Africa Oil Corp, has announced its financial and operating results for the three months ended June 30, 2021, and to provide selected results for Prime Oil and Gas Cooperatief UA a company in which Africa Oil has a 50 per cent equity interest.
Details of the report shows net income of $38.4 million in first half 2021 total of $77.3 million and end of quarter cash balance of $35.1 million.
The firm received a dividend for $37.5 million from Prime during the quarter and a further $37.5 million dividend in July.
On August 2, 2021, Africa Oil announced the closing of its corporate debt facility with $160 million committed. The Company utilized $98 million of this new facility to fully repay its BTG term loan with the undrawn balance of $62 million available to Africa Oil until May 2022. This can be utilized for general corporate purposes, subject to customary covenants.
At end of July 30, 2021, AOC had an approximate cash balance of $42 million and net debt of $56 million.
Selected Prime’s second quarter 2021 results net to Africa Oil’s 50 per cent shareholding with end of quarter cash position of $292.8 million that includes an amount of $152.5 million, which is 50 per cent of the security deposit received from Equinor in relation to the Agbami field.
There was a reported average daily working interest production of 28,100 barrels of oil equivalent per day (“boepd) and economic entitlement production of 30,500 boepd (84 per cent light and medium crude oil and 16 per cent conventional natural gas)2,3; and EBITDA4 of $155.1 million (first half 2021 total of $298.2 million) and cash flow from operations of $252.3 million (first half 2021 total of $338.2 million).
Post period, in July 2021, the OML 130 Gas Sales and Purchase Agreement was signed by Prime and all other parties, settling historical gas sales from July 2018. This will result in an additional $36 million of sales revenue with a net cash payment of $21 million expected in the third quarter 2021, in each case net to Africa Oil’s 50 per cent shareholding.
Field operational performance remains strong and was enhanced by the removal of production limitations on Egina due to OPEC constraints.
Africa Oil President and CEO Keith Hill commented: “We are going from strength to strength on the back of excellent operational performance and strong cash flows from our Nigerian assets. We have significantly deleveraged, reduced our cost of capital and improved liquidity. I am very pleased with the strong cash position in Prime at end of the second quarter, standing at $293 million net to our 50 per cent shareholding.
I am also encouraged by the initial positive indications of Nigeria’s Petroleum Industry Bill, which is expected to facilitate new project investments and support early license extensions.
Our Kenya project continues to gain momentum and we look forward to the drilling of two high impact exploration wells, Venus and Gazania, by end of the year. With the improved financial position, Africa Oil is considering the option to institute a shareholder capital return program by end of this year, which could include a dividend policy and/or share buyback program, subject to the necessary approvals.”