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


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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