VANCOUVER, Nov. 13, 2018 /CNW/ - (AOI–TSX,
AOI–Nasdaq-Stockholm) … Africa Oil Corp. ("Africa Oil" or the
"Company") is pleased to announce its financial and operating
results for the three and nine months ended September 30, 2018. View PDF version
HIGHLIGHTS:
- The Company ended Q3 2018 with cash of $380.1 million and working capital of
$371.5 million;
- Cash increased by $10.6 million
during Q3 2018, primarily due to receiving the third $18.75 million quarterly advance development
carry payment from Total. The fourth and final $18.75 million advance carry payment is expected
in Q4 2018;
- Operational activity continues to be focused in the South
Lokichar basin (Blocks 10BB and 13T – Kenya). Work has continued in both the Amosing
and Ngamia fields, with water injection testing ongoing at
Ngamia-11 and continued oil production from the Ngamia-8 well. The
Ngamia-3 well also successfully started production in June 2018. The produced oil from testing has been
stored in the field. A comprehensive review of results from this
program commenced in the third quarter of 2018. To date, the
results are positive;
- The upstream and pipeline Front End Engineering and Design
(FEED) work associated with the South Lokichar development project
is progressing to plan and is expected to be completed in the first
quarter of 2019. Environmental and Social Impact Assessments are
also on schedule for submission to the regulators in the second
quarter of 2019;
- The transfer of stored crude oil from Turkana to Mombasa by
road continues, with four trucks continuing to be dispatched every
two days, transporting approximately 600 bopd. To date,
approximately 30,000 barrels of oil has been transported to
Mombasa. The volume of oil transported by truck is expected to
increase to 2,000 bopd once the Early Oil Production System is
fully operational and production testing commences from the Amosing
production facility. The first lifting of sweet Kenyan crude oil
stored in Mombasa is expected in the second quarter of 2019;
- The Kenya Joint Venture Partners (Blocks 10BB and 13T) continue
to negotiate key commercial Heads of Terms ("HOT's") with the
Government of Kenya, related to
agreements expected to establish the commercial structure
associated with field development;
- Subsequent to the end of the quarter the Company announced it
had entered into a share purchase agreement to acquire an effective
12.5% ownership interest in a company who holds interests in
multiple producing and developing fields offshore Nigeria (please refer to press release dated
31st October 2018).
Africa Oil Corp. has a 25% working interest in Blocks 10BB and
13T with Tullow Oil plc (50% and Operator) and TOTAL S.A. (25%)
holding the remaining interests.
2018 Third Quarter
Financial Results
|
(Thousands United
States Dollars, except Per Share Amounts)
|
(unaudited)
|
|
|
|
|
|
|
September 30,
2018
|
December 31,
2017
|
|
|
|
|
|
Cash and cash
equivalents
|
380,144
|
392,290
|
Total
assets
|
969,278
|
1,006,312
|
Total
liabilities
|
29,231
|
32,858
|
Total equity
attributable to common shareholders
|
940,047
|
973,454
|
Net working
capital
|
371,469
|
436,292
|
|
|
|
|
|
|
Three months
ended
September 30,
2018
|
Three months
ended
September 30,
2017
|
Nine months
ended
September 30,
2018
|
Nine months
ended
September 30,
2017
|
|
|
|
|
|
Operating
expenses
|
2,358
|
2,309
|
53,350
|
6,612
|
Net loss
|
323
|
944
|
48,493
|
3,735
|
Net loss per share
(basic and diluted)
|
0.00
|
0.00
|
0.10
|
0.01
|
Weighted average
number of shares outstanding
(basic and diluted) ('000s)
|
470,568
|
456,617
|
467,196
|
456,599
|
Number of shares
outstanding ('000s)
|
470,568
|
456,617
|
470,568
|
456,617
|
|
|
|
|
|
Cash flows provide by
(used in) operations
|
516
|
18
|
(10)
|
(757)
|
Cash flows provide by
(used in) investing
|
10,045
|
(13,053)
|
(11,558)
|
(38,195)
|
Cash flows provide by
(used in) financing
|
-
|
-
|
(568)
|
(249)
|
Total change in cash
and cash equivalents
|
10,567
|
(12,952)
|
(12,146)
|
(39,156)
|
|
|
|
|
|
Change in share
capital
|
-
|
-
|
14,333
|
407
|
Change in contributed
surplus
|
271
|
740
|
753
|
1,215
|
Change in
deficit
|
(323)
|
(944)
|
(48,493)
|
(3,735)
|
Total change in
equity
|
(52)
|
(204)
|
(33,407)
|
(2,113)
|
The financial information in this table was selected from the
Company's unaudited condensed interim consolidated financial
statements for the three and nine months ended September 30, 2018. The Company's consolidated
financial statements, notes to the financial statements,
management's discussion and analysis for the three and nine months
ended September 30, 2018 and 2017,
and the 2017 Annual Information Form have been filed on SEDAR
(www.sedar.com) and are available on the Company's website
(www.africaoilcorp.com).
FINANCIAL POSITION AND EARNINGS
The Company ended Q3 2018 with cash of $380.1 million and working capital of
$371.5 million in comparison to cash
of $392.3 million and working capital
of $436.3 million at the end of 2017.
