Africa Oil Corp (PK) (AOIFF) Quote

Lucia Kassai and Devika Krishna Kumar
Thu, September 19, 2024 at 5:15 AM HST

(Bloomberg) -- Oil-storage tanks at a key US crude hub have drained to near their bottoms as a massive new pipeline in Canada diverts flows elsewhere, muddying market signals that traders have long relied on.



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Inventories in Cushing, Oklahoma, have been dwindling for the past four months and now sit near the lowest in a decade for this time of year. Market participants say the drawdown — which typically takes place as fuel demand rises during the driving season — was exacerbated this year as the expanded Trans Mountain pipeline shifts Canadian oil supplies onto the country’s Pacific Coast and away from the US Gulf Coast.

The expanded pipeline has moved about 400,000 barrels of crude a day since starting operations in May, and Cushing’s tanks have lost almost 13 million barrels of oil during that span. Flows of Canadian crude to the US Gulf Coast have declined to the point where a competing pipeline system owned by Enbridge Inc. mostly operated without the congestion it typically experiences during the US summer driving season.

European demand for US crude is also pulling barrels out of storage at Cushing, traders said, particularly since buyers are on the hunt for similar grades after supply disruptions in Libya.

“With Libya risks, I tend to think storage will stay at tank bottoms in the near term, and the market will make WTI too expensive to export,” said Scott Shelton, an energy specialist at TP ICAP Group Plc.

The continued drawdowns at Cushing have helped prop up the price spread between the nearest two WTI futures contracts. The spread is hovering near $1 a barrel after climbing to the highest levels in nearly a month.

Movements in crude spreads are a closely watched gauge for supply-demand balances, and they are currently signaling a dearth of barrels for immediate delivery despite worries about a longer-term oversupply of oil.

Cushing’s current stockpiles of about 22.7 million barrels represent less than a third of the hub’s working capacity of 78 million barrels. The rapid decline is stoking concerns that the hub’s ability to operate normally may be threatened. Pipeline operators at the storage hub didn’t immediately respond to requests for comment.

Stolen from Seeking Alpha:

Africa Oil: Simplifying The Balance Sheet While Reducing Cash Needs
Sep. 13, 2024 7:22 PM ETAfrica Oil Corp. (AOI:CA) Stock, AOIFF
Long Player
Investing Group Leader
(9min)
Summary

Africa Oil should grow tremendously over the coming 10 years.

Africa Oil consolidates Prime Oil & Gas ownership.

The second quarter results show an interruption in production due to the drilling campaign.

Africa Oil is debt-free, but Prime's debt is being paid down.

Africa Oil has a number of simplification proposals underway.

The last article on Africa Oil Corp. (OTCPK:AOIFF) discussed the consolidation of prime ownership under the company umbrella in exchange for company stock. Since that time, management has continued to streamline its investments while also reducing future cash needs. The result of this is carried interests in key areas while the company's financials will be a bit easier to understand in the future. There's also a focus on areas that will be growth areas while maybe some more speculative (or uncertain) projects go by the wayside as this process continues. Africa Oil was, for a long time, a story company that's one of the rare companies transitioning to an actual operating entity with a very bright future and some impressive partners.

What made the transition possible was the association at the time with the Lundin Energy Group of companies. That sizable organization is well respected for its record with investors. But that association has now ended. The proposed combination not only simplifies the whole structure, but also places another major (well-respected) shareholder behind the company to help this company continue to grow. It's hard to understate the necessity of that kind of relationship when it comes to growing a small company in the offshore business.
Second Quarter

Another announcement made previously was a drilling campaign to add to production for the company's major producing asset off the coast of Nigeria. That was going to interrupt ongoing production to a certain extent and the current results show that. However, the breakeven results were overshadowed by a distribution from Prime and a reduction in the net debt.

A combination of a different tax structure and the key transactions shown below have affected both comparisons and reported results. The details are shown in the quarterly report. A combination of issues may continue to affect quarterly results until all of this completed, which makes quarterly comparisons a real challenge.

Africa Oil itself is debt-free. However, Prime does have debt that's being paid down and therefore shows on the consolidated balance sheet of Africa Oil.

Probably the most important consideration is the structure and health of the company after all the anticipated transactions are complete. The same goes for the drilling campaign.
Key Transactions

This is a summary of what was announced during the fiscal quarter. After the quarter ended, the company announced an offer to minority shareholders of the subsidiary Impact to buy out their shares.
All of this activity sort of makes the second quarter earnings announcement largely irrelevant. Once the drilling campaign is completed, production interruptions are no longer a concern and the steps shown above are likewise complete, this will be a very different company going forward.

Management also announced an agreement to trade its nearly 15% interest in Eco (Atlantic) Oil & Gas Ltd. (OTCPK:ECAOF) for a 1% interest that Eco held in 3B/4B. This was part of the earnings announcement and further rationalizes the company holdings. As a result, this company now only has interests in the African Continent.

Throughout all of this Africa Oil itself will remain debt-free. The only issue would be the drilling campaign and how production issues as a result of that campaign affect cash flow and debt repayments in the future.

The Business Going Forward

The transaction with Eco Atlantic will, in effect, end the business relationship with that company.

Any relatively small player in the offshore business will have down years and up years rather than a smooth "straight-line" up.

Africa Oil Pro-Forma Future Guidance:In this case, the latest drilling campaign will provide an immediate production (and cash flow) boost until the next campaign. Later, another project will come online and provide another source of cash flow. That diversification will provide the start of the company's effort to smooth earnings.

It's harder to tell the effects on the stock price because the industry has been in the doghouse for some time. As a result, it may well be worth the wait for the better years ahead because the industry could return to more normal historical valuations that would provide some upside potential even if production declines between drilling campaigns. There's also some potential for another accretive acquisition using some cash flow.

The key part of the slide is the low capex required to get to that second production source shown on the lower right-hand corner of the slide. (Couldn't copy and paste it)

Summary Of The Future Business

Africa Oil is a Canadian company that reports in United States dollars.

One of the things that gives this company credibility over many of its size is the partners shown above. Both Chevron Corporation (CVX) and TotalEnergies SE (TTE) are well-regarded operators that very much elevate this offshore operator considerably above many offshore operators of the same size.

This could well make the search for a "name" partner for the Equatorial Guinea project much easier than it otherwise would be.

The end of the strategy of minimizing cash out in exchange for some working interest in a project is finally within the view of the future.

The coming online of projects in South Africa and Namibia is bringing income located in two of the most advanced countries in Africa. They're also two of the most stable countries on the continent. This represents a higher valuation location than the location of the source of the current cash flow.

It is going to take some time for that future to arrive and begin to diversify cash flow. Therefore, this stock may be appreciated when the latest drilling campaign is completed. But there's a lot more appreciation potential that's a few years away.

Valuation of the stock will depend upon market conditions at the time another project begins to contribute to total company production and profits. Overall, though, this is a small player with decent-sized interests in some relatively large projects.

Summary

Between the drilling campaign that is affecting the cash flow from the one cash source, and all the announced simplification strategies, the company's financial statements are very likely to undergo a major (positive) transition that will end with the consolidation of Prime within the company. Overall, every step appears to be a major plus for the company.

Africa Oil, as a smaller offshore operator, naturally has an elevated risk to the point it's considered speculative at this point. However, for those who can handle the risk of an issue like this, it's probably a strong buy idea. This company is likely to be a materially different and far more valuable company by the end of a decade (and likely before that). This is that rare company that's making the transition from a "story company" to an operating model.

Africa Oil itself is debt-free. However, Prime does have debt that it's paying down and is consolidated on the balance sheet. That debt is at conservative levels. The low requirements of cash needed to bring the next projects online (because a carry has been negotiated) means that the company will continue to have a strong balance sheet.

Risks

Any upstream company is exposed to the volatility and low visibility of future oil prices. A sustained and severe downturn in commodity prices could change the outlook for this company and some of its promising projects.

The drilling campaign underway has so far been successful. But success for the rest of the campaign is not assured.

Similarly, all the simplification steps have necessary approvals and administrative steps that need to be successful. A review of all of this could find some unforeseen challenges to get all the anticipated steps done. It's unlikely. But it's a risk.

A loss of key personnel could materially set back the company's future prospects.

Thanks douginil. Divi on the 27th Sept.

Nice, Bigrig.

Your are welcome. Hope your knee get better soon.

Hi everyone. Ive been following this for about 3 years. only have a few shares in comparison to all of you.. My take is that the oil markets are quiet, but the rumblings are noisy. An upwelling of chatter seems to be concerned that if a global recovery occurs than the supply will be too slim. Keep in mind that this is running parallel to an electric car scene that hasn't been able to significantly affect oil consumption overall. Consider this period of time to the mid 2000's when the oil speculation specialist were driving up costs for any and every reason but the opposite. If we have learned anything in the past few years its that cycles flip and flop like politicians. The long story to what I'm trying to say is that I feel like they are going to put a squeeze on oil that will cause a worldwide price run at some point probably starting a few months after the election. Just sharing some observances and opinions. I am short term bearish but medium- and long-term charging bull until variables change and show signs of another direction.

Thanks for posting this stuff douginil..Am recovering from knee replacement surgery since last Friday.. So much pain I cant think straight.

AFRICA OIL ANNOUNCES COMPLETION OF THE STRATEGIC FARM DOWN FOR ORANGE BASIN BLOCK 3B/4B

VANCOUVER, BC, Aug. 28, 2024 /CNW/ - (TSX: AOI) (Nasdaq-Stockholm: AOI) – Africa Oil Corp. ("Africa Oil", or the "Company") is pleased to announce the completion of Africa Oil SA Corp.'s ("AOSAC") strategic farm down agreement ("Agreement") with  TotalEnergies EP South Africa S.A.S. ("TotalEnergies") and QatarEnergy International E&P LLC. ("QatarEnergy") for the Orange Basin Block 3B/4B, offshore South Africa, announced on March 6, 2024. AOSAC is a wholly-owned subsidiary of Africa Oil. View PDF version

AOSAC has retained a direct 17.00% interest in Block 3B/4B and transferred the operatorship of the block to TotalEnergies.

