AFRICA OIL ANNOUNCES STRATEGIC FARM DOWN AGREEMENT FOR ITS ORANGE BASIN BLOCK 3B/4B
VANCOUVER, BC, March 6, 2024 /CNW/ - (TSX: AOI) (Nasdaq-Stockholm: AOI) – Africa Oil Corp. ("Africa Oil", or the "Company") is pleased to announce its wholly-owned subsidiary, Africa Oil SA Corp. ("AOSAC") has signed a strategic farm down agreement ("Agreement") with TotalEnergies EP South Africa B.V. ("TotalEnergies") and QatarEnergy International E&P LLC ("QatarEnergy") for the Orange Basin Block 3B/4B, offshore South Africa. Through AOSAC, the Company currently has an operated 26.25% interest in Block 3B/4B and has entered the Agreement jointly with its partners Eco (Atlantic) Oil & Gas Limited ("Eco") and Ricocure (Proprietary) Ltd ("Ricocure"), through their respective subsidiaries. View PDF version
On completion of the transaction, Africa Oil will retain a 17.00% interest and the operatorship of Block 3B/4B will transfer to TotalEnergies.
Transaction Highlights:
Maximum transaction value of up to $46.8 million to Africa Oil.
Africa Oil will receive, subject to achieving certain milestones defined in the Agreement, staged payments for a total cash amount of $10.0 million, of which $3.3 million is payable at Completion, as defined below, and the remaining balance in two successive payments conditional upon achievement of key operational and regulatory milestones.
Africa Oil will also receive a full carry of its 17.00% retained share of all JV costs, up to a cap, that is repayable to TotalEnergies and QatarEnergy from production, and which is expected to be adequate to fund the Company's share of drilling for up to two wells on the licence.
Completion of the Agreement ("Completion") is subject to the satisfaction of customary conditions precedent, including approvals from the government of South Africa.
Africa Oil Chief Executive Officer, Dr Roger Tucker, commented: "Attracting TotalEnergies and QatarEnergy as our new partners in Block 3B/4B is an endorsement of the exploration potential of the block. These opportunities are on trend with the discoveries in Namibia's Orange Basin, including Venus in Block 2913B. Both companies have deep geological knowledge of the basin with successful nearby discoveries. TotalEnergies, as the new operator, also brings extensive deepwater drilling and development expertise.
Africa Oil has an unrivalled position amongst its Independent E&P peer group in this world-class basin. This includes our indirect interest in the Venus discovery and the on-going appraisal and exploration campaign on Block 2913B."
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