Africa Oil Announces 2020 Fourth Quarter Results

  • Mar 01, 2021
  • Oil News Kenya

Africa Oil President and CEO Keith Hill commented: “I am pleased to report strong full-year results for the Company, despite one of the most challenging years for our industry. Our investment in Prime has performed exceptionally well with its strong production and free cash flows that enabled significant deleveraging, both at the Prime and Africa Oil corporate levels. Prime reduced its RBL debt by $522 million or 29% of the principal amount at the start of 2020. Africa Oil reduced its corporate term loan by $109 million or 44% of the original amount of $250 million that was drawn in January 2020. We are in a strong position to continue this strong performance and also plan to pursue new business development opportunities with a focus on the acquisition of producing assets, offshore West Africa. We can also look forward to exciting catalysts through our other portfolio investment companies. These include further progress in the development of Block 11B/12B discoveries, offshore South Africa, the drilling of the Venus exploration well in Block 2913B, offshore Namibia and the drilling of the Gazania exploration well in Block 2B, South Africa. We also continue to work closely with the Government of Kenya and our JV partners to progress the South Lokichar development project. I am confident that we can realize the significant potential in this project supported by a recovery in the commodity markets and a return to a normal business climate with the COVID-19 recovery gathering momentum.”

Through its 30.9% shareholding in Impact Oil & Gas, the Company has exposure to the Venus-1 exploration well in Block 2913B, offshore Namibia which is expected to spud in third quarter 2021. 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. The well will be operated by a subsidiary of Total S.A. (40%) with partners Qatar Petroleum (30%.), Impact (20%) and NAMCOR (10%). Africa Oil has a net 6% indirect economic stake in the license through its shareholding in Impact.

Venus-1 is a potential basin-opening well and could be an impactful catalyst for the Company’s other interests in the area. A successful Venus-1 well would demonstrate the presence of an active regional petroleum system and would increase the prospectivity of adjacent blocks including Block 3B/4B, where Africa Oil holds a 20% operated working interest.

Through its shareholding in Africa Energy, the Company has exposure to the Gazania-1 exploration well that will be drilled in Block 2B offshore South Africa, with a target spud date in late 2021 to early 2022. The Gazania-1 will test a prospect in the A-J rift basin that is near but updip of the A-J1 oil discovery (1988) that flowed 36o API oil to surface. A success at Gazania-1 would de-risk a large inventory of prospects in the block that have been identified from 3D seismic data. Africa Oil has an indirect 5.5% economic interest in Block 2B through its 19.9% shareholding of Africa Energy. Africa Energy holds a carried 27.5% working interest in Block 2B with partners Azinam (Operator, 50% WI), Panoro Energy (12.5% W.I.) and Crown Energy (10% W.I.).