Transaction Highlights:

Maximum transaction value of up to $46.8 million to Africa Oil.
Africa Oil will receive, subject to achieving certain milestones defined in the Agreement, staged cash payments for a total cash payment of $10.0 million of which $3.3 million is now due, and the remaining balance in two successive payments conditional upon achievement of key operational and regulatory milestones.
Africa Oil will also receive a full carry of its 17.00% retained share of all JV costs, up to a cap, repayable to TotalEnergies and QatarEnergy from production in case of exploration success and development, which is expected to be adequate to fund the Company's share of drilling for up to two wells on the licence.

Under a separate agreement between Africa Oil, AOSAC, Eco (Atlantic) Oil & Gas Limited ("Eco") and Eco's subsidiary, Azinam Limited ("Azinam"), signed in July 2024, AOSAC will acquire an additional 1.00% in Block 3B/4B from Azinam ("Eco Agreement") subject to the satisfaction of customary conditions precedent, including approvals from the government of South Africa.

Africa Oil Chief Executive Officer, Dr Roger Tucker, commented: "Africa Oil has an unrivalled position amongst its Independent E&P peer group in the world-class Orange Basin. This includes our interest in the Venus discovery and the follow-on appraisal and exploration upside on Block 2913B, offshore Namibia. This farm down with TotalEnergies and QatarEnergy, two companies with deep geological knowledge of the basin, will facilitate exploration activities on Block 3B/4B, and extends our near-term scope for testing significant upside potential in our portfolio."

About Block 3B/4B

Block 3B/4B covers an area of 17,581 km2 within the Orange Basin offshore South Africa in water depths ranging between 300m and 2,500m. This block lies to the southeast and on trend with number of oil discoveries including the Venus discovery. There is approximately 14,000 km2 of 2D seismic and 10,800 km2 of 3D seismic over Block 3B/4B and a large opportunity set of exploration prospects has been identified.

AOSAC has a 17.00% interest in Block 3B/4B (26.25% prior to completion of the Agreement) with TotalEnergies holding a 33.00% operated interest; QatarEnergy holding 24.00%; Ricocure (Proprietary) Ltd ("Ricocure") holding 19.75%; and Azinam holding 6.25%. Â

On the completion of the Eco Agreement, which is subject to the satisfaction of customary conditions precedent, including approvals from the government of South Africa, the interests in Block 3B/4B will be comprised of: 18.00% held by AOSAC; 33.00% held by TotalEnergies; 24.00% held by QatarEnergy; 19.75% held by Ricocure; and 5.25% held by Azinam.

Eco Agreement

In July 2024, Africa Oil and AOSAC signed the Eco Agreement with Azinam, pursuant to which Azinam has agreed to sell and assign a 1.00% interest in Block 3B/4B to AOSAC in exchange for the cancellation of all common shares in Eco and warrants over Eco common shares held by Africa Oil. The Company holds 54,941,744 Eco shares and 4,864,865 in Eco warrants, combined constituting approximately 16% of the total securities in Eco and also constituting the entire security holding of Africa Oil in Eco. Through its current shareholding in Eco, Africa Oil has an indirect 0.93% interest in Block 3B/4B.

AFRICA OIL ANNOUNCES AGREEMENT TO ACQUIRE A MATERIAL INTEREST IN IMPACT

VANCOUVER, BC, Aug. 27, 2024 /CNW/ - (TSX: AOI)  (Nasdaq-Stockholm: AOI) – Africa Oil Corp. ("Africa Oil", or the "Company") is pleased to announce that it has signed a call and put option agreement with three shareholders ("Selling Shareholders") in Impact Oil and Gas Limited ("Impact") to purchase a material 7.0% interest in Impact ("Option Agreement"). If exercised, the Option Agreement will increase Africa Oil's Impact shareholding to 39.5%. PDF Version.

Africa Oil Chief Executive Officer, Dr Roger Tucker, commented:Â "Through our shareholding in Impact we have exposure to an exciting opportunity set in Namibia's Orange Basin, including the Venus oil discovery, and a highly prospective exploration and appraisal program on Blocks 2913B and 2912. This purchase achieves the Company's objective of materially increasing its ownership in Impact, enhancing its rights and influence over a core strategic asset and value driver for Africa Oil."

Under the Option Agreement, the Company has the right to acquire an additional 80,160,198 shares in Impact at an exercise price of GBP 0.57 per share for a period of up to six months ("Option Period") from the Option Agreement's signing date of August 27, 2024 ("Signing Date"). The Company has purchased the call option feature at a price of GBP 0.08 per underlying Impact share. If Africa Oil has not exercised its call option by the end of the fourth month post the Signing Date, Selling Shareholders have the right to put their Impact shares to Africa Oil at an exercise price of GBP 0.57 until the expiry of the Option Period.

If the Option Agreement is exercised, Africa Oil will hold 449,464,396 shares in Impact representing a 39.5% shareholding position on a fully diluted basis.

Next earnings report Nov. 12-18. Long ways to go. The buybacks have ceased so that BTG does not passively increase their 35% position to say 40%. What then will keep the share price steady, if anything. AOC is in a rock and a hard place right now. Hope for more Prime dividends.

Thanks "D" ..Looks like they acquired their 1/3rd ownership at .72 cents per share. Hope it makes sense.

News Release Issued: Aug 19, 2024 (5:00pm EDT)
AFRICA OIL ANNOUNCES INCREASE IN ITS IMPACT OIL & GAS SHAREHOLDING

VANCOUVER, BC, Aug. 19, 2024 /CNW/ - (TSX: AOI) (Nasdaq-Stockholm: AOI) – Africa Oil Corp. ("Africa Oil", or the "Company") is pleased to provide an update on the offer to minority shareholders in Impact Oil & Gas Limited ("Impact") announced on March 18, 2024 ( "Offer"). View PDF version

The Company made the Offer to acquire shares from minority shareholders in Impact conditional upon completion of the farm down transaction for Impact's Namibia assets announced on January 10, 2024.

The Company has decided to waive this condition and proceed to complete the Offer. Completion is expected to occur within five Business Days. On completion of the Offer Africa Oil will purchase 25,652,039 shares from 42 accepting shareholders at a cost of approximately USD 18.6 million. Following completion of these purchases the Company will hold 369,304,198 shares in Impact and will increase its shareholding to 32.4%, accounting for Impact management share options exercised during July 2024.

Thanks douginil... Just listened to the E.R. podcast. Once gain could not understand most of the words due to poor audio or language difficulties. Either way I wish they'd get their chit together for these events. Dr, Tucker was understandable however. It appears they are well situated going forward and apparently are working with Tier One operators only such as Total and Shell. Someone asked how many Prime dividends are expected before the end of the year; Could not understand answer (again audio).

News Release Issued: Aug 14, 2024 (6:00pm EDT)
AFRICA OIL ANNOUNCES SECOND QUARTER 2024 RESULTS

VANCOUVER, BC, Aug. 14, 2024 /CNW/ - (TSX: AOI) (Nasdaq-Stockholm: AOI) – Africa Oil Corp. ("Africa Oil", "AOC" or the "Company") is pleased to announce its financial and operating results for the three and six months ended June 30, 2024. View PDF version

Highlights

Announced the agreement to consolidate the remaining 50% interest in Prime within Africa Oil, thereby increasing the Company's ownership in core cash generating assets and bringing in a new, strategically aligned cornerstone investor. BTG Pactual, and also enabling enhanced shareholder returns and creating a materially stronger growth proposition.
The Company ended Q2 2024 with a cash balance of $185.6 million and no debt.
During Q2 2024, the Company received a $25.0 million dividend distribution from Prime, net to its 50% shareholding.
During H1 2024, the Company returned a total of $50.6 million to its shareholders through its base dividend distribution and share buybacks for amounts of $11.5 million and $39.1 million respectively.
The Board of Directors of Africa Oil approved a second semi-annual dividend of $0.025 per share, payable on September 27, 2024.
Post period, the Company reached an agreement with Eco to acquire an additional 1.00% interest in Block 3B/4B in exchange for its 14.84% shareholding in Eco, pursuing its strategy to rationalize its portfolio of exploration investments.
Selected Prime's highlights and results net to Africa Oil's 50% shareholding*:
Recorded Q2 2024 daily WI production of approximately 15,800 barrels of oil equivalent per day ("boepd") and average daily net entitlement production of approximately 18,300 boepd.
Post Q2 2024 the rolling monthly daily WI production (as of August 11, 2024) averaged approximately 18,100 boepd and net entitlement production averaged approximately 20,800 boepd; full-year 2024 management production guidance is unchanged.
Recorded Q2 2024 cashflow from operations of $69.6 million.
Prime's cash position of $152.8 million and debt balance of $375.0 million resulting in a Prime net debt position of $222.2 million at June 30, 2024. The AOC Net Debt inclusive of 50% Prime Net Debt is $36.6 million.

Africa Oil President and CEO, Roger Tucker commented: "It was an incredibly busy first half of the year as we signed three strategic transactions, taking Africa Oil towards the next phase of value creation and shareholder returns. We have high-quality development projects, high-impact exploration and appraisal catalysts that will all be funded on completion of these deals. The quality of our organic growth opportunity set is demonstrated by the size and calibre of our partners.