Africa Oil is debt free. Investments in intangible exploration
expenditures of $8.9 million were
incurred during Q3 2018 ($30.2
million year to date in 2018). These expenditures relate
primarily to costs associated with appraisal activities and
developments studies related to the South Lokichar basin (Blocks
10BB and 13T Kenya). Offsetting
these expenditures, were advance development carry funds received
from Total of $18.75 million in Q3
2018 ($56.3 million year to date in
2018).
Operating expenses increased $46.7
million during the nine months ended September 30, 2018 compared to the same period in
2017. The Company recognized a $44.7
million impairment of intangible exploration assets during
the nine months ended September 30,
2018 relating to the relinquishment of Block 9 in
Kenya. Project evaluation expenses
increased $1.0 million during the
nine months ended September 30, 2018
due to costs associated with assessing potential Africa-related investment opportunities. The
Company recognized $1.1 million in
losses relating to the revaluation of Impact Oil and Gas Limited
("Impact") warrants, acquired during the first quarter of 2018. The
share of loss from equity investments increased $0.3 million during the nine months ended
September 30, 2018 compared to the
same period in 2017. This is due to the Company recognizing losses
from its investments in Africa Energy Corp. ("Africa Energy") and
Eco (Atlantic) Oil and Gas Ltd. ("Eco") which were offset by the
recognition of a gain from its investment in Impact. The Eco
investment was completed during November
2017 and the Impact investment was completed in March 2018. Travel expenses increased
$0.4 million due to an increase in
activities relating to business development and current operations.
Office and general increased $0.2
million during the nine months ended September 30, 2018 compared to the same period in
2017 which is primarily due to increased activity related to
current operations. Salaries and benefits increased $0.3 million during the nine months ended
September 30, 2018 compared to the
same period in 2017 due to the recovery of costs relating to the
secondment of an employee during 2017 as well as the addition of an
employee during the second quarter of 2018. Equity-based
compensation decreased $0.3 million
which can be mainly attributed to the decrease in the number and
fair value of stock options granted at the end of 2017. Donations
decreased as the Company made a donation of $0.9 million during the nine months ended
September 30, 2017 compared $ nil
during the same period in 2018.
Operating expenses were fairly consistent during the third
quarter of 2018 compared to the same period in 2017. Project
evaluation increased $0.3 million
during the third quarter of 2018 due to costs associated with
assessing potential Africa-related
investment opportunities. The Company recognized $0.4 million in losses relating to the
revaluation of Impact warrants acquired during the first quarter of
2018. The Company recognized a gain $0.4
million during the third quarter of 2018 compared to a loss
of $0.3 million during the same
period in 2017. This is due to the Company recognizing losses from
its investments in Africa Energy and Eco which was offset by the
recognition of a gain from its investment in Impact.
About Africa oil
Africa Oil Corp. is a Canadian oil and gas company with assets
in Kenya and Ethiopia. The Company is listed on the Toronto
Stock Exchange and on Nasdaq Stockholm under the symbol "AOI".
Additional Information
This information is information that Africa Oil Corp.is obliged
to make public pursuant to the EU Market Abuse Regulation. The
information was submitted for publication, through the agency of
the contact person set out below at 5:30
p.m. Eastern Time on November 13,
2018.
FORWARD LOOKING INFORMATION
Certain statements made and information contained herein
constitute "forward-looking information" (within the meaning of
applicable Canadian securities legislation). Such statements and
information (together, "forward looking statements") relate to
future events or the Company's future performance, business
prospects or opportunities. Forward-looking statements include, but
are not limited to, statements with respect to estimates of
reserves and or resources, future production levels, future capital
expenditures and their allocation to exploration and development
activities, future drilling and other exploration and development
activities, ultimate recovery of reserves or resources and dates by
which certain areas will be explored, developed or reach expected
operating capacity, that are based on forecasts of future results,
estimates of amounts not yet determinable and assumptions of
management.
All statements other than statements of historical fact may be
forward-looking statements. Statements concerning proven and
probable reserves and resource estimates may also be deemed to
constitute forward-looking statements and reflect conclusions that
are based on certain assumptions that the reserves and resources
can be economically exploited. Any statements that express or
involve discussions with respect to predictions, expectations,
beliefs, plans, projections, objectives, assumptions or future
events or performance (often, but not always, using words or
phrases such as "seek", "anticipate", "plan", "continue",
"estimate", "expect, "may", "will", "project", "predict",
"potential", "targeting", "intend", "could", "might", "should",
"believe" and similar expressions) are not statements of historical
fact and may be "forward-looking statements". Forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking
statements. The Company believes that the expectations reflected in
those forward-looking statements are reasonable, but no assurance
can be given that these expectations will prove to be correct and
such forward-looking statements should not be unduly relied upon.
The Company does not intend, and does not assume any obligation, to
update these forward-looking statements, except as required by
applicable laws. These forward-looking statements involve risks and
uncertainties relating to, among other things, changes in oil
prices, results of exploration and development activities,
uninsured risks, regulatory changes, defects in title, availability
of materials and equipment, timeliness of government or other
regulatory approvals, actual performance of facilities,
availability of financing on reasonable terms, availability of
third party service providers, equipment and processes relative to
specifications and expectations and unanticipated environmental
impacts on operations. Actual results may differ materially from
those expressed or implied by such forward-looking statements.
ON BEHALF OF THE BOARD
"Keith C. Hill"
President and CEO
SOURCE Africa Oil Corp.