive the dial-in info and a unique PIN to join the call as well as an email confirmation with the details. |
3. | Select a method for joining the call; |
i. Dial-In: A dial in number and unique PIN are displayed to connect directly from your phone. | |
ii. Call Me: Enter your phone number and click "Call Me" for an immediate callback from the system. The call will come from a US number. |
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Additional Information
This information is information that
Advisory Regarding Oil and Gas Information
The terms boe (barrel of oil equivalent) is used throughout this press release. Such terms may be misleading, particularly if used in isolation. Production data are based on a conversion ratio of six thousand cubic feet per barrel (6 Mcf: 1bbl). This conversion ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value. Petroleum references in this press release are to light and medium gravity crude oil and conventional natural gas in accordance with NI 51-101 and the COGE Handbook.
Forward-Looking Information
Certain statements and information contained herein constitute "forward-looking information" (within the meaning of applicable Canadian securities legislation). Such statements and information (together, "forward-looking statements") relate to future events or the Company's future performance, business prospects or opportunities.
All statements other than statements of historical fact may be forward-looking statements. Statements concerning proven and probable reserves and resource estimates may also be deemed to constitute forward-looking statements and reflect conclusions that are based on certain assumptions that the reserves and resources can be economically exploited. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "seek", "anticipate", "plan", "continue", "estimate", "expect, "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions) are not statements of historical fact and may be "forward-looking statements". Forward-looking statements involve known and unknown risks, ongoing uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements, including statements pertaining to the 2024 Management Guidance including production, cashflow from operation and capital investment estimates, performance of commodity hedges, the results, schedules and costs of drilling activity including those offshore
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