The Prime consolidation once closed, will see the roll-out of a new transparent capital allocation framework and will create scope for a significantly enlarged capital returns program for our shareholders. Africa Oil stands with a differentiated investment case of offering sustainable shareholder returns, significant organic growth opportunities, and is well-positioned to pursue new opportunities on the back of a strong balance sheet."

Prime did send us $m25. Quarterly earnings 0.00
Not exciting but the field is growing with many catalysts.

Looks like our earnings report is gonna look crappy. My guess is -.02 cents for the quarter unless Prime sends AOC a divi.

Awesome farrell90. Good catch. TSX $2.39 target $3.65 ($1.26 difference)
American $1.79 + $1.26 +- could mean a target of $3.05 U.S.

Can't happen fast enough. With additional free cash flow added, this could be conservative.

Thanks farrell90.

Nice news. Thanks for posting

Rick Rule recommends Africa Oil on Bloomberg 7/19/2024

-Valuation less than half of what its worth
-Increased dividend
-Namibian holdings a plus
-cash flow can fund dividend and growth
-All 8 analysts have buy rating... up to $3.65 Cdn

https://www.bnnbloomberg.ca/investing/2024/07/19/rick-rules-top-picks-for-july-192024/

Good luck,Farrell

EnerCom Denver - The Energy Investment Conference will once again include The Energy Transition and Emerging Technology Session featuring quick-pitch investment presentations from promising start-up energy and technology companies focused on innovation and operations in alternative energy, advanced oil and gas technology, environmental sustainability and carbon solutions. The Energy Transition and Emerging Technology Session provides invited start-up companies a platform to give a 15-minute presentation and participate in one-on-one meetings as requested by investors.

EnerCom is currently accepting applications from start-up companies focused on innovation in alternative energy, advanced oil and gas technology, environmental sustainability, and carbon solutions to present at The Energy Transition and Emerging Technology Session at EnerCom Denver. Interested companies can contact Larry Busnardo at lbusnardo@enercominc.com for complete application details; space is limited.

A complete list of companies participating in the conference and schedule of events can be found on the conference website EnerCom Denver – The Energy Investment Conference.

Presenting company lineup as of July 17, 2024, includes:

Africa Oil (TSX: AOI)

Amplify Energy (NYSE: AMPY)

APA Corporation (NASDAQ: APA)

Aureus Energy Services

Avant Natural Resources

Bayswater

Baytex Energy (TSX/NYSE: BTE)

Berry Corporation (NASDAQ: BRY)

Bison Oil & Gas

Blue Spruce Operating

Calfrac Well Services (TSX: CFW)

Chapman Nuclear

Chevron (NYSE: CVX)

Cibolo Energy Partners

Civitas Resources (NYSE: CIVI)

Diversified Energy (NYSE: DEC)

DNOW (NYSE: DNOW)

Donovan Ventures

Drilling Tools International (NASDAQ: DTI)

EnerCom Inc.

Flotek Industries (NYSE: FTK)

Forum Energy Technologies (NYSE: FET)

Franklin Mountain Energy

Fundare Resources

Geopark (NYSE: GPRK)

Gradient Geothermal

Gran Tierra Energy (TSX/NYSE: GTE)

Granite Ridge Resources (NYSE: GRNT)

GTO Technologies

Hemisphere Energy (TSX: HME)

Hydroacoustics, Inc.

Kelt Exploration (TSX: KEL)

Laramie Energy

Liberty Energy (NYSE: LBRT)

LiTHOS (OTC: LITSF)

Lycos Energy (TSXV: LCX)

Mach Natural Resources (NYSE: MNR)

Mobius Risk Group

NCS Multistage (NASDAQ: NCSM)

NuVista Energy (TSX: NVA)

Oklahoma Environmental Services

Paradigm by Puloli

Parex Resources (OTC: PARXF)

Pason Systems (TSX: PSI)

PetroTal Corp. (TSXV: TAL)

Pine Cliff Energy (TSX: PNE)

Pulse Seismic (TSX: PSD)

Raisa Energy

Ranger Energy Services (TSX: RNGR)

ReconAfrica (OTC: RECAF)

Ring Energy (NYSE: REI)

Sage Butte Energy

SandRidge Energy (NYSE: SD)

Select Water Solutions (NYSE: WTTR)

Sendero ESG Solutions

Serve Robotics (NASDAQ: SERV)

Standard Energy Partners

Tenaz Energy (TSX: TNZ)

U.S. Energy Development Corp.

VAALCO Energy (NYSE: EGY)

Verdun Oil

Vitesse Energy (NYSE: VTS)

W&T Offshore (NYSE: WTI)

Walker Lane Research Partners

Wasatch Energy Management

X Oil Development

Zephyr Energy plc (AIM: ZPHR; OTCQB: ZPHRF)

Conference Details: EnerCom Denver offers investment professionals a unique opportunity to network and listen to senior management teams from leading companies across the energy value chain update investors on their operational and financial strategies and learn how they create value for stakeholders.

Conference Dates: August 18–21, 2024. EnerCom will host its annual Charity Golf Tournament on Sunday, August 18th at the scenic Arrowhead Golf Club in Littleton, Colorado. The EnerCom Denver Golf Tournament -- a fundraiser for IN! Pathways to Inclusive Higher Education -- requires a $150 donation to participate. The Conference Global Sponsor Netherland, Sewell & Associates, Inc. (NSAI) sponsors the tournament, along with EnerCom.

Formal presentations and meetings will be held Monday, August 19th through Wednesday, August 21st.

Venue: Westin Denver Downtown. We highly encourage attendees to book hotel rooms under the EnerCom group block, as space is limited.

Who Attends the Conference: Institutional, private equity, hedge fund investors, family offices, research analysts, retail brokers, trust officers, high net worth investors, investment and commercial bankers, and energy industry professionals gather in Denver throughout the conference.

Earnings report est. Aug 12-16...Ex Divi. Est Sept 6th. If anyone knows when the 8% divi kicks in, please post it on Ihub AOIFF board.

MORE INFO
[Stolen from the Value portfolio]

Africa Oil Corporation Plans To Bump Its Yield Past 8%
Jun. 30, 2024 12:05 PM ETAfrica Oil Corp. (AOIFF) Stock, AOI:CA Stock
The Value Portfolio profile picture

Investing Group Leader
Summary

Africa Oil Corporation has a single producing asset in Prime Oil and Gas, which is being consolidated to enable strong shareholder returns.
The company has revamped its strategy to focus on growth potential, including farm downs, equity investments, dividends, and share buybacks.
Africa Oil Corporation's assets in Nigeria have strong production potential, with plans for substantial shareholder returns through dividends and buybacks.
I am The Value Portfolio, an experienced analyst specializing in stock research and wealth growth. I run the investing group The Retirement Forum where I focus on ideas to prepare you for retirement.

Oil drilling well alone in the middle of sandy desert

Africa Oil Corporation (NYSEARCA: OTCPK:AOIFF) has numerous exciting assets, however, at the end of the day, it has a single producing asset. That asset is a 50% shareholding in Prime Oil and Gas and it's associated offshore Nigerian production. That asset had substantial debt, with dividends paid to the parent companies. As we'll see throughout this article, the company's consolidation moves will enable strong shareholder returns.
Africa Oil Corporation New Strategy

Africa Oil Corporation revamped its strategy in mid-2023 and over the past year has worked to focus on its growth potential.

Africa Oil Corporation Investor Presentation

That includes two farm downs to de-risk the company's growth prospects, along with an equity investment placing for Impact. The company has also continued to pay a reasonable dividend of roughly 3% and has continued to buyback shares, buying back $40 million USD of shares or ~5% of its outstanding float. It can repurchase up to 10% of shares.

That, combined with the proposed consolidation we'll see below, will enable continued long-term growth and shareholder returns.

Africa Oil Corporation Proposed Consolidation

The company is consolidating with BTG, specifically BTG's 50% stake in Prime Oil and Gas.

Africa Oil Corporation Investor Presentation

That will result in Prime Oil and Gas becoming a subsidiary of AOC, with all earnings and reserves going straight to AOC. As a result, BTG will have a 35% growth through the issuance of new shares. The $800 million USD company will grow to a $1.2 billion USD company, valuing the company's Prime Oil and Gas assets at $800 million.

Africa Oil Corporation Investor Presentation

The deal provides immediate cash flow from strong Nigerian assets that have strong long-term growth potential. It doubles the reserves and production of the company and enables streamlined financial reporting and an increase in FCF to shareholders. The company is now committed to a $100 million USD base dividend, or a high single-digit yield of more than 8%, along with stronger overall returns.

That doesn't count the company's strong buyback program or its excess FCF that it can utilize for shareholder returns.

Africa Oil Corporation Asset Overview

The company has strong assets in Nigeria, assets that it will now have full ownership of, partaking in 3 of the top 5 fields in Nigeria by production.

Africa Oil Corporation Investor Presentation

The 3 fields have ~310 thousand barrels / day in aggregate gross field production with experienced operators. The vast majority of the company's reserves are proven, with continued development opportunities, and products such as Preowei to expand production. The company expects 2024 production to be a pro forma 36k barrels / day, with an 8-year reserve life.

The assets have generated $850 million in dividends in the last 4 years alone, and that dividend production is expected to remain strong. Pro forma year-end net debt will be $365 million, a comfortably affordable level from Prime, and one that can be managed. At current prices, Prime Oil and Gas earns more than $700 million in annual EBITDA.

Africa Oil Corporation Shareholder Returns

Africa Oil Corporation will have a strong pro-forma balance sheet committed to substantial shareholder returns.

