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"OIL COLUMN IS VERY BIG" Patrick Pouyane CEO of Total energies regarding offshore Namibia.
From Seeki9ing Alpha
Africa Oil Corp. (OTCPK:AOIFF) has had numerous things change recently. The company trades at a $1 billion USD valuation, despite all the changes recently. Specifically, its CEO is stepping down in several months. Additionally, after numerous years of turmoil, the company has withdrawn from Kenya, giving up its entire stake.
However, there have been other, much more exciting, developments, and as we'll see throughout this article, the company is a valuable investment.
Prime Oil and Gas
The company has had a number of major developments for Prime Oil and Gas. Among these is the company's announcement of a 20-year renewal of the company's OML 130 license. The company has an 8% shareholding here through its Prime Oil and Gas holding, and the new Petroleum Industry Act should help the company substantially.
From all of this together, the company has closed its Prime Oil and Gas refinancing. That has enabled Prime Oil and Gas to have the cash to pay out its first dividend of $62.5 million attributable to Africa Oil Corp. for the year, although we expect more dividends to come for the company. The new debt facility can be worth more than $1 billion within a 6-year timeframe.
That helps to indicate the strength of the asset.
The company's capital spending has increased as a result of OML 130 requirements. The company has completed its first infill wells and plans up to 9 more wells across Egina and Akpo. We expect the company to continue its aggressive growth here, with entitlement production for the company at more than 20 thousand barrels / day.
That production will enable increased returns.
Africa Oil Corp. Financial Positioning
The company's financial position remains strong, and it can utilize that to continue driving shareholder returns.
The company has continued to pay its annualized dividend of $0.05 / share. That's a dividend of more than 2%, one that the company can comfortably afford, and it costs the company <$25 million / year. The company's strong financial position has net debt of just $3.5 million, as the parent company has a substantial net cash position.
The company is clearly saving up cash, although we'd like to see more aggressive share buybacks. The company paid $31.4 million to maintain its post dilution stake in Impact Oil, using up some cash, but it's a number that the company can comfortably afford. We'd like to see continued investments in its business.
Africa Oil Corp.'s Catalysts
With strong financials, the company has a number of major catalysts.
TotalEnergies SE (TTE) is a major oil company with a market cap in the $10s of billions, and it's investing 50% of its 2023 exploration budget off the coast of Namibia. There's a new drillship arriving, and the company now has two drillships exploring this potentially incredibly valuable area. The Venus-1A is currently undergoing appraisal.
$300 million is being spent on appraising this discovery, which could hold billions of barrels of oil. The company has a stake of just over 6% here, and a first FPSO could conceivably be producing oil by the end of the decade in our view. 250k barrels / day from that FPSO could add 15k barrels / day in new attributable production for the company.
Combined with other blocks the company has in the region, the success of Venus could be an enormous success for the company.
Thesis Risk
The largest risk to our thesis is crude oil prices. The company is profitable even at current Brent prices of more than $70 / barrel. However, below that level its ability to drive returns becomes harder. That will result in the company generating returns that are insufficient to justify its valuation, making it a poor investment.
Conclusion
Africa Oil Corp. has had an incredibly busy month. First, its CEO announced that it was stepping down. That was after a number of tumultuous years, perhaps most signified by the company's final exit from its ambitions in Kenya. The cost to get the transportation off of the ground was just too much for the company.
The company has announced a 20-year extension for OML 130, enabling it to refinance the RBL. That has enabled a new dividend, and we expect additional dividends to continue. Each attributable dividend is 6% of Africa Oil Corp.'s market cap, and we expect several a year that translates to shareholder returns.
That, combined with the potential of Venus, makes the company a valuable investment.
NICE MOVE TODAY, BOYS...
Thanks douginil. I love the way they structured the purchase. Nice.
Northern Ocean's 'Deepsea Mira' Starts 300-Day Drilling Contract with TotalEnergies in Namibia
OE Staff June 28, 2023
©Odfjell Drilling
Offshore drilling rig owner Northern Ocean said Wednesday that its Deepsea Mira semi-submersible drilling rig had kicked off its drilling contract with TotalEnergies in Namibia, where the French oil major last year made a giant oil discovery with its Venus-1x well.
Northern Ocean said that its "...high specification semisubmersible drilling rig, has safely completed the transit to Namibia and commenced drilling activities under its contract with a TotalEnergies subsidiary.
The drilling rig is owned by Northern Ocean and managed by the Norwegian drilling firm Odfjell Drilling.
The contract with TotalEnergies has a firm duration of 300 days. TotalEnergies has two extension options, which, if exercised, would keep the 2019-built rig busy through all of 2024.
"Now that the Deepsea Mira has successfully commenced operations, the company has mitigated exposure to mobilization, reactivation, and other pre-commencement risks. Additionally, the company has amended the credit facility with Sterna Finance Ltd. to provide a new tranche in the amount of $50 million with a three-month tenor. This provides the company with sufficient time to normalize working capital from both rigs," Northern Ocean said.
The company's second rig is the Deepsea Bollsta. The semi-submersible unit has a contract with Shell Namibia until June 2024.
Namibia was placed on the global oil and gas exploration map last year with two giant oil discoveries by TotalEnergies (Venus) and Shell (Graff). In March 2023, Shell discovered oil at the Jonker-1X deep-water exploration well in PEL-39 Exploration License, offshore Namibia.
