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Africa Oil Corp. (“Africa Oil”, “AOC” or the “Company”) published its financial and operating results for the three months ended March 31, 2025, and is pleased to declare its second quarterly distribution of $25 million under its enlarged base dividend policy. Africa Oil President and CEO, Roger Tucker commented: “During the first quarter, Africa Oil significantly transformed its scale and structure by completing the Prime amalgamation. This strategic move has doubled our reserves and high-quality, high-netback production and underpins our new enlarged shareholder returns policy. We are now poised for the Company’s next phase of value creation by monetizing our world-class assets and delivering compelling shareholder returns, as we continue to grow into a leading independent E&P.” Highlights* • Closed the amalgamation transaction to take full control of Prime, doubling AOC’s reserves and production, and implemented a new policy to effectively triple dividend per share. • During Q1 2025 (presented as if the amalgamation had closed on January 1, 2025): o Achieved average daily working interest(1) (“WI”) and entitlement(2) production of 33,400 barrels of oil equivalent per day (“boepd”) and 37,700 boepd respectively, in line with expectations. o Sold five cargoes (approximately 5 million barrels) at an average sales price of $79.5/bbl versus an average Dated Brent for the same period of $75.7/bbl. o Recorded cashflow from operations(3,4) before working capital adjustment of $99.8 million. o Received a distribution of $31.6 million from Impact o Proactively reduced the RBL debt balance by $130.0 million to $620.0 million at the end of Q1 2025, reducing interest expenses. o End of Q1 2025 cash balance of $428.4 million, resulting in a net debt position of $191.6 million with a Net Debt/ EBITDAX(4) of 0.3x as at March 31, 2025. • During Q1 2025 with the amalgamation closing on March 19, 2025, recorded net income of $50.9 million ($0.11 per share5 ). • Post end of Q1 2025: o Distributed the first quarterly cash dividend of approximately $25.0 million ($0.0371 per share) in April 2025. o AOC’s Board has declared the second quarterly dividend of approximately $25.0 million ($0.0371 per share) payable in June 2025 to shareholders of record at the close of business on May 26, 2025. o The Company reduced the RBL debt balance by a further $80.0 million and has commenced the process to cancel its $65.0 million Corporate Facility, which remains undrawn. 2025 First Quarter Results Highlights The Company completed the Prime amalgamation on March 19, 2025. Constructed Prime information for purposes of explaining performance Constructed Prime information to explain performance is included in the following tables to present on a consolidated basis net income for Q1 2025, and cash flow statement for Q1 2025 as if the amalgamation had closed on January 1, 2025, whereby the Africa Oil interim condensed consolidated statement of net income and comprehensive income and the Africa Oil interim condensed consolidated statement of cash flows for Q1 2025 are combined with the Prime statement of net income and comprehensive income and the Prime statement of cash flows for the period until March 19, 2025. Adjustments are included to conform Prime financial information with Africa Oil accounting policies and for any transactions between Africa Oil and Prime prior to amalgamation for the purpose of presenting constructed Prime information to explain performance. Outlook Shareholder Returns The Company is pleased to announce that its Board has declared the distribution of the Company’s second 2025 quarterly cash dividend of approximately $25.0 million or $0.0371 per share. This dividend will be payable on June 11, 2025, to shareholders of record at the close of business on May 26, 2025. This dividend qualifies as an ‘eligible dividend’ for Canadian income tax purposes. Dividends for shares traded on the Toronto Stock Exchange (“TSX”) will be paid in Canadian dollars on June 11, 2025; however, all US and foreign shareholders will receive USD funds. Dividends for shares traded on Nasdaq Stockholm will be paid in Swedish Krona in accordance with Euroclear principles on June 16, 2025. To execute the payment of the dividend, a temporary administrative cross border transfer closure will be applied by Euroclear from May 22, 2025, up to and including May 26, 2025, during which period shares of the Company cannot be transferred between the TSX and Nasdaq Stockholm. Payment to shareholders who are not residents of Canada will be net of any Canadian withholding taxes that may be applicable. For further details, please visit: https://africaoilcorp.com/investorsummary/total-shareholder-returns/. Future dividend declarations are subject to customary Board approval and consents. Nigeria The Company remains focused on working with its JV partners to sustain and enhance production through targeted drilling and optimisation initiatives on its three producing fields in deepwater Nigeria. At Egina, two producers were drilled in Q1 2025 with both expected to come onstream in Q2 2025. On Akpo, a well