Africa Oil Corp (AOIFF)

[douginil]

Africa Oil

[[ Thanks to posters on Stockhouse ]]

Subject: RE:Hedges
Posted by: papaloapan
Date and time: 3/3/2021 6:14:00 AM
Text:
Hedges were put in place by Prime, and were part of what AOI acquired. They covered all of 2020 and run off during 2021, principally throught the first half as I recall.

Price increases allow them to decide whether and when to reset them, if they choose, or if they are mandated by the RBL lenders.

Like all hedges they work both ways - leave money on the table are save you bacon.




Subject: RE:RE:Hedges
Posted by: Ferryboy
Date and time: 3/3/2021 9:17:09 AM
Text:
Prime held cash of $115m (AOI's share) as at Dec 31. By the RBL redermination date of Mar 31, that should be $200m or more. That could allow for a further $100m paydown and a dividend of $50 - 75m to AOI.

It is a rising interest rate environment but it is also a rising oil price environment which will be much more significant to Prime's cashflow. Also the reduction in debt levels gives Prime more leverage in negotiations.

I think 2H 2021 could see a lot of good things happen for AOI starting with a more favourable RBL re-fin, more consistent divindend flow from Prime and, of course, any success from AFE EOG and Impact. And dare I say it, Kenya. Keith Hill would not be making mention of it unless there was some basis for it.

But in the meantime, more patience required I think.