Earlier this week, TotalEnergies was named the upstream industry's most admired explorer and has received the Discovery of the Year award in Wood Mackenzie's annual Exploration Survey. TotalEnergies also received the Discovery of the Year award for Venus offshore Namibia, in partnership with QatarEnergy, Impact Oil & Gas, and NAMCOR.
Maggy Shino, Petroleum Commissioner at Namibia’s Ministry of Mines and Energy, said this week that, in Namibia, “we have an ongoing drilling campaign with three rigs currently busy drilling appraisal and exploration wells. We are expecting two more wells to be drilled before the end of 2023 in the deep waters.”
According to African Energy Chamber, Shino said that Namibia country is seeing a rise in seismic surveys, and by the end of the year, the government is planning to announcement a series of drilling projects that will take place during 2024.
Shino also said that the country is seeing heightened interest from global players, "owing largely to Namibia’s attractive fiscal and regulatory environment."
She stated that, “as a country, there is a benefit of being a late comer because we have gained insights from other countries on how to maximize our [legislation].”
africaoilcorp.com
NEWS RELEASE
AFRICA OIL ANNOUNCES LEADERSHIP CHANGE
June 26, 2023 (AOI–TSX, AOI–Nasdaq-Stockholm) – Africa Oil Corp. (“Africa Oil”, “AOC” or the “Company”) announces that Keith Hill, President and CEO, has informed the Board of his intention to step down from his executive role at Africa Oil. Mr. Hill has led the Company for more than fourteen years and has presided over major milestones, including the Prime Oil & Gas acquisition and the Venus oil discovery offshore Namibia. Under Mr. Hill’s leadership, Africa Oil has grown from a junior explorer to a full-cycle upstream company, and he leaves it in a very strong position, poised for continued future growth.
The Company is pleased to announce that Roger Tucker will join Africa Oil to succeed Mr. Hill as the new President and CEO. Dr. Tucker has a distinguished international oil and gas career with extensive experience of running and developing businesses in multiple and varied international environments. His career is characterized by significant value-creation in businesses ranging from independents, multi- nationals and state-owned companies. He was Senior Vice President Europe, for BG Group; CEO of African Arabian Petroleum Ltd., and Latitude Energy; Managing Director of Yukos Oil; and President LASMO Venezuela and a member of LASMO’s Group Executive Committee. More recently he was Chairman of Viaro Energy and has experience in private equity through Senior Partner-level positions at Prostar Capital and Vanwall Capital. He is currently a Non-Executive Director of PetroTal Corporation.
Mr. Hill has agreed to remain on the Board as a Director of the Company with Dr. Tucker also joining the Board as a Director. The handover will take place on September 5, 2023, and Mr. Hill will continue to lead the Company until that date.
Mr. Craig, Chairman of the Board commented: “Keith’s vision, industry expertise and astute deal making has created a leading Africa-focused E&P company. On behalf of the Board, I thank him for his years of hard work and his unwavering commitment to the Company. We are delighted to welcome
Roger to Africa Oil and, we are confident that he is the right candidate to succeed Keith and to lead the Company on its next phase of development.”
Mr. Hill, Outgoing President and CEO commented: “It has been a privilege to lead Africa Oil on its journey from a microcap junior explorer to a significant Independent E&P company, but now, with our increasing focus on production and developments, it is the right time to hand over the reins to Roger. I thank our Board and the Africa Oil team for their professionalism and support over the past fourteen years. I am very pleased that we have attracted Roger, a high caliber executive with his extensive experience in the international energy sector. I wish him the very best for his new role.”
Dr. Tucker, Designate President and CEO commented: “I am very happy to be joining Africa Oil, a company that has grown significantly in the last few years with an excellent opportunity set and material catalysts for shareholder value creation. I am grateful for the vote of confidence from the Africa Oil
Board and this opportunity to lead the Company on its next phase of sustainable growth, with a firm focus on shareholder value and returns.”
About Roger Tucker
Dr. Tucker holds a Ph.D. Doctorate in Sedimentology and Geochemistry from University of Newcastle Upon Tyne in the United Kingdom. He started his career with Exxon and managed a wide range of exploration and research projects globally. He then joined LASMO, a UK independent E&P company as Exploration Management Executive with a focus on building LASMO’s exploration interests with subsequently took the role of
Director of Global Business Development at LASMO to develop and execute a strategy for driving new global business opportunities. He advanced to become a member of LASMO’s Group Executive Committee with leadership responsibility for LASMO Venezuela and all business activities in the Latin
American Region. Latterly, he held senior leadership roles as Managing Director of Yukos Oil and CEO of African Arabian Petroleum and Latitude Energy, before joining BG Group as Senior Vice President Europe, where he
was directly responsible for budget, operational and financial performance of BG’s European business that accounted for 150,000 barrels of oil equivalent per day production and a significant portion of the group’s revenues and had an annual budget of USD 2 billion. This business employed 700 staff in four
countries. During his time at BG, Dr. Tucker also sat on the Regional Executive and Regional Investment Committee for Americas and Europe and Central Asia covering Brazilian, Americas and Kazakhstan operations.
OK douginil. I don't want anyone to read my response except you so... Go to AOIFF profile and pull up their website. Click on most recent news. Lo and behold.