Africa Oil Corporation Investor Presentation

The company expects to maintain at least $150 million in liquidity while maintaining LTM net debt / EBITDAX at <1.0x. The company plans to re-finance Prime debt / RBL, and we expect the combined structure will make that much easier for the company. The company is committed to hefty shareholder returns with $100 million in base dividends + 50% of excess FCF.

That's a dividend yield of more than 8%, plus continued shareholder returns, through buybacks. The company has exciting organic growth opportunities, with minimal risk due to its farm-down transaction. At the same time, the company is still looking for alternative long-term growth opportunities, something worth paying close attention to, given its historical success here.

Thesis Risk

The company's largest risk is weakness in oil prices as long-term demand tops out and low-cost competition exists from numerous sources such as American shale. That could hurt its ability to generate returns from its existing assets, while slowing down its ability to develop new assets. That's worth paying close attention to.
Conclusion

Africa has long been an unpopular jurisdiction for oil companies to invest in, with instability presenting a major risk. That's visible through the company's original project, Kenya, which was never built due to an inability to raise the necessary capital for a takeaway pipeline. That's combined with long-term growth concerns as oil demand remains weak and cheap production arises.

The company is issuing 35% more equity, to BTG, to enable it to take full ownership of Prime Oil and Gas. That will move the company to a net debt position, but enable it to grow substantially and have additional cash. The company is planning to move to a more than 8% debt load plus additional share buybacks. All of that makes the company a valuable investment.

You guys are welcome...Go AOC!!

Thanks for sharing your thoughts and info.

I got out of Africa Oil last year. I like this here and going to get back in.

Opus X

Thanks for posting. I appreciate your efforts.

Farrell

I hate having to sell shares to meet obligations, but still have my core. We may be on to something big tho.

Very interesting Scarbender Thanks for posting. I have been needing cash and have been selling some Africa Oil

Now if only my Pancontental position would only pay off.

History: THIS IS A BIG DEAL!

BTG Pactual began in 1983 in Rio de Janeiro as the brokerage firm Pactual DTVM,[12] when its initial and primary activity was proprietary trading and securities sales and trading. In 1986, the asset management and investment bank areas were created. In 1989, the bank opened its São Paulo's office and started the internationalization of operations. Eleven years after the foundation, the bank started the wealth management activities.

In 1998, the company replaced its executive officers with a team led by André Esteves, Eduardo Plass, Marcelo Serfaty and Gilberto Sayão, and acquired Banco Bamerindus.[13] In 2000, the bank opened Pactual Asset Management S.A. DTVM and an office in Cayman Islands.[14] In 2003, the expansion continued with offices in Belo Horizonte and Recife.

In 2006, the UBS bought Banco Pactual for US$2.5 billion[15][16] and created UBS Pactual, André Esteves became CEO of all UBS' Latin American operations. Two years later, Esteves left the bank to found BTG Investments with nine other founding partners of UBS and UBS Pactual, including Pérsio Arida, a former president of the Brazilian Central Bank. In 2009, BTG bought out UBS shareholders and created Banco BTG Pactual.[17] The following year the bank issued US$1.8bn in capital, representing 18.65%, to a group of international investors and partners. In 2011, they acquired 51.00% of Banco PanAmericano shares. In 2012, BTG Pactual bought brokerages in Chile and Colombia, Celfin Capital and Bolsa y Renta, and held an initial public offering (IPO) raising R$3.65 billion, making it one of the 20 biggest companies listed on the B3.[18]

In 2013, the bank, through its subsidiary BTG Pactual Timberland Investments Group LLC, acquired forest asset management contracts from Regions Timberland Group, a division of Regions Bank, the acquisition expanding its investment in forest assets. The deal established BTG Pactual as the biggest independent forest asset manager in Latin America and one of the biggest in the world, with assets of US$3bn and a portfolio of 716,000 hectares of land in North America, Latin America, Europe and Africa. In 2014, it made two acquisitions in Europe: British reinsurer Ariel Re[19] bought for an undisclosed amount, and also Swiss bank BSI,[20] for US$1.7 billion.[21]

In 2017, BTG Pactual bought shares of companies such Anheuser-Busch InBev, Fibria Celulose, Gerdau, Staples and Telefónica Brasil.[22]

Structure

BTG Pactual was formed by Banco BTG Pactual and BTG Pactual Participations.[23] The latter is the managing partner and controller of BTG Investments. Banco BTG Pactual is the main operating company of the group.
Business lines

Investment banking

BTG Pactual helps companies,[24] financial institutions and governments to obtain funding by issuing securities, and through structured and guaranteed loans. It also provides services in M&A, IPOs, FX operations, as well as trading in derivatives and commodities. The bank works in cross border transactions, involving counterparties from all continents and most of the IPOs and secondary offers made in the Brazilian market.[25]
Corporate lending

It lends funds to businesses.[26] The bank has been growing in this market since the capitalizations in 2009 and 2012.[27]

Sales and trading

Products: market making, brokerage and settlement, transactions with derivatives, interest rates, exchange, equities, energy, insurance and reinsurance.[28] These activities are divided into segments such as FICC (Fixed Income, Currencies and Commodities), Equities Sales & Trading and Energy.[29]

Asset management

It offers investment solutions in fixed income, variable income, hedge funds, infrastructure and real estate opportunities, and public and private equity funds.[30] Also in the global hedge fund management market through BTG's flagship, the GEMM Fund,[31] which manages $22 billion around the world and is among the 20 most profitable funds in the world.[32]
Wealth management

BTG Pactual offers financial advisory services to families that need to protect and expand their wealth, as well as succession and real estate planning.[33][34]

Timberland investment

BTG's timberland investment group (TIG) is responsible for agribusiness and timberland management, including tree farms and natural forests.[35] It is one of the largest forest asset managers in the world, with investments in the US, Latin America, Europe and Africa.[36]

Participations

The bank invests its capital in two segments: private equity and principal investments.[37] Private equity activities refer to the management of investments made in shares of private or publicly traded companies whose share cannot be freely traded on stock exchanges, and the capital is financed by other qualified investors and by the bank itself. The principal investments division is dedicated to the activities of owning investment in financial instruments and real estate worldwide.[38]
BTG Pactual Digital

The bank's online investment platform launched in 2014.[39][40] Its retail clients have access to investment funds, fixed income products (CDB, LCA, LCI and LF), private pension (PGBL and VGBL) and COE - Certificate of Structured Operation, aimed at high-income retail in Brazil.[41][42]

Startup

BTG Pactual created a startup support program, a venture debt area specific to offer credit to startups, and started a fund to invest in global venture capital firms.[43] The boostLAB is Banco BTG Pactual's program for connecting and leveraging startups at an advanced level.[44] The partners and executives of BTG Pactual participate in the program as mentors, as well as a number of entrepreneurs, including from Silicon Valley.[45][46][47]

In August 2020, boostLab held the sixth edition of its startup potentiation program at the advanced level, selecting eight startups: Acordo Certo, Atta, Belvo, Conta Simples, iClubs, Ludos Pró (edtech), Provi and Rede Compras.[48][49]
Awards

Best Private Bank in Latin America by PWM, 2020;[50]
Best Private Bank in Colombia by PWM, 2020;[50]
Best Private Bank in Latin America by Global Finance, 2020;[51]
Best Private Bank in Colombia by Global Finance, 2020;[52]
Best Private Bank for Digital advisory services Latin America by PWM, 2019 and 2020.[53]
Best CEO – First Place – Nominated by the Buy Side and Sell Side 2019 by Institutional Investor.[54][55]
The best of Dinheiro, category Specialized Banking Brazil, 2019.[56]
Best Private Bank in Latin America by Global Finance, 2019.[57]
Best Private Banking in Chile by Global Finance, 2019.[57]
Best Bank to Invest – Digital Category by FGV and Fractal Consult, 2018 and 2019.[58]
Pension Guide Valor Econômico/Fundação Getulio Vargas - Nominated by Featured Multimarkets Asset Manager, 2019.[59]
Best Investment Bank by Euromoney (Awards for Excellence), 2019.[60]
The World’s Best Investment Bank in the Emerging Markets by Euromoney (Awards for Excellence), 2019.[61]
Best Investment Bank (in Brazil, Chile and Colombia) by World Finance, 2019.[62]
Best Private Bak (in Brazil) by World Finance, 2019.[62]
Investment Bank of the Year Brazil, Investment Bank of the Year Latam and Wealth Management Bank of the Year by LatinFinance, 2019;[63]
ECM Leader (Latin America and Brazil) by Dealogic, 2019.[64]
Best Financial Innovation Centers in the World for BoostLab by Global Finance, 2019.[65]
Highly Commended at Best Private Bank in Brazil category by the Global Private Banking Awards 2016[66]
Best Private Bank in Colombia by the Global Private Banking Awards 2016[67]
Best Private Bank in Colombia by the Global Private Banking Awards 2017[68]
Best Equities Sales bank in Brazil at the 2017 Institutional Investor ranking[69]
Elect Best Global Macro Fund by the 2018 Investors Choice Awards[70]
Elect the Best Investment bank in Brazil, Chile and Colombia by the 2018 World Finance Banking Awards[71]

Controversies
Insider trading

This case was closed and there was no impact to the public offering. In 2012, penalties for André Esteves' insider trading "force[d] the bank to amend its prospectus, give investors the option to reconsidering bids for BTG shares, and put a cloud over one of this year's highest-profile bank deals."[72] In "a statement, BTG Pactual said Esteves believed the allegations had no merit and was determined to appeal the decision."[73] However, Esteves did not appeal, citing cost and a loss of time as his reasons.[74]
Pactual sale to UBS and resale to BTG