intervention and the drilling of one development well are planned for Q2 2025. A planned break to the rig campaign is planned from Q4 2025 to allow for interpretation of the available 4D seismic data and drilled well results to enable maturation of future infill drilling candidates. The Company’s Nigerian portfolio includes infrastructure-led exploration assets that in case of commercial discovery success, could potentially present attractive short cycle, high return investment opportunities that would benefit from the existing facilities. One such opportunity, which is being progressed towards drilling is the Akpo Far East prospect with an unrisked, best estimate, gross field prospective resource volume of 143.6 MMboe. The targeted hydrocarbons are predicted to be light, high gas-oil ratio (“GOR”) oil equivalent to those found in the Akpo field. If successful, initial production could be achieved from existing production manifolds with the potential to materially increase reserves on the Akpo Field. At Agbami, further planned maintenance including a full field shutdown in Q4 2025, is expected to support long-term performance with 4D seismic interpretation continuing in support of the upcoming drilling campaign. Rig and well long lead items contracting is underway, alongside the placement of orders for subsea trees, in preparation for the commencement of the infill drilling campaign in 2027. For Preowei, studies of the fast-track seismic data are continuing to further derisk the identified upside opportunities to enhance recoverable volumes. In parallel, the reengagement of the front-end engineering and design (“FEED”) contractor is planned in order to carry out additional evaluation aimed at optimizing the Preowei engineering, procurement, construction and installation (“EPCI”) phase costs. Namibia Orange Basin Appraisal and Exploration Campaign The Venus Field is expected to be the first development area in Block 2913B. The Venus development plan is for up to 40 subsea wells tied back to a floating production, storage and offloading (“FPSO”) platform that can handle peak output of 160,000 barrels per day of oil. Key near-term project preparation and decision-making processes are: o Front-End Engineering Designs (“FEED”): Q2 – Q4 2025 o ESIA submission to authorities: Q4 2025 o Final Investment Decision (“FID”) could be made during H1 2026 The latest exploration drilling campaign was completed on April 25, 2025, with the drilling rig demobilized. The Company expects the next drilling campaign to commence during Q4 2025 and notes that TotalEnergies has publicly identified Olympe-1X, on Block 2912, as a possible target for this campaign. South Africa Orange Basin, Block 3B/4B Following the granting of an Environmental Authorization for exploration activities (drilling of up to 5 exploration wells) by the Department of Mineral Resources and Energy for the Republic of South Africa on September 16, 2024, the legislative notification and appeals process continues to progress with the relevant regulatory agencies. The operator has stated that with the approval process progressing the current plan is to drill the first exploration well on Block 3B/4B in 2026 and has identified Nayla, a prospect that lies in the northwest of the license area as the potential drilling target. Equatorial Guinea, EG-18 and EG-31 The Company is in active dialogue with industry parties to attract farm in parties on both blocks, with the aspiration of completing the exercise by the end of Q3 2025. If the Company is successful in attracting farminee partner(s) for these blocks, subject to customary consents and approvals including governmental and regulatory permissions, the Company anticipates that newly formed JVs could plan for exploration drilling in late 2026 or during 2027. However, there is no guarantee the Company can secure farminee partners on acceptable terms and it does not intend to undertake exploration drilling on a sole risk basis if it is unsuccessful in its farm down campaign. Summary of 2025 Management Guidance and Actuals The Company’s full-year 2025 Management Guidance is unchanged and is repeated here for completeness. These estimates are based on a 2025 average Brent price of $75.0 per barrel. At an average Brent price of $85.0 per barrel the mid-point of the cash flow from operations guidance range is estimated to increase by approximately 19%, and at an average of $65.0 per barrel the mid-point is estimated to decrease by approximately 12%. Management Conference Call Senior management will hold a conference call to discuss the results on Friday, May 16, 2025, at 09:00 (EST) / 14:00 (GMT) / 15:00 (CET). The conference call may be accessed by dial in or via webcast. Participants should use the following link to register for the live webcast: https://webcasting.buchanan.uk.com/broadcast/680f944fc26db8001247cb6f Participants can also join via telephone with the instructions available on the following link: https://url.de.m.mimecastprotect.com/s/FC-zC46A74ulzjgU3Hyc4JuC-?domain=urldefense.com 1. Click on the call link and complete the online registration form. 2. 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. |