News
Africa Oil confirms closing of prime debt refinancing and dividend payment to prime shareholders
June 20, 2023
VANCOUVER, BC, June 20, 2023 /CNW/ - (TSX: AOI) (Nasdaq-Stockholm: AOI) – Africa Oil Corp. ("Africa Oil", "AOC" or the "Company") is pleased to announce that its investee company, Prime Oil & Gas Coöperatief U.A. ("Prime"), has confirmed the closing of its debt refinancing and thus significantly increasing its debt capacity and extending its debt maturity profile. This supports the distribution of dividends by Prime to its shareholders and, Prime will distribute the first dividend of 2023 for $125.0 million or $62.5 million net to Africa Oil's 50% shareholding in Prime on June 21, 2023 $62.5 million net to Africa Oil's 50% shareholding in Prime on June 21, 202. The closing of this refinancing follows the renewal of Oil Mining License ("OML") 130 for a period of 20 years, as announced in the Company's announcement of May 29, 2023.
At the end of the first quarter 2023 Prime had an outstanding reserves-based lending ("RBL") facility and a pre-export finance facility ("PXF") with an aggregate outstanding debt amount of $720.3 million ($360.2 million net to AOC). Prime has refinanced these facilities with the closing of a new RBL facility and the PXF has been retired. This new facility is for a principal amount of $1,050.0 million ($525.0 million net to AOC) and has a 6-year tenor. Prime had a cash position of $396.9 million ($198.5 million net to AOC) at the end of the first quarter 2023.
Africa Oil closed the acquisition of a 50% shareholding in Prime in January 2020 for a cash consideration of $519.5 million. The Company has received a total of $712.5 million in dividend payments from Prime, including the $62.5 million amount to be received on June 21, 2023, and achieved payback of its Prime investment in under three years.
Africa Oil is also pleased to announce that the lenders in its standby credit facility, which is currently undrawn, have confirmed an increase in the available facility amount to $200.0 million from $100.0 million previously. The Company's standby credit facility is available up to April 20, 2024, and has a maturity of October 20, 2025. At the end of the first quarter 2023, Africa Oil had a debt-free balance sheet and a cash position of $158.2 million.
Africa Oil President and CEO Keith Hill commented: "the expansion and closing of Prime's debt refinancing, the payment of a $125.0 million dividend by Prime and the renewal of OML 130 license are important achievements in the first half of 2023. As a result, Africa Oil and Prime have greater flexibility in their near-term capital allocation decision making, underpinned by strong balance sheets in both businesses. At Africa Oil, we are well positioned to pursue our ambitions for further growth and improved shareholder returns at the appropriate time. Our plans are complemented by the potentially transformational Orange Basin appraisal and exploration campaign, offshore Namibia, which is currently under way with the Venus appraisal and Nara exploration program."
Africa Oil CFO Pascal Nicodeme commented: "We are grateful for the continuing support of our relationship banks. The doubling of the available amount for our standby credit facility to $200.0 million, is a testament to the quality of our assets and our disciplined financial management. Strong banking support is a key competitive advantage in the independent E&P sector. We look forward to further collaboration with our relationship banks as we execute our business plan."
Good news..., AOIFF web site..Behind the curtain.
Not sure what this means exactly, but the Norwegian ship Deep Sea Mira is stationed just outside the breakwater at Walvis Bay, Namibia. I used marine Traffic, Global Ship Tracking Intelligence.
I just wrote an email to Shahin Amini at Africa Oil Corp. Sir: please provide current status to the Deep Sea drill rig Mira at Walvis Bay. What is going on? Need updates...
Anybody know the status of the Drill rig at Venus or testing rigs, etc.?
Your welcome douginil. Westmount is a very small (market cap about $70MM) venture capital firm.
FYI:
Westmount Energy (London) just bot 300,000 shares of Africa Oil on June 9, 20232
Was off island and did not see this. Thanks douginil...
Thanks douginil. Sad and Regrettable, but necessary. Moving forward now with West and South Africa.
Of Value: From Seeking Alpha.
Africa Oil Corp.: The Venus Discovery Is Among The Sizable Catalysts
.Africa Oil is part of the Lundin Group of companies.
.Africa Oil has a cash flow source in Nigeria and speculative prospects elsewhere.
.Africa Oil is debt free.
.The net debt to Africa Oil from Prime is less than the cash balance of Africa Oil.
.Both Prime and Africa Oil appear to be preparing to "go shopping" for more cash flow deals.
The Africa Oil Corp. Venus discovery is impressive to be a part of as a small E&P, being the largest 2022 discovery.
The company currently has a strong portfolio of low margin production, and it has numerous avenues to increase that production.
We'd like to see Africa Oil Corp. keep focusing on its plan going forward. It needs to rush to develop assets before global demand for crude oil declines.
We're currently running a sale for our private investing group, The Retirement Forum, where members get access to portfolios, market alerts, real-time chat, and more. Learn More »
Africa Oil Corp. (OTCPK:AOIFF) recently took advantage of Impact Oil and Gas' upsized new equity offering, investing in just under 40 million shares for $31.4 million, increasing its ownership stake to 31.1%. The discovery is the largest sub-Saharan oil offering ever, and the largest discovery in 2022, with an estimated 3 billion barrels.
As we'll see throughout this article, the Venus discovery is among several sizable catalysts in Africa Oil Corp.'s portfolio.
The company had strong first quarter results, although the impact of lower oil prices is clearly visible.
Africa Oil Corporation Investor Presentation.