Arthur Rutishauser argued that the way 27% of BTG was acquired is an example of an insider case: André Esteves sold the bank in 2006 for 3 billion SFr to UBS, where Huw Jenkins was a key decision maker.[75] Esteves later repurchased Pactual back in 2009 for 2.5 billion SFr after being allowed to leave UBS to set up BTG.[75] Jenkins was ejected from UBS in 2007 and disappeared then resurfaced as a senior partner and board member at BTG Pactual in 2010.[76]
BTG Pactual purchase of BSI

In July 2014, BTG Pactual purchased Banca della Svizzera Italiana (BSI), with this being subject to the approval by the Swiss Financial Market Supervisory Authority (FINMA). The CEO of FINMA, Mark Branson, was previously the CEO of UBS Securities Japan Ltd.[77] and reported directly to Huw Jenkins, CEO of UBS Investment Bank who is now a partner of BTG Pactual.[78][79] Under Mark Branson, FINMA decided whether to approve BTG Pactual's purchase of BSI, although BTG Pactual was owned and operated by former superiors and colleagues Jenkins and Esteves, it clearly does not implicate any illegal activity whatsoever.[79]
Misrepresentation allegation

The case was closed, a final settlement has been reached. An ex-employee of Hong Kong subsidiary BTG Pactual Asia Ltd, Zeljko Ivic, filed a claim alleging Banco BTG Pactual board member Huw Jenkins made fraudulent misrepresentations to Zeljko Ivic to induce him to sign agreements with the bank.[80][81] Ivic said he had played a key role in Banco BTG Pactual's initial public offering (IPO) for which Jenkins had promised him a partnership and shares.[82][83] Ivic, who valued his claim at some US$20 million, started proceedings after being dismissed in October 2013.[84][85] In March 2017, the parties involved reached a final settlement.
External links

Official website
BTG Digital

douginil... Seeking Alpha agrees with your oil man Jims blog. to wit:

Today: Seeking alpha by Long Player.
SUMMARY

* Africa Oil to issue shares in exchange for the remaining Prime Interest, whih will double its cash flow while issuing about 53% more shares.

*The dividend will increase substantially. 50% of free cash flow to be returned to shareholders, aligning company with industry competitors.

* This increases the company income from Nigeria. It also puts it in a better competitive position to grow.

* The combination erases the duplication caused by Prime and two shareholders all having independent accounting and operations.

* For existing shareholders, the most immediate result will be a significant increase in the dividend.

*There will also be some free cash flow returned to shareholders. Brings the newly constituted company in line with industry.

* Upon completion of the deal, BTG will own 35% of the company, or approximately 243 million shares.

* Those shares represent a doubling of cash flows. As an accountant, Loong Player loves the deal.

* This means a very fast payback on this combination for shareholders. An additional 18,000 BOPD would be acquired for only approx. $420 million. Deathly cheap.

* This was a Lundin controlled company at one time. Bye Bye. Now AOC is picking up a major shareholder with much energy experience that may boost future prospects.

*The company will now have an investment bank as a major shareholder. BTG made the first acquisition of Prime possible. Talk about a "partner in heaven".

Thanks to Oil Man Jims blog

06/26/24

Africa Oil (AOI.TSX AOIFF AFZ.F) announced that it has reached an agreement with BTG Pactual Oil & Gas to consolidate their respective shareholdings in Prime Oil & Gas. This will provide Africa Oil shareholders with significant free cash flows and enable the company to commit to an enhanced total shareholder returns model within a robust and clearly defined financial framework, supported by producing assets in Nigeria, and shareholders will continue to benefit from funded, high value growth opportunities, including the Venus oil project in the Orange Basin, offshore Namibia. The enlarged Africa Oil, with greater scale and financial resources, will be better positioned to deliver further growth beyond its existing portfolio, supported by a new cornerstone shareholder with a proven track record of creating value in the global oil and gas industry. A 100% increase in working interest proved plus probable reserves and production is expected in return for BTG receiving approximately 35% of the shares in the enlarged Africa Oil. Accretion in free cash flow per share for Africa Oil shareholders in the 2025 – 2029 period is expected to be more than 100%.

Thanks Scarbender

Interesting that the below item was included at the very end of the announcement. No information about how to listen. and it is 25 minutes from now.


Management Presentation

Senior management of Africa Oil will host a presentation on the Proposed Reorganization today, June 24, 2024 at 09:00 (EDT) / 14:00 (BST) / 15:00 (CEST).[/quote]

WOW!!!! BAYBEEE! We just hit a possible home run.
Please read latest news release from AOC on their website...or this.

AFRICA OIL ANNOUNCES AGREEMENT TO CONSOLIDATE THE REMAINING 50% INTEREST IN PRIME
CNW Group
Sun, Jun 23, 2024, 8:00 PM HST25 min read

In this article:
Transaction consolidates ownership in core cash generating assets and brings in a new strategically aligned cornerstone investor, enabling enhanced shareholder returns and a materially stronger growth proposition

VANCOUVER, BC, June 24, 2024 /CNW/ - (TSX: AOI) (Nasdaq-Stockholm: AOI) – Africa Oil Corp. ("Africa Oil", or the "Company") is pleased to announce it has reached an agreement with BTG Pactual Oil & Gas S.a.r.l. ("BTG Oil & Gas") to consolidate their respective shareholdings in Prime Oil & Gas Coöperatief U.A. ("Prime"). This will provide Africa Oil shareholders with significant free cash flows, and enable Africa Oil to commit to an enhanced total shareholder returns model within a robust and clearly defined financial framework, supported by world-class producing assets in Nigeria. Africa Oil shareholders will continue to benefit from funded, high value growth opportunities, including the world-class Venus oil project in the Orange Basin, offshore Namibia. View PDF version

The enlarged Africa Oil, with its greater scale and financial resources, will be better positioned to deliver further growth beyond its existing portfolio, supported by a new cornerstone shareholder with a proven track record of creating value in the global oil and gas industry. With clear strategic alignment between Africa Oil and BTG Oil & Gas, the enlarged Africa Oil will have the mandate to pursue growth opportunities in Africa and other select regions, while adhering to strict strategic, financial and operational criteria. Rebranding of the enlarged Africa Oil to reflect the broader geographic strategy of the business is planned after completion.

Amalgamation Agreement

Africa Oil has entered into a definitive agreement (the "Amalgamation Agreement") with BTG Oil & Gas and BTG Pactual Holding S.a.r.l. ("BTG Holding"), the entity which holds BTG Oil & Gas' interest in Prime, in relation to their joint 50:50 ownership of Prime, Africa Oil's investee company with deep-water assets located offshore Nigeria. Prime today accounts for 100 per cent. of Africa Oil's reserves and production1.

Under the Amalgamation Agreement, BTG Holding will be amalgamated under Canadian corporate law with a newly created subsidiary of Africa Oil, with BTG Oil & Gas receiving newly issued common shares in Africa Oil as part of the amalgamation (the "Proposed Reorganization"). On completion of the Proposed Reorganization, BTG Oil & Gas is expected to hold approximately 35 per cent. of the outstanding share capital of the enlarged Africa Oil (on a partially diluted basis, excluding certain performance share units with a long vesting horizon), based on the current number of Africa Oil shares.

Strategic Rationale for the Proposed Reorganization

In the view of the board of directors of Africa Oil (the "Board"), the Proposed Reorganization is in the best interest of the Company and will create a differentiated upstream oil and gas company. The enlarged Africa Oil will have significant scale with robust long-term free cash flows and a low leverage balance sheet, driven by large-scale and high netback assets in deepwater Nigeria. These are complemented by funded development and exploration projects in the prolific Orange Basin.

These pillars provide a strong platform for the enlarged Africa Oil to implement a steady and predictable total shareholder returns model underpinned by an enhanced base dividend policy, whilst delivering organic growth from its core assets and pursuing inorganic growth opportunities supported by a long-term and committed strategic shareholder. The enlarged Africa Oil's objective is to deliver a superior investment case relative to its peer group through a combination of financial discipline, sustainable total shareholder returns, and funded growth.

The Proposed Reorganization would provide the enlarged Africa Oil with strategic and financial benefits:

100 per cent. increase in working interest Proved plus Probable ("2P") reserves and production2 on a pro-forma basis for BTG receiving approximately 35 per cent. of the shares in the enlarged Africa Oil.

Accretion in free cash flow per share for Africa Oil shareholders in the 2025 – 2029 period is expected to be more than 100 per cent., significantly enhancing Africa Oil's capacity to support:

sustainable through-cycle returns to shareholders, underpinning an annual base dividend of US$100 million ("Base Dividend")3 that is deemed by the Board to be sustainable in a range of through-cycle oil price scenarios;

an annual commitment to distribute at least 50 per cent. of excess free cash flow after Base Dividend distribution in the form of supplemental dividends and/or share repurchases; and

ongoing investment in Africa Oil's low-cost, high-margin core producing assets in deepwater Nigeria to extend the production life of these assets, while exploiting in-field and near-field development opportunities.

Increased scale and balance sheet strength, with combined net debt4 / EBITDA5 of 0.4x on a pro-forma basis at year end 2023, along with the potential to benefit from lower borrowing costs.

The introduction of a long-term cornerstone shareholder that is strategically aligned with Africa Oil and committed to growing a sustainable upstream oil and gas business, would deliver superior value creation and shareholder capital returns. BTG Oil & Gas' support could increase the enlarged Africa Oil's access to business opportunities and potentially unlock new sources of growth capital, while complementing Africa Oil's disciplined capital allocation and financial decision making through BTG Oil & Gas' participation on the Board.

Enabling direct control of Prime's cash flows and balance sheet through the consolidation of Africa Oil and BTG Oil & Gas' respective interests in Prime versus the equity accounting method that is followed by Africa Oil today for its investment in Prime. This in turn will facilitate greater transparency and visibility of Prime's financial performance for Africa Oil's shareholders.

