Africa Oil Expects to Complete Reorganization This Month

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Africa Oil Expects to Complete Reorganization This Month

Africa Oil Corp. expects to complete the full takeover of Prime Oil & Gas Coöperatief UA, a 50-50 venture with BTG Pactual Oil & Gas S.a.r.l. (BTG Oil & Gas), in March, earlier than the third quarter as initially expected. All of the current production of Vancouver, Canada-based Africa Oil, which explores and develops oil and gas […]

All of the current production of Vancouver, Canada-based Africa Oil, which explores and develops oil and gas in Africa, comes from Prime. Netherlands-registered Prime holds stakes offshore Nigeria.

Africa Oil Corp. and BTG Oil & Gas, registered in Luxembourg, are consolidating their shareholdings in Prime so that Africa Oil will become a 100 percent owner while BTG Oil & Gas will receive 35.5 percent of the shares of the enlarged Africa Oil, in a transaction announced June 24, 2024.

Africa Oil shareholders voted in favor of the consolidation October 15, 2024.

“The Proposed Reorganization will position the Company to significantly increase its annual dividend distribution to at least $100 million 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”, Africa Oil said in its annual report for 2024.

Prime produced 270,300 barrels of oil equivalent a day (boed) in the fourth quarter (Q4), down from 296,700 in the same three-month period 2023 “primarily due to the expected natural reservoir decline across all assets”, Africa Oil said.

Of the gross volume, Africa Oil’s share was 17,200 boed in working interest production and 19,500 in entitlement production. “Entitlement production is calculated using the economic interest methodology and includes cost oil, profit oil, tax oil and royalty oil”, it explained. “It differs from WI production which is calculated based on field volumes multiplied by Prime’s effective WI in each Block”.

Africa Oil reported zero net oil sold in the October-December 2024 quarter. It sold 2.5 billion cubic feet (Bcf) of natural gas, down from 2.4 Bcf in Q4 2023.

Africa Oil logged $2.2 million in revenue and $36.2 million in gross profit, down from Q4 2023’s $173.6 million and $70.5 million respectively.

Cash flow from operations was $29.3 million, down from $43.9 million for Q4 2023. Free cash flow stood at $8.8 million, down from $16.7 million.

Earnings before interest, taxes, depreciation and impairment, amortization and exploration expenses totaled $242.3 million, up from $112.3 million for Q4 2023.

Africa Oil logged $6.2 million in net profit for Q4 2024, compared to a net loss of $88.8 million for Q4 2023. However, Q4 2024 had an adjusted net loss of $3.2 million, compared to an adjusted net income of $4.9 million for Q4 2023, primarily due to higher general and administrative expenses according to the company.

It had $61.4 million in cash and cash equivalents at the end of 2024.

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