The company's cash position is $158.2 million, representing ~17.5% of the company's $910 million market capitalization. That's up $18 million QoQ, although it is down YoY. Still, it's a strong improvement from the company's $0 cash position post its POGBV acquisition.
The company's WI production from Prime Oil and Gas is just under 21 thousand barrels / day, down ~20% YoY, as the asset continues to mature. Still, the strength of Prime Oil and Gas is visible as the net debt position drops to an incredibly low $161 million net to the company's shareholders. We expect cash flow from operations to remain strong.
Africa Oil Corp. Southern Africa
Among the company's most exciting positions is its positioning in the Orange Basin.
Africa Oil Corporation Investor Presentation
The Venus discovery, as discussed above, was the largest discovery of 2022. The multi-billion barrel discovery passed pre-drilling expectations, and the company is the only publicly listed E&P with exposure. A four-well drilling program has begun, which will include investigating a potential westerly extension for the block.
Current forecasts are for a rapid FPSO development to lead to first oil in 2028 at roughly 250 thousand barrels / day, meaning just under 20 thousand barrels / day attributable to Africa Oil Corp. These recent FPSO developments have had strong margins. Additionally, the company has the Orange Basin Deep and Black 3B/4B assets.
Block 3B/4B has un-risked resources assessed at roughly 4 billion barrels, with a roughly 25% chance of success. The assets are being investigated for possible drilling with farm out operations. We expect cash flow and success from the Venus discoveries, could lead to substantial and rapid development in the company's other assets.
Overall, the company has exciting operations here.
Africa Oil Corp. Other Catalysts
The company has a number of other catalysts.
The company has built up a diversified portfolio across the world, partially through different equity holdings that it's built up. We'd like to see the company's production continue increasing from current levels, with high margin offshore production generating the cash flow for the company to provide strong shareholder returns.
It's a bit of a long-term wait, but the largest catalyst for us is whether the company can grow production going into the end of the decade.
Africa Oil Corp. Shareholder Returns
Africa Oil Corp. has the cash and cash flow to provide substantial shareholder returns.
The company's annualized dividend is $0.05 / share, or roughly 2.5%. That's a strong dividend that it can comfortably afford, and it plans to continue those buybacks. The company repurchased 3.1 million shares during the quarter for $6.7 million, slightly above current prices, and ~0.7% of its outstanding shares during the quarter.
That puts the company's annualized shareholder returns at ~5.5% based on the quarter's results. We've seen a tendency for the company to cut buyback rates during a downturn, and we'd like to see it reverse that trend and aggressively repurchase shares during the downturn to the tune of at least ~$15 million / quarter.
Thesis Risk
The largest risk to our thesis is crude oil prices, which have had a difficult time over the last several months, with fears of a recession. Brent Crude has dropped below $75 / barrel. While Africa Oil Corp. is highly profitable, that profitability drops substantially as oil prices drop, hurting the company's ability to drive future returns.
Conclusion
Given its valuation of less than $1 billion, Africa Oil Corp. has one of the most exciting portfolios in the industry. The company has strong core production from its Prime Oil and Gas acquisition, which has already exceeded its acquisition price. As net debt for Prime Oil and Gas goes down, the company will be able to drive more cash to Africa Oil Corp.
The Lundin Group of companies is actually a way for the controlling estate (or the heirs of the founder) to diversify. There is not a company at the top that controls these companies rather the current generation is in charge of the whole group. Africa Oil (OTCPK:AOIFF) is a Canadian company that is part of the Lundin Group of companies that reports in United States currency. As the name states, this part of the Lundin Group of companies specializes in doing business in Africa.
The advantage of being part of the Lundin Group is the resources available to a small company like this one when an appropriate deal comes along. That is no small advantage when compared to many companies the same size doing business in Africa. Those resources enabled this company to obtain a cash flow source that puts it way ahead of similar stocks in this price range. Now management is using that cash flow source to build up reserves to go shopping for more cash flow deals.
This actually appears to be a major change from the previous business of finding typical upstream leases that had a lot of potential. On the other hand, the first deal is usually the most challenging to make viable. Now that deal has been accomplished. It is going to be much easier to grow cash flow in the future through more deals. In the meantime, there are now funds for all those speculative upstream possibilities that no longer require periodic cash raises. Even though this remains a risky proposition, there is steady progress towards a more diversified and less risky future.
The Future
Africa Oil is relatively cheap for the cash flow being generated at the current time. However, operations are in a country considered relatively risky. The offshore nature combined with the stature of the operators does limit the risk somewhat. But the stock made continue to be cheap until adequate diversification is achieved.
This where the evaluation of management and the resources of the Lundin Group of companies is very important. Both of these give Africa Oil a considerable advantage over many companies of its size. Not many managements could have completed a deal involving the acquisition of Prime. But this company did.
Now the cash balances appear to imply that more deals lie ahead. Successful deals should gradually lower the risk of this issue over time. But that is also where the major risk of this issue lies.
In addition, the portfolio of other early-stage upstream companies appears to offer an attractive but speculative future. This stock is definitely not for the risk averse investor. However, the Lundin Group of companies has long had an attractive record. Therefore, any investor who can properly evaluate the risks going forward may want to consider this issue. This would be a speculative (probably) strong buy. It is definitely risky. But as part of the Lundin Group of companies, it has an above average future for this type of speculation.