Significant scope to streamline the business processes and decision making to achieve cost savings.

Both the Board and the board of directors of BTG Oil & Gas have unanimously approved the Proposed Reorganization.

Completion of the Proposed Reorganization is targeted to occur during or before the third quarter of 2025 and is subject to, among other conditions, Africa Oil shareholder approval, customary consents and approvals from the Nigerian authorities, the Toronto Stock Exchange ("TSX") and Nasdaq Stockholm, completion of the previously announced farm-down of Africa Oil's Namibian interests that are held via Impact Oil & Gas Limited ("Impact"), and a reorganization of the holding structure of BTG Holding to implement the Amalgamation Agreement.

Africa Oil President and CEO, Roger Tucker commented: "Africa Oil's vision is to be a leading independent pure play exploration and production company that consistently delivers peer-leading returns. We have a well-positioned platform with three pillars of a strong balance sheet, high netback production and funded development projects to pursue significant inorganic growth and to take advantage of opportunities in the upstream oil and gas sector as the industry evolves through the energy transition. The consolidation of Prime, together with the farm-downs in Namibia and South Africa, and the stake increase in Impact, are all significant steps in our 2024 business plan. The Proposed Reorganization will enhance our operations, deliver identifiable savings, and increase our capital returns to shareholders on a sustainable basis. We look forward to welcoming our partner BTG Oil & Gas as a shareholder in Africa Oil and its nominees to our board of directors as we work to deliver further value growth."

Huw Jenkins, Vice Chairman of the board of directors at Banco BTG Pactual and Chairman of the board of Prime commented: "We have high regard for Africa Oil's management team, which has demonstrated its ability to deliver innovative and highly accretive industry transactions, and are pleased to become direct shareholders in Africa Oil. We believe that the Proposed Reorganization will create a unique listed vehicle in the exploration and production sector that is capable of industry-leading total shareholder returns. We are committed to working with Africa Oil management, and as part of Africa Oil's board of directors, to support the next phase of the enlarged Africa Oil's growth strategy, in line with our objective of investing in the best businesses and assets in the global upstream oil and gas industry."

Reorganization Structure and Exchange Ratio

The Proposed Reorganization envisages the consolidation of BTG Oil & Gas' and Africa Oil's respective 50 per cent. shareholdings in Prime on completion. The Proposed Reorganization is to be implemented by way of a three-cornered amalgamation structure under Canadian corporate law pursuant to the Amalgamation Agreement.

In connection with the Proposed Reorganization, BTG Oil & Gas will receive newly issued common shares in Africa Oil, that will, based on the current outstanding share capital of Africa Oil, result in BTG Oil & Gas owning approximately 35 per cent. of the outstanding share capital of Africa Oil (on a partially diluted basis) at completion of the Proposed Reorganization. The remaining approximately 65 per cent. of the enlarged Africa Oil (on a partially diluted basis) will continue to be held by existing Africa Oil securityholders.

The relative ownership of existing Africa Oil securityholders and BTG Oil & Gas in the enlarged Africa Oil has been set with reference to a January 1, 2024 effective date (the "Reference Date"), with a compensation mechanism agreed between Africa Oil and BTG Oil & Gas to account for any cash movements to either Africa Oil shareholders from Africa Oil or to BTG Oil & Gas from Prime in the period between the Reference Date and completion of the Proposed Reorganization and will be settled by way of a pre-completion dividend by Prime, or a pre-completion capital contribution into Prime by Africa Oil and/or BTG Oil & Gas.

The Proposed Reorganization requires the approval of at least 50 per cent. of the votes cast by the holders of Africa Oil shares present in person or represented by proxy at a special meeting of the holders of Africa Oil shares to be called to consider the Proposed Reorganization that is expected to be held during October 2024.

Each of the directors and officers of Africa Oil have agreed to vote their Africa Oil shares in favor of the Proposed Reorganization at the Africa Oil shareholder meeting pursuant to voting support agreements, subject to customary exceptions.

Board Composition

On completion of the Proposed Reorganization, the Board will be comprised of nine directors, three of whom will be nominated by BTG Oil & Gas. The enlarged Africa Oil will continue to be led by Dr. Roger Tucker as the Chief Executive Officer and a member of the Board. It is expected that Huw Jenkins will be one of BTG Oil & Gas' nominated directors and will also take on the role of non-executive Chair. Following completion, the Africa Oil Board will be comprised of:

the Chief Executive Officer of Africa Oil;

three independent non-executive directors nominated by Africa Oil;

three non-executive directors nominated by BTG Oil & Gas (including Huw Jenkins as non-executive Chair); and

two additional independent non-executive directors mutually agreed between Africa Oil and BTG Oil & Gas.

Further details on the non-executive directors and executive management team will be provided in due course.

Listing and Headquarters

Africa Oil's shares will continue to be listed on the TSX and NASDAQ Stockholm, post completion.

The existing London office of Africa Oil will serve as the headquarters of the combined business. Africa Oil expects to retain the Rotterdam office of Prime post completion.

The Enlarged Africa Oil Capital Allocation Framework

The Proposed Reorganization will enable the enlarged Africa Oil to put in place a more robust capital allocation framework (the "Enhanced Capital Framework") that the Board believes will be more sustainable across oil and gas price cycles and which will provide shareholders of the enlarged Africa Oil with greater visibility and certainty over the use of capital.

The Enhanced Capital Framework, to be implemented post completion, envisages the following capital priorities:

Maintenance of a US$150 million liquidity position.

Maintenance of a twelve-month trailing ratio of Net Debt6 / EBITDAX7 of no more than 1.0x.

Base Dividend that is deemed sustainable by the Board in a range of conservative oil price scenarios.

Distribution to shareholders of at least 50 per cent. of excess annual free cash flow after the Base Dividend has been paid in the form of supplemental dividends and/or share repurchases ("Supplemental Shareholder Returns") (with the Base Dividend and Supplemental Shareholder Returns collectively being the "Shareholder Distributions Policy").

Capex to be prioritized in the following order: (i) first, to increase short-cycle production growth, (ii) second, for development of future production and (iii) third, for exploration, limited to a small percentage of total annual capex.

BTG Oil & Gas Governance Provisions under Investor Rights Agreement

As part of the Proposed Reorganization, Africa Oil and BTG Oil & Gas have entered into an investor rights agreement (the "Investor Rights Agreement") that provides BTG Oil & Gas with certain Board appointment rights based on specific thresholds of BTG Oil & Gas' continued shareholding in the enlarged Africa Oil. Under this agreement, BTG Oil & Gas will have the right to appoint three non-executive directors to the Board, one of whom will be the non-executive Chair, if BTG Oil & Gas' shareholding is 30 per cent. or greater, reducing to two non-executive directors if BTG Oil & Gas' shareholding is 20 per cent. or greater but less than 30 per cent., and further reducing to one non-executive director if BTG Oil & Gas' shareholding is less than 20 per cent. but at least 10 per cent. BTG Oil & Gas will not have any Board appointment rights under the Investor Rights Agreement if its shareholding reduces to less than 10 per cent.

It is the Company's intention that the Board of Africa Oil will comprise at all times a majority of independent non-executive directors and that each Board committee will have a majority of independent non-executive directors. Subject to applicable law, BTG Oil & Gas will have the right to have one of its Board nominees as a member of each Board committee.

The Investor Rights Agreement (including the additional provisions below) will be automatically terminated if (i) the Amalgamation Agreement is terminated in accordance with its terms or (ii) following completion of the Proposed Reorganization, BTG Oil & Gas' shareholding in the enlarged Africa Oil falls below 10 per cent.

Additional Provisions of the Investor Rights Agreement

BTG Oil & Gas Lockup and Standstill

BTG Oil & Gas has agreed to certain lockup and standstill provisions as part of the Investor Rights Agreement. These stipulate that for a period of two years from the date of completion BTG Oil & Gas will not, without prior approval from the non-BTG Oil & Gas nominated directors, be entitled to:

sell the Africa Oil common shares received in connection with the Proposed Reorganization (and any additional Africa Oil common shares it may acquire as a result of certain participation rights provided to BTG Oil & Gas in the Investor Rights Agreement), subject to certain exceptions, or be entitled to increase its stake in the enlarged Africa Oil to more than 50 per cent.; or

enter into a voting arrangement or similar agreement with a third party regarding its Africa Oil shares if, when any holdings by such third party and its joint actors are aggregated with BTG Oil & Gas' ownership would exceed a 50 per cent. shareholding in the enlarged Africa Oil; or

make, assist, encourage or facilitate a tender offer that would result in the offeror owning 50 per cent. or more of the enlarged Africa Oil; or

initiate any proxy contest, put forth any shareholder proposal, or vote against Africa Oil Board nominees for election as directors, save that BTG Oil & Gas and its affiliates shall otherwise be free to exercise the votes attaching to their shares in the enlarged Africa Oil at their discretion.

Africa Oil to be BTG Oil & Gas' Preferred Investment Vehicle for Upstream Investments in Africa

Provided that BTG Oil & Gas' shareholding does not fall below 20 per cent. (in which case the first look right shall cease) and subject to other customary limitations, BTG Oil & Gas has agreed to give the enlarged Africa Oil a first look at potential equity investments in upstream oil and gas assets and companies BTG Oil & Gas or its affiliates considers in Africa, whether generated by BTG Oil & Gas or its affiliates internally or referred to BTG Oil & Gas or its affiliates by third parties. If the enlarged Africa Oil turns down said opportunity, BTG Oil & Gas can move forward with it by itself or through another entity.

