VANCOUVER, BC, May 29, 2023
/CNW/ - (TSX: AOI) (Nasdaq-Stockholm: AOI) – Africa Oil
Corp. ("Africa Oil", "AOC" or the "Company") is pleased to
note the press release by TotalEnergies announcing the renewal of
Oil Mining License ("OML") 130 for a period of 20 years. Africa Oil
has an effective 8% interest in OML 130 through its 50%
shareholding in Prime Oil & Gas Coöperatief U.A. ("Prime"). The
renewal of OML 130 means that Akpo, Egina and Preowei fields will
operate under the terms of the new Petroleum Industry Act ("PIA"),
being the first assets to effectively benefit from the PIA fiscal
terms. View PDF version.
This license renewal, a condition precedent to the closing of
Prime's debt refinancing, will allow Prime to enhance its debt
capacity, reset its tenor to 6 years and materially increase its
near-term liquidity capacity. Closing of the refinancing, expected
in the next few days, will provide Prime with the scope to
distribute dividends to its shareholders, including Africa Oil,
during this year.
The renewal of OML 130 will also allow the Company to increase
the available amount of its standby corporate credit facility to
$200.0 million from $100.0 million currently, significantly
increasing its liquidity. This facility, which is currently
unutilised, is available to be drawn until October 20, 2023.
Africa Oil President and CEO Keith
Hill commented: "The renewal of OML 130 is very good
news for the Company and its shareholders. This license is the core
of our Nigerian investment and accounts for most of Prime's
production and cashflows. It also includes attractive growth
opportunities such as the undeveloped Preowei oil discovery, which
we can now take forward towards a final investment decision.
Additional opportunities include step-out exploration and appraisal
drilling, that should support production rates over the coming
years.
Africa Oil has a debt-free balance sheet with significant
liquidity headroom and a balanced portfolio of production and
development assets in Nigeria,
plus the industry's most exciting appraisal and exploration
campaign in Namibia's offshore
Orange Basin. Drilling at the Venus-1A well is progressing well and
we look forward to updates from the operator in the coming
weeks."
Background Information
Africa Oil completed the acquisition of a 50% shareholding in
Prime in January 2020 for a cash
consideration of $519.5 million. To
date, the Company has received a total of $650.0 million in dividend payments from Prime
and achieved payback of its Prime investment in under three
years.
The main assets of Prime are an indirect 8% working interest
("WI") in OML 127 (4% net to AOC) and an indirect 16% WI in OML 130
(8% net to AOC). OML 127 is operated by affiliates of Chevron and
covers part of the producing Agbami field. OML 130 is operated by
affiliates of TotalEnergies and contains the producing Akpo and
Egina fields. The three fields in these two OMLs are located over
100 km offshore Nigeria. All three
fields have high quality reservoirs and produce light to medium
sweet crude oil through FPSO facilities. Akpo and Egina also export
associated gas which feeds into the Nigerian liquified natural gas
plant. OML 130 license area also covers the Preowei undeveloped oil
discovery. This asset is expected to be developed through a
satellite subsea tieback to the existing Egina FPSO facility.
At end of first quarter 2023 Prime had an outstanding
reserves-based lending ("RBL") facility and a pre-export finance
facility with an aggregate outstanding debt amount of $720.3 million ($360.2
million net to AOC). Prime will now complete the refinancing
of both these facilities through the closing of a new RBL facility.
This new facility is for a principal amount of $1.0 billion ($0.5
billion net to AOC) with a 6-year tenor. Prime also
reported a cash position of $396.9
million ($198.5 million net to
AOC) at end of first quarter 2023.
At end of first quarter 2023, Africa Oil had a debt-free balance
sheet and a cash position of $158.2
million. The Company's standby credit facility is available
until October 20, 2023, with an
available amount of $200.0 million.
This facility has a maturity of October, 20, 2025.
About Africa Oil
Africa Oil Corp. is a Canadian oil and gas company with
producing and development assets in deepwater Nigeria and an exploration/appraisal portfolio
in west and south of Africa, as
well as Guyana. The Company is
listed on the Toronto Stock Exchange and on Nasdaq Stockholm under
the symbol "AOI".
Additional Information
This information is information that Africa Oil is obliged to
make public pursuant to the EU Market Abuse Regulation and the
Swedish Financial Instruments Trading Act. The information
was submitted for publication, through the agency of the
contact persons set out above, at 4:30 a.m.
ET on May 29, 2023.
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 production, schedules
and costs of exploratory drilling activity including those offshore
Namibia , 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, results of
exploration and development activities, cost overruns, uninsured
risks, regulatory and fiscal changes including uncertainties around
applicable corporate income tax in Nigeria, 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.
SOURCE Africa Oil Corp.