Uche Cecil Izuora
Africa Oil Corp. has published its financial and operating results for the three and twelve months ended December 31, 2024.
The Company also announces the imminent completion of the amalgamation to consolidate all the Prime Oil & Gas Coöperatief U.A shareholding in Africa Oil.
Africa Oil President and CEO, Roger Tucker commented: “2024 was a transformative year for the Company as we executed several strategic initiatives that have simplified and strengthened the fundamental business proposition.
It was also a year in which we returned a record $67.9 million to our shareholders, a trend that will continue following the impending completion of the Prime consolidation. This transformational milestone will significantly enhance our scale, financial strength, and ability to deliver meaningful shareholder value.
The enlarged Africa Oil will benefit from robust long-term free cash flows and a strong balance sheet with low leverage. We will have direct interests in producing assets in Nigeria, complemented by funded development and exploration projects in the prolific Orange Basin.
These pillars position us to implement steady and predictable shareholder returns and to pursue new growth opportunities focused on producing assets in a disciplined manner.”
The completion of the Proposed Reorganization is expected on or about March 7, 2025, a strategic milestone to double the Company’s reserves and production and allowing it to take direct control of Prime’s cash flows and balance sheet.
The Proposed Reorganization will position the Company to significantly increase its annual base dividend distribution to at least $100 million (U.S. Dollars) or approximately $0.15 per share (assuming pro-forma issued and outstanding share count of ~675 million), which is approximately 3x the current annual base distribution of $0.05 per share, subject to customary board approval and consents.
The Company intends to declare the first quarterly dividend of $25 million or approximately $0.037 per share on the completion of the Proposed Reorganisation, subject to customary board approval and consents.
During 2024, the Company returned $67.9 million to its shareholders through the base dividend policy and share buybacks, the highest annual capital return in its history.
During 2024, the Company materially increased its shareholding in Impact to 39.5 per cent from 31.1 per cent at a total cost of approximately $88.6 million, enhancing the Company’s influence and control over a core strategic asset and value driver in the Namibian Orange Basin, containing the Venus field.
Significant year-end 2024 combined AOC and Prime (100% basis) cash balance of $460.9 million.
Post year-end 2024 received a $31.6 million dividend from Impact Oil & Gas Limited.
According to the firm, the Agbami field in Nigeria, performed in line with expectations throughout 2024. Planned maintenance on one of the three compressors commenced at the end of Q4 2024 and continued into Q1 2025. The remaining two compressors will also be overhauled over the coming 2 years to maintain high equipment uptime.
Processing of the 4D-M3 seismic acquired in Q3 2024 is underway and other preparations for the next drilling campaign, scheduled for 2026, are continuing as planned. A planned full-field shut down for maintenance activities is scheduled for Q4 2025.
The Egina field completed the year above the production plan thanks to its high production efficiency and successful well interventions during Q3 2024 and Q4 2024. Well planning for a 2025 drilling program based on the 4D-M2 acquired in Q2 2024 is ongoing with drilling commencing in Q1 2025.
The Akpo field ended the year with production rates in line with those at the start of 2024, primarily due to the Akpo West wells performing above expectation and the infill well on Akpo main offsetting natural decline in the field.
A total of 3 new producers and 1 new injector were completed and tied back to the Akpo FPSO in 2024. Overall, for 2024, production was below the production plan due to drilling delays pushing the expected production gains from drilling to the second half of the year. Well planning for additional infill drilling, based on the 4D-M4 seismic acquired in Q1 2024, and potential near field exploration are underway.
The 2023 and 2024 Egina and Akpo drilling campaign was paused in November 2024 to allow time to mature drilling opportunities from the 2024 seismic acquisition campaigns. The 2025 campaign kicked off in January 2025 as planned.
Progress on phase 2 of the Preowei Field front end engineering design (“FEED”) is now subject to further cost optimization and the results of ongoing field development studies on the basis of the 4D baseline seismic acquisition acquired in Q2 2024. These work streams are aimed at supporting an FID decision on the project and enabling Engineering, Procurement, Construction and Installation.