VANCOUVER, BC, Jan. 10,
2024 /CNW/ - (TSX: AOI) (Nasdaq-Stockholm: AOI) –
Africa Oil Corp. ("Africa Oil", "AOC" or the "Company") is
pleased to announce a significant value enhancing farmout
transaction related to its offshore Namibia interests held through its investee
company, Impact Oil and Gas Limited ("Impact"). On the closing of
this transaction Impact will have a 9.5% interest in Blocks 2912
and 2913B (together, "the Blocks")
that is fully carried for all joint venture costs, with no cap,
through to first commercial production. Impact will also be cash
reimbursed on closing for its share of the past costs incurred on
the Blocks net to the farmout interests, which is estimated to be
approximately USD 99 million. View
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Impact Oil and Gas Namibia (Pty) Ltd., a wholly-owned subsidiary
of Impact, has signed a farmout agreement ("Farmout Agreement")
with TotalEnergies EP Namibia B.V., a wholly-owned subsidiary of
TotalEnergies S.E. ("TotalEnergies"), for a share of Impact's
interests in the Blocks. This Agreement provides Impact with carry
loan over all of Impact's remaining development, appraisal and
exploration costs on the Blocks from January
1st, 2024 ("Effective Date"), until the date on
which Impact receives the first sales proceeds from oil production
on the Blocks ("First Oil Date").
The carry is repayable to TotalEnergies from a share of Impact's
after-tax cash flow and net of all joint venture costs, including
capital expenditures, from production on the Blocks post the First
Oil Date. During the repayment of the carry, Impact will pool its
entitlement barrels with those of TotalEnergies for more regular
off-takes and a more stable cashflow profile, and will also benefit
from TotalEnergies' marketing and sales capabilities.
Completion of the transaction will be subject to customary third
party approvals from the Namibian authorities and joint venture
parties.
The Farmout Agreement provides Africa Oil with the opportunity
to continue its participation in the world class Venus oil
development project with no upfront costs, and to retain further
upside in the highly prospective exploration and appraisal
("E&A") activities on the Blocks that have the potential to
significantly grow the existing discovered resource base.
Africa Oil and Hosken Consolidated Investments Limited ("HCI"),
the two largest shareholders in Impact with a combined shareholding
of 81.0%, are fully aligned and support the Farmout Agreement
having worked jointly with Impact's management to advance the
negotiations with TotalEnergies.
Africa Oil President and CEO, Roger
Tucker commented: "The Farmout Agreement allows Africa
Oil to retain a very attractive growth opportunity in a major
energy project, that is expected to add significant reserves and
production to our portfolio from the late 2020s through the 2030s
and beyond, without stretching our balance sheet or exposing
ourselves to the execution risk on a large-scale deepwater project.
It also reinforces our view of TotalEnergies' confidence in the
development outlook for the Venus oil discovery and the follow-on
prospectivity of the two blocks.
The successful collaboration of Impact management, the Company
and Impact's other major shareholder, HCI, has played a pivotal
role in navigating the complexities of this transaction which will
enable Impact and its shareholders to retain the upside potential
from the on-going exploration and appraisal campaign on Block
2913B with significant prospects
scheduled to be drilled in 2024, with zero capital expenditure to
Impact.
This Farmout Agreement delivers on Africa Oil's stated objective
of focusing on and enhancing the value of its core assets. Also,
with the funding secured for Impact's Namibian assets through to
first commercial production and no further demand on our balance
sheet, we can accelerate the work to consolidate our assets
ownership, and to consider other capital allocation options
including shareholder capital returns and other growth
opportunities."
Block 2913B (PEL 56) and the Venus Discovery
Petroleum Exploration License 56, Block 2913B, is located offshore southern Namibia and covers approximately 8,215 km² in
water depths between 2,450m and
3,250m. Impact currently holds a
20.0% interest in this block. TotalEnergies, the operator, holds a
40.0% interest, QatarEnergy holds a 30.0% interest, NAMCOR, the
Namibian state oil company, holds a 10.0% interest. On the closing
of the Farmout Agreement, Impact will hold a 9.5% interest in this
block.
Block 2913B contains the world
class Venus light oil and associated gas field that was discovered
by the Venus-1X well drilled in 2022, which encountered
high-quality light oil-bearing sandstone reservoir of Lower
Cretaceous age. This well was re-entered, side-tracked and tested
in in third quarter 2023, achieving positive test results. These
results are being interpreted and incorporated into the development
studies for the field.
Further appraisal of the Venus structure was undertaken with the
drilling and testing of the Venus-1A appraisal well. A third
appraisal well on the Venus structure, Venus-2A, is currently being
drilled by the Deepsea Mira rig, and a second rig, Tungsten
Explorer, is currently drilling the Mangetti-1X exploration well,
targeting a prospect located in the northern part of Block
2913B. Mangetti-1X will then be
deepened to appraise the northern area of the Venus structure.
In addition to the on-going drilling operations a 3D seismic
acquisition program over the southern part of Block 2913B is currently under way. This program will
cover an area where further follow-on prospectivity bas been
identified from existing 2D seismic data sets. These
include Damara and Damara South prospects.
Block 2912 (PEL 91)
Petroleum Exploration License 91, Block 2912 is adjacent and to
the west of Block 2913B. It covers an
area of approximately 7,884 km2 in water depths between
3,000m and 3,950m. Impact currently holds a 18.9% interest
in this block. TotalEnergies, the operator, holds a 37.8% interest,
QatarEnergy holds a 28.3% interest, NAMCOR, the Namibian state oil
company, holds a 15.0% interest. On the closing of the Farmout
Agreement, Impact will hold a 9.5% interest in this block.
Advisors
Evercore acted as sole financial advisor to Africa Oil in
relation to this transaction.
Management Presentation
Senior management will host a presentation on the Farmout
Agreement today, Wednesday January 10,
2024 at 09:00 (ET) / 14:00 (GMT) / 15:00 (CET). Participants
should use the following link to register for the live webcast:
https://onlinexperiences.com/scripts/Server.nxp?LASCmd=AI:4;F:QS!10100&ShowUUID=7E8A6290-E17A-4AB9-837C-6B3B438A68CC
This landing page also has a link for the dial-in details to
listen to the event via telephone.
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 2:00 am EST
on January 10, 2024.
Forward Looking
Information
Certain statements and information contained herein constitute
"forward-looking information" (within the meaning of applicable
Canadian securities legislation), including statements related to
the completion of the farmout deal with TotalEnergies, future
development(s) on Blocks 2912 and 2913B offshore Namibia, distribution of reimbursed past costs
to Impact's shareholders, drilling operations on Blocks 2912 and
2913B, drilling of future exploration
wells on these blocks by end of 2024 or beyond, outcome of the 3D
seismic on these blocks, progress and the successful of the farmout
processes for Blocks 3B/4B, EG-31 and EG-18. 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. 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. 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, 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.