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Africa Oil Corp. becomes cash positive less than two years after investment into Nigerian deep offshore

The Akpo FPSO on OML 130 in Nigeria produced an average of 87,500 barrels per day (bpd) between January and September this year.

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Africa Oil Corp.’s acquisition of a 50% interest in Petrobras Oil and Gas B.V (POGBV, now known as Prime) in 2020 for $520m is paying off. The Canadian independent has just become cash positive in Q3 2021, reporting a net cash position of over $15m.

The performance was made possible thanks to AOC’s exposure to some of Nigeria’s biggest deep-water fields. When the Canadian independent acquired a 50% interest of POGBV last year, it benefited from an indirect 8% interest in the Chevron-operated OML 127 and 16% indirect interest in the TotalEnergies-operated OML 130 offshore Nigeria. These blocks contain the Agbami, Akpo and Egina deepwater fields, three of the continent’s biggest producing assets.

Source: Africa Oil Corp.

AOC started earning dividends from Q1 2020 onwards and benefited this year from the strong rebound in oil prices and the gradual lifting of OPEC quotas. Its average daily working interest production stood at 27,500 barrels of oil equivalent per day (boepd) in Q3 2021, generating two dividends worth $112.5m from Prime during the period.

Since completing the acquisition of a 50% shareholding in Prime in January 2020, Africa Oil has already received nine dividends from Prime for a total amount of $350m.

As a result, AOC was able to significantly reduce its corporate debt facility to only $23m, up from $141m at the start of the year.

The company’s stock performance echoes that of its balance sheet. Its shares were trading at CAS$2.07 this morning, up from CAD$1.23 at the start of the year.

Details on Africa Oil Corp’s projects across Africa along with the company’s financial and operational performances are available in the “Companies” section within your Hawilti+ research terminal.

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In a statement issued earlier today, Conex Oil & Gas has announced taking over with immediate effect Total Liberia Inc. and Total Sierra Leone Ltd. Both entities have been renamed Conex Oil & Gas Liberia and Conex Oil & Gas Sierra Leone. The move follows the signing of agreements with TotalEnergies back in March 2020 for Conex to acquire the French major’s assets in both countries. These notably consist of a network of 63 service stations, general trade fuel sales and petroleum products import and storage operations. In parallel, Conex has completed construction of its 10,000 barrels per day (bpd) refinery in Liberia’s capital Monrovia. The facility was fabricated in Houston by VFuels Oil and Gas Engineering before being shipped and assembled in Liberia. The company is currently sourcing crude oil feedstock before starting up commercial operations.