The key accomplishments to date are the repayment of debt to acquire an interest in Prime. As management has noted in other parts of the presentation, the payback of the cost of acquisition happened fast. That is good news. But it should also signal the risk of operating in this part of the world to investors. Comparatively speaking, an investor is highly unlikely to see such a good deal in the Gulf of Mexico.
Since the deal that led to the acquisition of Prime was completed, management now has the cash back through dividends from Prime in less than three years. Any more dividends will be "icing on the cake".
This deal was likely available because Nigeria is risky place to do business. The offshore where the leases are located are likely less risky. So, a relatively fast payback is indicated. Similarly, building cash flow from multiple sources is probably a priority due to the dependence on cash flow from a Nigerian operation.
Prime holds an interest in offshore operations that are managed by Chevron (CVX) and TotalEnergies (TTE). Operators of this stature give a small company like Africa Oil quite a bit of credibility beyond many competitors of the same size. Having an operator of that stature helps to reduce some of the risk of operating in this area of Africa.
Prime itself has quite a bit of debt. But the entity also has a strong enough cash balance to make the net debt far less. If the combined companies can find an attractive deal, then it is worth keeping the debt at Prime to take advantage of such a deal. Otherwise, it is far better to repay the debt. So, one major risk going forward is management's ability to continue to find more deals that result in decent cash flow as is the case with Prime.
Investments
In the meantime, this deal elevated the company from the typical penny stock story of speculative futures and necessary periodic capital raises to fund those speculative hopes. But the company still has a portfolio of those speculative ideas. The difference is that now the company can participate in capital raises.
AND... A Syndicate of 3-5 Banks with a funding capacity of +- $300,000,000.
GAAP: .05Cents per share EPS. I will call the undertaker to bury this board. It seems dead.
Nice Report. Conference call on Monday. Annual rep. on May 25.
Thank you Tucson Phil.. Excellent work!
I would like to correct an earnings report date that I initially thought was May 3rd. Now I understand thru Shareholder relations is May 15, 2023. Hopefully we show earnings of over .10 per share.
I am somewhat surprised that few have taken up the information provided by Total Oil (TTE) and its sale of its share of oil sands in Canada to Suncor. Price $5.5 Billion.. Do you think that might have an impact (no pun intended) on investments in East Africa (Nigeria, Namibia) and South Africa? This is huge. A large ripple in a larger pond. Catch the wave Mr. Hill.
Puts a smile on my face...Can't wait for the E.R. May 3rd.
Sure would like to see the dividend on a timely basis.
No.. It's Ugandas' pipeline thru Tanzania, not Kenya. Don't have a clue when it will be done.
On Africa News; Pipeline project.
CNOOC and Total. 1,443K pipeline is underway in Uganda. Pipeline is to be built to a port in
Tanzania. Not sure where exactly. WTF Kenya??? Keith Hill where are you. Please pull a very large rabbit out of your hat and soon. May 3rd earnings better rock and roll or we suffer (again). Recon Energy in big trouble with ESG crap.
douginil... been a long time since I posted. Got blocked on my Scarbender account.
May 3rd, AOC earnings report. Hope its good, but more important, hoping guidance is really good.
Sanctions working???
Editor OilPrice.com
Tue, October 18, 2022 at 6:00 AM
In this article:
Two of the biggest refiners in India have stopped looking for spot Russian crude oil supply set to arrive after December 5, the day on which the EU embargo on Russian oil shipments enters into force, sources familiar with the Indian firms’ procurement plans told Bloomberg on Tuesday.
The two refiners are Indian Oil Corporation and Bharat Petroleum Corporation Limited (BPCL), according to the sources.
India, the world’s third-largest crude oil importer, has been importing large volumes of Russian oil after the Russian invasion of Ukraine due to the cheap supply with hefty discounts on the Russian grades compared to benchmarks.
Now IndianOil and BPCL, two of the biggest state-owned importers of Russian crude oil in India, are awaiting more clarity on the EU sanctions regime ahead of the December 5 deadline, including on the possibility of secondary sanctions on buyers of Russian crude.
The EU is set to impose as of early December an embargo on imports of Russian crude by sea and ban all maritime transportation services to all buyers unless the Russian oil is priced at or below a certain price cap, yet to be determined. Russia has repeatedly said that it would not export its oil to any country that will have joined the G7 and U.S.-led proposal for a price cap.
As early as September, Indian purchases of Russian oil were already expected to slow as the Asian importer was looking to more African and Middle Eastern supply as shipping rates on longer voyages jumped. With a recent surge in freight rates, Russian oil doesn’t look so cheap, and the discount of Russia’s oil to benchmarks has narrowed.
India will also further diversify its oil imports to better prepare for future OPEC+ production cuts that raise oil prices and tighten supply, its Petroleum Minister Hardeep Singh Puri said last week.
By Charles Kennedy for Oilprice.com
AFRICA OIL ANNOUNCES RESULTS OF SHARE BUYBACK PROGRAM
Sun, October 16, 2022 at 8:00 PM
In this article:
AOIFF
-5.95%
VANCOUVER, BC, Oct. 17, 2022 /CNW/ - (TSX: AOI) (Nasdaq-Stockholm: AOI) – Africa Oil Corp. ("Africa Oil", or the "Company") is pleased to announce that the Company repurchased a total of 3,429,480 Africa Oil common shares during the period of October 10, 2022 to October 14, 2022 under the previously announced share buyback program. View PDF version.