BTG Oil & Gas Consents Relating to Shareholder Distributions, Share Issuances and Significant Merger and Acquisition Transactions

Provided that BTG Oil & Gas' shareholding does not fall below 20 per cent. for a period of more than 150 days (in which case the following consent rights shall terminate), the enlarged Africa Oil will require the consent of BTG Oil & Gas for the following significant decisions:

Changes to the Company's Shareholder Distributions Policy (as outlined above) or declaring or paying dividends or other distributions other than in accordance with the Shareholder Distributions Policy.

Issuance of new shares at more than a 10 per cent. discount to the prevailing 30 day volume weighted average share price.

Issuance of new shares representing 20 per cent. or more of the outstanding issued share capital.

A merger or an acquisition (or similar transaction) with transaction consideration (including any assumed debt) greater than 25 per cent. of the market capitalization of the enlarged Africa Oil (to be calculated with reference to the prevailing 30 trading day volume weighted average share price). For the avoidance of doubt, this shall not apply to or restrict an acquisition of issued and outstanding securities of the enlarged Africa Oil by a third party in exchange for consideration paid by such third party.

BTG Oil & Gas Information and Registration Rights

The Investor Rights Agreement contains customary information, inspection, participation and registration rights for BTG Oil & Gas.

Further Information

Further information regarding the Proposed Reorganization, the Amalgamation Agreement and the shareholders' meeting, will be included in a management information circular that will be mailed to shareholders of record in advance of the shareholder meeting. Copies of the Amalgamation Agreement, the forms of voting support agreements, the Investor Rights Agreement and proxy materials in respect of the shareholders' meeting will be available on SEDAR+ at www.sedarplus.com.

Conditions to Completion

As noted above, the Proposed Reorganization is expected to close during or before the third quarter of 2025. Completion is subject to customary closing conditions, including:

approval by the shareholders of Africa Oil;

completion of the farm-out of Africa Oil's Namibian interests (held via Impact) to TotalEnergies;

approval by the TSX, including approval for listing of the Africa Oil shares to be issued in connection with the Proposed Reorganization and the appointment of the BTG Oil & Gas-nominated directors to the Board;

receipt of certain regulatory consents and approvals in Nigeria; and

completion of a pre-agreed pre-completion reorganization of the holding structure of BTG Holding to implement the Amalgamation Agreement.

Advisors

Evercore is acting as exclusive financial advisor to Africa Oil in relation to the Proposed Reorganization. Bracewell (UK) LLP, Torys LLP, Gernandt & Danielsson Advokatbyrå, Loyens & Loeff N.V. and Banwo & Ighodalo are serving as legal counsel to Africa Oil. Stifel is Africa Oil's corporate broker.

BTG Oil & Gas is being advised by Herbert Smith Freehills LLP, Blake, Cassels & Graydon LLP, Templars and Baker & McKenzie LLP.

Management Presentation

Senior management of Africa Oil will host a presentation on the Proposed Reorganization today, June 24, 2024 at 09:00 (EDT) / 14:00 (BST) / 15:00 (CEST).

Why not defend our share price Africa Oil? You could accomplish more by a reverse split and save money. Where are you?

Africa Oil Corporation: Buy The Punished Small Cap
May 28, 2024 8:14 AM ETAfrica Oil Corp. (AOIFF) Stock,
The Value Portfolio
Investing Group Leader
Summary

" Africa Oil Corporation has been punished by the market as a small cap oil company as prices have dropped.
The company has incredibly strong cash flow with the potential for additional developments in Nigeria.
Over the next few years, we expect the company to grow production, generating substantial long-term shareholder returns.
I am The Value Portfolio, an experienced analyst specializing in stock research and wealth growth. I run the investing group The Retirement Forum where I focus on ideas to prepare you for retirement.

Vibrant Sunset Sky Behind an Offshore Oil Drilling Rig off the Coast of Orange County, California

Jeremy Poland

Africa Oil Corporation (OTCMKTS: OTCPK:AOIFF) is a small-cap oil company, with a market capitalization of $800 million. The company has worked to steadily improve its balance sheet, ditching its original Kenyan asset that struggled to move towards completion, and acquiring Prime Oil and Gas along with numerous other exploratory stakes.

As we'll see throughout this article, despite recent share price weakness, the company has both strong current cash flow and numerous catalysts.
Follow Up

We last discussed the company prior to its most recent earnings, which the company just announced.

Since then, the company has announced relatively modest earnings, from its side, influenced by the fact that it did not receive any dividends from Prime Oil and Gas during the quarter. However, as we'll see throughout this article, the company has continued to focus on shareholder returns, especially through buybacks, while expanding its overall assets.

The company's earnings, combined with its strong cash flow, and exciting long-term assets, help support the thesis for a long-term investment.
Africa Oil and Gas Developments

The company was completely reoriented roughly a year ago, and since then, it has focused on new developments.

Africa Oil Corporation Investor Presentation

The company has increased its operating working interest in the Orange Basin in South Africa, and participated in a $40m equity placement by Impact. The company also recently implemented a strategic farm down agreement for Impact's blocks in Namibia. It's achieved farmouts for its most exciting assets, and it's made an offer to purchase an additional 8% of Impact.

The company is de-risking its growth profile. Its maintained base dividend and NCIB share buyback program will enable strong shareholder returns as it continues to chase growth opportunities.
Africa Oil and Gas Nigeria

Africa Oil Corporation is working to expand in Nigeria, with Preowei, a low-risk development project.

Africa Oil Corporation Investor Presentation

The company has continued to drill additional infill wells in Egina, with more than 5k barrels / day of production and additional 4D seismic. In Akpo, the company has continued to test better than expected results, with the potential to pass 7k barrels / day after re-start. In Preowei, the company is expecting a potential 2027 start-up with >65k barrels / day in peak production.

That will help to maintain the asset for the long-term, with continued production and shareholder returns.
Africa Oil Corporation Namibia

Among the company's most significant assets, is the Venus discovery in Namibia, which is being developed by TotalEnergies.

Africa Oil Corporation Investor Presentation

The asset is expected to have 1-2 billion barrels, and TotalEnergies CEO is expecting to explore. The potential upside is billions of additional barrels and the company has numerous catalysts for growth. Ongoing operations are continuing with 3D seismic, and we expect a development to come online here before the end of the decade.

Africa Oil Corporation is working to expand its stake, and TotalEnergies is looking to do the same. We are excited to see how the asset turns out and the farmout agreement will be a strong benefit.
Africa Oil Corporation Financial Picture

Africa Oil Corporation expects to utilize its financials to be able to drive substantial shareholder returns.

Africa Oil Corporation Investor Presentation

The company had barely any net income, with no dividends from Prime Oil and Gas. However, Prime Oil and Gas still had more than $80 million in CFFO for the quarter and almost $100 million in EBITDAX. Africa Oil Corporation still has an almost $200 million cash balance, and counting Prime Oil and Gas, the combined net debt is just a hair under $50 million.

The company spent $25 million in shareholder returns for the quarter, counting dividends and share buybacks. That means double-digit shareholder returns through dividends and share buybacks. The company has a dividend that it can comfortably afford. We expect future quarters to continue to have strong net cash generation and dividends from Prime Oil and Gas.

Africa Oil Corporation Investor Presentation

The above highlights Africa Oil Corporation's goals. The company plans to maintain leverage at <1.0x and its dividend is ~3% annualized. The company has a strong cash buffer as it continues to invest and it plans to re-finance Prime Oil and Gas' debt, which will substantially help its balance sheet. The company is well positioned here.

After that, the company plans to continue chasing organic growth. The company is looking for short-duration production for the next several years, and plans to have development in Namibia and South Africa, with fully funded carries, that will continue through the end of the decade. The company is planning to mostly maintain its dividend with potential special dividends.

We'd like to see the company chase share buybacks as it continues to ramp up production to generate long-term returns.
Thesis Risk

The largest risk to our thesis is that Africa Oil Corporation needs to continue finding new sources of production and development them in a world where climate change is a massive risk. That's a risky proposition, and its ability to continue driving shareholder returns remains a risk worth paying close attention to.

Conclusion

Africa Oil Corporation has an impressive portfolio of assets. The company has seen its share price punished, however, as small-cap oil companies have been punished more than larger companies. That, combined with Brent just a hair over $80 / barrel, means that Africa Oil Corporation continues to generate substantial shareholder returns despite the market punishment.

The company has numerous incredibly exciting assets worth paying close attention to. Not only are the company's existing assets generating strong cash flow, but the company has numerous assets that could
startup over the next several years. That could help generate substantial shareholder returns with dividends and buybacks, making Africa Oil Corporation a valuable investment.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks."

The maps that Pancon is using is difficult for me to interpret. I hope it "pans" out for you. At this point, quoting Abraham Lincoln, "I find myself on my knees a lot because I have nowhere else to go."

Agreed Scarbender.

Yes it is disapponting that they can say very little about their assets because they are the JV and can't say what they may know until the operator releases the information.

I think the Orange basin is one of the major future sources of world oil. Sure hope that Pancontinental pops soon. From the maps that pancon has released they seem to be at the sweet spot of the basin and Venus is on the southwest side.

Listened to the Conference call this AM. Not impressive. Disjointed. Started with someone asking questions that were poorly formed. Took about 20 minutes of time. Management team is very positive in the future of the underlying assets. No near term estimates as to earnings. Limited guidance as to when underlying assets will become operational and cash flowing. AOC has limitations on what they can say ( as to their JV investments) as they are not in control of information flow. Very poorly run conference IMO. A nothing burger performance. Will hold this stock for 90 to 180 days. Then see what will be.

Thanks douginil. Looking forward to good guidance. Hope the audio is better.

