Highlights
- Net income of
$58.5 million (first nine-month 2021 total of$135.8 million ) and end of quarter cash balance of$38.9 million . - Received two dividends for a total amount of
$112.5 million from Prime during the quarter (received three dividends in the first nine-month 2021 for total of$150.0 million ). - Reduced the corporate debt facility to
$23.0 million with an end of quarter positive net cash position of$15.9 million . - Selected Prime's third quarter 2021 results net to
Africa Oil's 50% shareholding*: - end of quarter cash position of
$244.9 million and debt balance of$514.7 million ; - average daily working interest ("W.I") production of 27,500 barrels of oil equivalent per day ("boepd) and economic entitlement production of 30,100 boepd (84% light and medium crude oil and 16% conventional natural gas)2,3; and
- EBITDA4 of
$191.5 million (first nine-month 2021 total of$489.8 million ) and cash flow from operations of$128.4 million (first nine-month 2021 total of$466.6 million ). - All assets produced without OPEC+ quota restrictions during the third quarter of 2021. Overall production performance during the period fell within the top quartile of the 2021 management guidance and reservoir performance remains broadly in line with expectation.
- Post third quarter 2021, Prime signed and closed a pre-export finance facility ("PXF Facility") for an initial amount of
$150 million and a 7-year tenor. The use of proceeds of the PXF Facility is to partly repay Prime's RBL facility and other general corporate purposes. The PXF Facility can be increased to an amount up to$300 million , subject to the PXF Lenders' approval. - Venus-1 exploration well on Block 2913B, offshore
Namibia , is expected to spud by the end of this year. Venus-1 will target a large basin floor fan system with significant undiscovered petroleum initially in place that has been identified using 3D seismic data.
________________________________ |
* Important information: |
2021 Third Quarter Financial Results
(Thousands United States Dollars, except Per Share and Share Amounts)
Cash and cash equivalents | 38,854 | 40,474 | ||
Total assets | 959,606 | 910,499 | ||
Short-term debt | - | - | ||
Long-term debt | 23,000 | 141,000 | ||
Total liabilities | 67,306 | 156,212 | ||
Total equity attributable to common shareholders | 892,300 | 754,287 | ||
Nine months ended | Nine months ended | Three months ended | Three months ended | |
Share of profit from investment in joint venture | 168,331 | 149,788 | 70,953 | 32,472 |
Share of (loss)/profit from investment in associates | (3,295) | (660) | (1,205) | (717) |
Total operating income | 165,036 | 149,128 | 69,748 | 31,755 |
Net operating income/(loss) | 152,033 | (75,518) | 63,694 | 28,465 |
Net income/(loss) | 135,810 | (97,459) | 58,506 | 21,189 |
Net income/(loss) per share - basic | 0.29 | (0.21) | 0.12 | 0.04 |
Net income/(loss) per share - diluted | 0.28 | (0.21) | 0.12 | 0.04 |
Weighted average number of share outstanding - basic ('000s) | 472,973 | 471,738 | 473,505 | 471,950 |
Weighted average number of share outstanding - diluted ('000s) | 477,268 | 471,738 | 477,799 | 475,150 |
Number of shares outstanding ('000s) | 473,929 | 471,950 | 473,929 | 471,950 |
Cash flows (used in)/ provided by operations | (7,769) | (3,433) | (3,858) | (2,679) |
Cash flows used in investing | 140,408 | (448,690) | 112,286 | 18,944 |
Cash flows (used in)/provided by financing | (134,230) | 153,185 | (104,648) | (25,244) |
Total change in cash and cash equivalents | (1,620) | (299,067) | 3,764 | (9,032) |
Total change in equity | 138,013 | (85,171) | 65,586 | 26,839 |
The financial information in this table was selected from the Company's unaudited consolidated financial statements for the three months ended September 30, 2021. The Company's consolidated financial statements, notes to the financial statements, management's discussion and analysis for the three months ended |
FINANCIAL POSITION AND EARNINGS
The Company recognized net operating income amounting to
Prime distributed two dividends to its shareholders in the third quarter of 2021 with
On
PRIME'S THIRD QUARTER 2021 PERFORMANCE
OPEC+ quotas impacting Egina field were relaxed in
During the third quarter of 2021, Prime was allocated four oil liftings with total sales volume of approximately 4.0 million barrels or 2.0 million barrels net to
Prime has sold forward and hedged 100% of its 2021 cargoes at an average price of
Third quarter 2021 average operating cost of
Prime achieved third quarter 2021 sales revenue of
As of
Post third quarter 2021, Prime signed and closed a pre-export finance facility ("PXF Facility") for an initial amount of
2021 OPERATIONAL OUTLOOK
On
In
Guidance for Prime, net to AOC's 50% shareholding: | |
W.I. production (boepd) | 24,000-28,000 |
Economic entitlement production (boepd) | 26,000-30,000 |
Cash flow from operations (million) | |
Capital investment (million) | |
Net Debt Repayment (million) | |
In
Through its 30.9% shareholding in
On Block 11B/12B, Africa Energy and its joint venture partners are contemplating an early production system ("EPS") for a phased development of Block 11B/12B. The joint venture is currently performing development studies and preparing a field development plan and an environmental application with the intention of agreeing gas terms and submitting an application for a Production Right before the Exploration Right expires in
On Block 2B, the operator of the license is re-tendering for a rig to enable the joint venture to drill the Gazania-1 well before the Exploration Right expires in
Management Conference Call
Senior management will hold a conference call to discuss the results on
+1 647 794 1826 | |
800-289-0462 | |
+46 (0)8 5033 6573 | |
0200 883 447 | |
0800 358 6374 | |
Participant Passcode | 202742 |
Webcast URL | https://event.webcasts.com/starthere.jsp?ei=1512166&tp_key=4a1d4a9163 |
Please join the event conference 5-10 minutes prior to the start time. A recording of the webcast will be available on the Company's website after the event.
NOTES | |
1. | The 50% shareholding in Prime is accounted for using the equity method and presented as an investment in joint venture in the 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 W.I. 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. | Earnings Before Interest, Tax, Impairment, Depreciation and Amortization ("EBITDA") is not a generally accepted accounting measure under International Financial Reporting Standards ("IFRS") and does not have any standardized meaning prescribed by IFRS and, therefore, may not be comparable with definitions of EBITDA that may be used by other public companies. Non-IFRS measures should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS. |
5. | Second quarter 2021 average operating cost was revised from |
6. | Prime's cash flow from operations net to |
7. | All dollar amounts are in |
About
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.
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 instituting a dividend policy or implementing a share buyback program, utilization and drawdown under the new Corporate Loan facility, performance of commodity hedges, the results, schedules and costs of exploratory drilling activity, uninsured risks, regulatory and fiscal changes, availability of materials and equipment, unanticipated environmental impacts on operations, duration of the drilling program, availability of third party service providers and defects in title. No assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. The Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by applicable laws. These forward-looking statements involve risks and uncertainties relating to, among other things, changes in macro-economic conditions and their impact on operations, changes in oil prices, reservoir and production facility performance, hedging counterparty contractual performance, OPEC+ quota impact on production, results of exploration and development activities, cost overruns, uninsured risks, regulatory and fiscal changes, defects in title, claims and legal proceedings, availability of materials and equipment, availability of skilled personnel, timeliness of government or other regulatory approvals, actual performance of facilities, joint venture partner underperformance, availability of financing on reasonable terms, availability of third party service providers, equipment and processes relative to specifications and expectations and unanticipated environmental, health and safety impacts on operations. Actual results may differ materially from those expressed or implied by such forward-looking statements.
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