The launch of Africa Oil's normal course issuer bid (share buyback) program, announced by the Company on September 22, 2022, is being implemented in accordance with the Market Abuse Regulation (EU) No 596/2014 (MAR) and Commission Delegated Regulation (EU) No 2016/1052 (Safe Harbour Regulation) and the applicable rules and policies of the Toronto Stock Exchange ("TSX"), Nasdaq Stockholm, and applicable Canadian and Swedish securities laws.
During the period dated October 10, 2022 to October 14, 2022, the Company repurchased 667,480 Africa Oil common shares on the TSX and/or alternative Canadian trading systems. The repurchases were carried out by Scotia Capital Inc. on behalf of the Company. During the same period, the Company repurchased 2,762,000 Africa Oil common shares on Nasdaq Stockholm, and these repurchases were carried out by Pareto Securities on behalf of the Company.
All common shares repurchased by Africa Oil under the share buyback program will be cancelled. During the period dated October 10, 2022 to October 14, 2022, the Company cancelled 3,716,000 common shares repurchased under the share buyback program.
Since September 27, 2022, up to an including October 14, 2022, a total of 8,070,310 Africa Oil common shares have been repurchased under the share repurchase program through the facilities of the TSX, Nasdaq Stockholm and/or alternative Canadian trading systems. A maximum of 40,482,356 Africa Oil common shares may be repurchased under the share buyback program through the facilities of the TSX, Nasdaq Stockholm and/or alternative Canadian trading systems over the period of twelve months commencing September 27, 2022 and ending September 26, 2023, or until such earlier date as the share repurchase program is completed or terminated by the Company.
Interesting...
Kenya wants to use Tanzania's gas deposits to dominate east Africa's LPG market
Faustine Ngila
Tue, October 11, 2022 at 12:51 AM·2 min read
Reports of residents in Nairobi’s slum areas burning plastics and gunny bags to cook their meals seem to have sped up a plan by the government to use Tanzania’s vast gas deposits to reduce the cost of cooking gas, while also making itself the liquid petroleum gas (LPG) capital of east Africa.
In the last two years, the price of gas has more than doubled in the country. A six-kilo gas cylinder is now going for $12.40 from $5.80 in 2020. The introduction of a new 16% tax last year caused the price hike, and not even slashing it by half is making life easier as suppliers are delaying a price reduction. And after president William Ruto removed a critical fuel subsidy last month, using electricity to cook became more expensive.
But Ruto visited his Tanzanian counterpart Samia Suluhu Hassan on Oct. 10, and talks centered on a Memorandum of Understanding on natural gas transportation signed last year between the two countries during former president Uhuru Kenyatta’s reign.
The Tanzania-Kenya natural gas project
The $1.1 billion, 600-km natural gas pipeline will run from the Mtwara plant, located 396 km south east of the capital Dar es Salaam, to Kenya’s coastal city of Mombasa, and then to Nairobi.
“We will expedite the gas pipeline so that we can use the resources that we have to lower energy tariffs both for commercial and domestic use in Kenya,” Ruto said during a joint press briefing with Hassan. Ruto wants the project to kick off “in the shortest time possible.” There are currently no estimates of gas price reduction rate resulting from the new facility.
At an estimated 57 trillion cubic feet of gas reserves both in the Indian Ocean and offshore, Tanzania holds east Africa largest gas deposits, with an annual production of 110 billion cubic feet from three fields: Songo Songo, Mnazi Bay, and Kiliwani. The country is looking to unlock $40 billion in foreign direct investments in its gas sector by 2025.
The government plans to use the new gas pipeline to dominate east Africa’s LPG market by constructing a 25,000-ton import and storage gas facility—the region’s largest—in Mombasa to counter Tanzania’s dominance in the business. With the port of Mombasa gradually losing business to Dar es Salaam, Kenya is injecting injecting $350 million to reinforce its grip as the port business hub of the region.
Kenya Petroleum Company estimates the new facility will lower LPG prices by 30% once operational. “KPC proposes to install, commission, and operate a 500 tons per day LPG truck loading facility which will enhance product evacuation,” a June tender document by the company reads.
However, climate activists have criticized Africa’s gas projects, saying the continent should tap solar power and stop relying on non-renewables.
AOIFF
Africa Oil Corp.
2.2573 -0.1427 -5.95%
FYI
Associated Press
African gas becomes a focus for EU countries trying to replace Russia supply
Last Updated: Oct. 12, 2022 at 4:17 a.m. ET
First Published: Oct. 12, 2022 at 4:16 a.m. ET
DAKAR, Senegal (AP) — A new liquefied natural gas project off Africa’s western coast may only be 80% complete, but already the prospect of a new energy supplier has drawn visits from the leaders of Poland and Germany.
The initial field near Senegal and Mauritania’s coastlines is expected to contain about 15 trillion cubic feet (425 billion cubic meters) of gas, five times more than what gas-dependent Germany used in all of 2019. But production isn’t expected to start until the end of next year.
That won’t help solve Europe’s energy crisis triggered by Russia’s war in Ukraine. Still, Gordon Birrell, an executive for project co-developer BP, says the development “could not be more timely” as Europe seeks to reduce its reliance on Russian natural gas to power factories, generate electricity and heat homes.