AFRICA OIL ANNUAL GENERAL MEETING WEBCAST AND CONFERENCE CALL DETAILS

VANCOUVER, BC, May 16, 2024 /CNW/ - (TSX: AOI) (Nasdaq-Stockholm: AOI) – Africa Oil Corp. ("Africa Oil", "AOC" or the "Company") will hold its Annual General Meeting of Shareholders on Thursday, May 23, 2024, at 09:00 (PDT) / 12:00 (EDT) / 18:00 (CEST) at Bennett Jones LLP Fraser Boardroom, Park Place, 666 Burrard Street, Suite 2500, Vancouver V6C 2X8. View PDF

Following conclusion of the formal business of the Annual General Meeting, Executive Management and Chairman of the Board are available to answer shareholders' questions. Shareholders that are unable to attend in person can follow the meeting via webcast or conference call facility on the details shown below. Please note that shareholders joining remotely are unable to vote during the meeting using the webcast and conference call facility.

Shareholders can submit written question using the webcast facility or ask questions using the conference call facility. Those shareholders wishing to ask a question using the telephone facility are requested to send an email to events@africaoilcorp.com and register their name and email address prior to the meeting. Â

Participants should use the following link to register for the live webcast:

https://edge.media-server.com/mmc/p/vmuimsbi

Participants can join via telephone with the instructions available on the following link:

https://register.vevent.com/register/BI788a546a29ba461599bcb2f44bd7a5c9

Click on the call link and complete the online registration form.
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.
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.

YESSS!!! ER all systems go!!

Agreed Farrell90

Old but important (Jan 2024)

AFRICA OIL CORP.
2024 STRATEGIC PRIORITIES
Impact Farmout Transaction | Management Presentation, January 2024
SLIDE 9
• Consolidate, streamline and financially de-risk portfolio
- Consolidation of core assets and streamlining the business
- Farmout processes ongoing for Block 3B/4B, EG-31 and EG-18
• Shareholder capital returns
- Trading at significant discount to the underlying value
- NCIB plan in place and ready to be deployed
• Increased financial flexibility to accelerate growth
- Opportunity rich organic portfolio
- Disciplined and financially accretive M&A
• Maintain balance sheet strength

OT Not directly but the successful drilling by Total.Shell and now Galp will raise the value of all the Namibian and South African blocks.

I am still optimistic about AOIFF. The Egina projects are all doing well and the rest of the South west African blocks all look promising.

GLTA Farrell

Thanks farrell90. Wonder if there is anything there for AOC?

Galp seeks to sell 50% of its share in PEL 38 to a large international oil company to assist in development of what is estimated to be a 10 billion barrell field.

https://www.reuters.com/markets/deals/galp-seeks-sell-stake-namibia-oilfield-after-discovery-sources-say-2024-04-22/

Farrell

Well!! We are in the Right Neighborhood!

By Sergio Goncalves

LISBON (Reuters) - Portuguese oil company Galp Energia said on Sunday it had concluded the first phase of exploration in the Mopane field off the coast of Namibia and estimated it could have at least 10 billion barrels of oil.

Galp said it conducted testing operations at the Mopane-1X well in January and the Mopane-2X well in March. In both wells, which are 8 kilometres apart, it said "significant light oil columns were discovered in high-quality reservoir sands".

The Mopane field is located in the Orange Basin, along the coast of the southern African country, where Shell and France's TotalEnergies have made several oil and gas discoveries.

Galp said flows achieved during the tests reached the maximum allowed limit of 14 thousand barrels per day, potentially positioning Mopane as an important commercial discovery.

"In the Mopane complex alone, and before drilling additional exploration and appraisal wells, hydrocarbon in-place estimates are 10 billion barrels of oil equivalent, or higher", Galp said.
Galp Energia, SGPS, S.A. (GALP.LS)

Galp holds an 80% stake in Petroleum Exploration Licence 83 (PEL 83), which covers an area of almost 10,000 square kilometres in the Orange Basin.

Namibia could become a new source of revenue for Galp, which currently has strong investments off the coast of Brazil and is also present in a natural gas project in Mozambique's Rovuma basin.

Galp has previously indicated it could launch a process to attract other investors to its projects in Namibia, as they could reach a large scale.

The OPEC+ oil producers group, having lost Angola and other players in recent years, is eyeing Namibia for possible membership as it sets up what could be Africa’s fourth-largest output by the next decade, an African industry official told Reuters.

Guys: Go to the AOC website and look up the latest presentation on the town hall meeting in Sweden. Looking good.

Apr. 11, 2024 3:49 PM ETAfrica Oil Corp. (AOIFF) Stock, AOI:CA Stock3
The Value Portfolio profile picture
Investing Group Leader
Summary

"Africa Oil Corp. has been aggressively repurchasing shares, indicating strong shareholder returns.
The company's renewal of OML 130 and development of world-class assets like Venus contribute to its strong performance.
Africa Oil Corporation aims to maintain a strong balance sheet and provide future growth in production through strategic asset growth.
I am The Value Portfolio, an experienced analyst specializing in stock research and wealth growth. I run the investing group The Retirement Forum where I focus on ideas to prepare you for retirement.

Africa Oil Corp. (OTCPK:AOIFF) is a small-to-mid capitalization oil company with a market capitalization of around $870 million. The company has been aggressively repurchasing shares, and has repurchased almost 9 million in shares since it started the program in early December 2023. As we'll see throughout this article, the company's cash flow, combined with future assets, means strong shareholder returns for investors with a long horizon.

Africa Oil Corporation 2023 Highlights

Africa Oil Corporation had a strong 2023 that will enable continued shareholder returns.

Africa Oil Corporation Investor Presentation

The biggest deal was the company's renewal of OML 130, which added 20 years and enabled the company to refinance Prime Oil and Gas' debt. This enables the company to make Prime Oil and Gas a cash flow machine, providing reliable cash flow as it scales up other assets. The company hit the midpoint of its guidance and has continued to appraise some world-class assets.

The company is working to maintain a strong balance sheet and provide shareholder returns. It's also working to develop world-class assets such as Venus, which will provide future growth in production.
Africa Oil Corporation early-2024 Performance

The company has had a strong start to 2024, showing its continued performance, as we discussed with share buybacks above.

Africa Oil Corporation Investor Presentation

The biggest deal here is a strategic Impact farm down agreement. This is related to the Venus discovery and the offshore Namibia assets. This will cover all costs through the first production and provide a $100 million reimbursement. Africa Oil Corporation has a 3% stake in these two blocks, which could provide hundreds of thousands of barrels/day in production.

The company has continued to have strong exploration success, especially in Block 3B/4B, where another farm-out agreement could be significant. It's also seen the Akpo West Production start-up, which will add 14k bopd of production. The company has a number of exciting catalysts over the upcoming years that will support growth in attributable production.

Africa Oil Corporation Strategic Asset Growth

Let's delve deeper into Africa Oil Corporation and some of the company's most exciting assets.

Africa Oil Corporation Investor Presentation

The Orange Basin is among the company's most exciting assets as a new petroleum province emerges. The company has stakes in both 2913B/2912 in Namibia and Block 3B/4B in South Africa. The Mangetti discovery is expected to be a third of the size of Venus. Block 3B/4B is particularly exciting due to the size of Africa Oil Corporation's stake.

The asset is on trend with the Namibian oil discoveries and drilling could start a 2025. A farm-out agreement here could be completely game-changing for the company.

Africa Oil Corporation Investor Presentation

This shows the company's goals for 2024 and where it is. The company is excelling across its set of goals. The most important catalyst for the company is being able to secure a farm-out agreement for Block 3B/4B and the company's other assets here. A farm-out agreement given the company's stake there could be a game changer.

Africa Oil Corporation Shareholder Returns

The company is focused on using its existing cash flow for shareholder returns.

Africa Oil Corporation Investor Presentation

The company has given 2024 guidance that is slightly below 2023 guidance. WI production is expected to be at 18k boepd, down almost 10% from the company's 2023 guidance. More importantly, the company's capital investment is expected to be dramatically higher at $115 million, up from $62 million in 2023 as the company continues to grow.

The company has returned $100 million to shareholders since 2022, a double-digit return in two years. The company has continued to pay a $0.05 / share dividend annually, a ~2.7% dividend yield. The company has already repurchased ~11% of its 2024 share buyback limit, and we'd like to see it use its cash flow to ramp that up.

The company is guiding for $160 million in free cash flow, or FCF, which is a hefty double-digit FCF that will enable strong shareholder returns after continued investment. That makes Africa Oil Corporation a strong investment opportunity.
Thesis Risk

The largest risk to our thesis is crude oil prices. Brent is at more than $90 / barrel, and that's supporting the company's share price and returns. However, there's no guarantee that prices remain high, especially with long-term structural impacts. That could hurt Africa Oil Corporation on the multi-year timeline it needs to develop its next-generation assets.

Conclusion

Africa Oil Corporation has an impressive portfolio of assets. The company has seen its share price go up some in a strong oil price environment, but it does continue to face long-term risks from a potential decline in crude oil prices. The company has numerous exciting assets within its portfolio; however, it needs multiple years to ramp them up.

The company has achieved a massive accomplishment with a farm-out deal for Namibia 2912/2913B. The biggest thing the company could accomplish this year is a farm-out deal for Block 3B/4B, given the company's hefty positioning in those fields. That combined with future drilling could enable hefty long-term shareholder returns. Please let us know your thoughts in the comments below.

LOL...We're in the same boat. Had to unload about 10K at $1.56 to $1.80.. Bummer!

Yes it is nice to see the increase. Unfortunately 2-3 weeks ago I had to raise some funds and had to trade in the US$1.65 range.

Yeah Farrell...With AOC continuing the buyback plus oil prices climbing, we are seeing a good 30 day move up.I hope the May 10-134 ER shows us something including a divi from Prime...