“Current world events are demonstrating the vital role that (liquid gas) can play in underpinning the energy security of nations and regions,” he told an energy industry meeting in West Africa last month.
While Africa’s natural gas reserves are vast and North African countries like Algeria have pipelines already linked to Europe, a lack of infrastructure and security challenges have long stymied producers in other parts of the continent from scaling up exports. Already-established African producers are cutting deals or reducing energy use so they have more to sell to boost their finances, but some leaders warn that hundreds of millions of Africans lack electricity and supplies are needed at home.
Nigeria has Africa’s largest natural gas reserves, said Horatius Egua, a spokesman for the petroleum minister, though it accounts for only 14% of the European Union’s imports of liquefied natural gas, or LNG, that comes by ship. Projects face the risk of energy thefts and high costs. Other promising countries like Mozambique have discovered large gas reserves only to see projects delayed by violence from Islamic militants.
Europe has been scrambling to secure alternative sources as Moscow has reduced natural gas flows to EU countries, triggering soaring energy prices and growing expectations of a recession. The 27-nation EU, whose energy ministers are meeting this week to discuss a gas price cap, is bracing for the possibility of a complete Russian cutoff but has still managed to fill gas reserves to 90%.
European leaders have flocked to countries like Norway, Qatar, Azerbaijan and especially those in North Africa, where Algeria has a pipeline running to Italy and another to Spain.
Italy signed a $4 billion gas deal with Algeria in July, a month after Egypt reached an agreement with the European Union and Israel to boost sales of LNG. Angola also has signed a gas deal with Italy.
While an earlier agreement allowed Italy’s biggest energy company to start production at two Algerian gas fields this week, it was wasn’t clear when flows would start from the July deal because it lacked specifics, analysts said.
African leaders like Senegalese President Macky Sall want their countries to cash in on these projects even as they’re being dissuaded from pursuing fossil fuels. They don’t want to export it all either — an estimated 600 million Africans lack access to electricity.
“It is legitimate, fair and equitable that Africa, the continent that pollutes the least and lags furthest behind in the industrialization process should exploit its available resources to provide basic energy, improve the competitiveness of its economy and achieve universal access to electricity,” Sall told the U.N. General Assembly last month.
Algeria is a major supplier — it and Egypt accounted for 60% of the natural gas production in Africa in 2020 — but it can’t offset Russian gas to Europe at this stage, said Mahfoud Kaoubi, professor of economics and specialist in energy issues at the University of Algiers.
“Russia has an annual production of 270 billion cubic meters — it’s huge,” Kaoubi said. “Algeria is 120 billion cubic meters, of which 70.50% is intended for consumption on the internal market.”
This year, Algeria is forecast to have piped exports of 31.8 billion cubic meters, according to Tom Purdie, a Europe, Middle East and Africa gas analyst with S&P Global Commodity Insights.
“The key concern here surrounds the level of production step-up that can be achieved, and the impact domestic demand could have” given how much gas Algeria uses at home, Purdie said.
Cash-strapped Egypt also is looking to export more natural gas to Europe, even regulating air conditioning in shopping malls and lights on streets to save energy and sell it instead.
Prime Minister Mostafa Madbouly says Egypt hopes to bring in an additional $450 million a month in foreign currency by rerouting 15% of its domestic gas usage for export, state media reported.
More than 60% of Egypt’s natural gas consumption still is used by power stations to keep the country running. Most of its LNG goes to Asian markets.
A new, three-party deal will see Israel send more gas to Europe via Egypt, which has facilities to liquefy it for export by sea. The EU says it will help the two countries increase gas production and exploration.
In Nigeria, ambitious plans have yet to yield results despite years of planning. The country exported less than 1% of its vast natural gas reserves last year.
A proposed 4,400-kilometer-long (2,734-mile-long) pipeline that would take Nigerian gas to Algeria through Niger has been stalled since 2009, mainly because of its estimated cost of $13 billion.
Many fear that even if completed, the Trans-Sahara Gas Pipeline would face security risks like Nigeria’s oil pipelines, which have come under frequent attacks from militants and vandals.
The same challenges would hinder increased gas exports to Europe, said Olufola Wusu, a Lagos-based oil and gas expert.
“If you look at the realities on ground — issues that have to do with crude oil theft — and others begin to question our ability to supply gas to Europe,” he said.
Wusu urged pursuing LNG, calling it the “most profitable” gas strategy so far.
Even that isn’t without issues: In July, the head of Nigeria LNG Limited, the country’s largest natural gas firm, said its plant was producing at just 68% of capacity, mainly because its operations and earnings have been stifled by oil theft.
In the south, Mozambique is slated to become a major exporter of LNG after significant deposits were found along its Indian Ocean coast in 2010. France’s TotalEnergies TTE, -1.36% TTE, -0.98% invested $20 billion and started work to extract gas that would be liquefied in a plant it was building in Palma, in the northern Cabo Delgado province.
But Islamic extremist violence forced TotalEnergies to indefinitely scupper the project last year. Mozambican officials have pledged to secure the Palma area to allow work to resume.
Italian firm Eni ENI, -1.50%, meanwhile, pressed ahead with its plan to pump and liquefy some of its gas deposits discovered in Mozambique in 2011 and 2014. Eni established a platform in the Indian Ocean 50 miles (80 kilometers) offshore, away from the violence in Cabo Delgado.
It’s the first floating LNG facility in the deep waters off Africa, Eni says, with gas liquefaction capacity of 3.4 million tons per year.
The platform liquefied its first gas on Oct. 2, according to Africa Energy, and the first shipment is expected to depart for Europe in mid-October.
Thanks Douginil...Keith Hill is probably feeling like a bloodhound looking for great deals.
That's encouraging. However, nothing in my Fidelity account.
The answers is: Not yet! The question is Anybody get a dividend
Right on Tamtam...
Well, well, well.... Volume 437,900...Could it be that Keith Hill stepped up to the plate today? Suggested they could buy 166,000 shares per day.
Yahoo Finance
Oil prices: Expect a 'few years of pain' after 2022, analyst says
Ines Ferré·---Markets Reporter
Sun, September 25, 2022 at 2:00 AM
In this article:
Although crude oil prices plunged on Friday, energy costs in the coming years could be a different story, an oil analyst says.
“I think the energy transition is going to be moving into another quarter,” Tom Kloza, Global Head of Energy Analysis told Yahoo Finance Live. “That is going to herald really the next few years of pain.”
Russia's invasion of Ukraine has kept oil and other energy costs at historically elevated levels as Europe is forced to dislodge its dependency on Russian natural gas.
After Russian President Vladimir Putin called for a partial military mobilization earlier this week, Kloza noted that Russia cutting off the flow of crude oil and refined products is "still very, very much a threat."
Oil prices hit an eight-month low on Friday as West Texas Intermediate (CL=F) crude futures fell 6% to $78/barrel while Brent (BZ=F) futures dropped 5% to hover just above $85/barrel.
Yahoo Finance
Oil prices: Expect a 'few years of pain' after 2022, analyst says
Ines Ferré·---Markets Reporter
Sun, September 25, 2022 at 2:00 AM
In this article:
Although crude oil prices plunged on Friday, energy costs in the coming years could be a different story, an oil analyst says.
“I think the energy transition is going to be moving into another quarter,” Tom Kloza, Global Head of Energy Analysis told Yahoo Finance Live. “That is going to herald really the next few years of pain.”
Russia's invasion of Ukraine has kept oil and other energy costs at historically elevated levels as Europe is forced to dislodge its dependency on Russian natural gas.
After Russian President Vladimir Putin called for a partial military mobilization earlier this week, Kloza noted that Russia cutting off the flow of crude oil and refined products is "still very, very much a threat."
Oil prices hit an eight-month low on Friday as West Texas Intermediate (CL=F) crude futures fell 6% to $78/barrel while Brent (BZ=F) futures dropped 5% to hover just above $85/barrel.
Watch the volume on Tuesday boys... That's when the buybacks kick in. 166,870 shares for Africa Oil. Gazania should spud soon as the deepwater rig should be on site as of Septerber 20. Refinancing when get license extension making room for higher divis. GLTA
Here we go boys!!
AFRICA OIL ANNOUNCES NORMAL COURSE ISSUER BID - LAUNCH OF SHARE BUYBACK PROGRAM
Thu, September 22, 2022 at 8:00 PM
In this article:
VANCOUVER, B.C., Sept. 23, 2022 /CNW/ - (TSX: AOI) (Nasdaq-Stockholm: AOI) – Africa Oil Corp. ("Africa Oil", "AOC" or the "Company") is pleased to announce that the Toronto Stock Exchange (the "TSX") has approved the Company's proposed normal course issuer bid (referred to as a share buy-back program in Europe) of up to CAD 95 million (the "NCIB"). View PDF version
Pursuant to the NCIB, Africa Oil is authorized to repurchase through the facilities of the TSX, Nasdaq Stockholm and/or alternative Canadian trading systems, as and when considered advisable by Africa Oil, up to 40,482,356 common shares of Africa Oil (the "Common Shares"), representing approximately 8.5% of the 477,584,774 Common Shares outstanding as at September 20, 2022 (or 10% of Africa Oil's "public float" as at September 20, 2022), over a period of twelve months commencing September 27, 2022 and ending on the earlier of September 26, 2023, the date on which the Company has purchased the maximum number of Common Shares permitted under the NCIB, and the date on which the NCIB is terminated by Africa Oil.
The NCIB is being implemented in accordance with the Market Abuse Regulation (EU) No 596/2014 ("MAR") and Commission Delegated Regulation (EU) No 2016/1052 (the "Safe Harbor Regulation") and the applicable rules and policies of the TSX and Nasdaq Stockholm and applicable Canadian and Swedish securities laws.
The maximum number of Common Shares which can be repurchased each day on Nasdaq Stockholm will be 25% of the average daily trading volume of the Common Shares for the 20 trading days preceding the date of purchase, subject to certain exceptions for block purchases. In addition, Africa Oil will be limited to daily purchases of no more than 166,870 Common Shares on the TSX, being 25% of Africa Oil's average daily TSX trading volume of 667,482 Common Shares during the six months ended August 31, 2022, subject to certain exceptions for block purchases and other prescribed exemptions available under applicable Canadian securities laws.
FYI, again. From Wall Street Journal. Sept. 22.
Cost of drilling and extracting oil in the Permian has gone up 40% in last 12 months. Labor and materials. There is a reluctance on the part of the smaller drillers to risk further efforts and to cut back on drilling to preserve cash. Sooner or later large International oil companies are going to have to recognize the lowest cost producers in the world are in Africa.