REG - Afentra PLC - Annual Results
30/05/2024 07:00
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RNS Number : 3611Q Afentra PLC 30 May 2024
30 May 2024
AFENTRA PLC
UNAUDITED ANNUAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2023
Afentra plc ('Afentra' or the 'Company'), is pleased to announce its unaudited
annual results for the year ended 31 December 2023.
2023 SUMMARY
Overview
• During FY2023 and post period, successful completion of three
acquisitions in Angola to acquire 30% non-operated interest in the producing
Block 3/05 and a 21.33% non-operated interest in the adjacent development
Block 3/05A:
o Completion of acquisition of interests from Sonangol (14% in Block 3/05
and 40% in Block 23).
o Completion of acquisition of interests from INA (4% in Block 3/05 and
5.33% in 3/05A).
o SPA signed with Azule to acquire further equity in Block 3/05 and 3/05A.
o Post year-end, completion of acquisition of interests from Azule (12% in
Block 3/05 and 16% in 3/05A)
• Appointment of Thierry Tanoh as an Independent
Non-Executive Director and Chairman of the Audit Committee.
Financial Highlights
• Cash resources at year end 2023 of $19.6 million (2022: $30.6
million), which includes restricted funds of $4.9 million (2022: $10.2
million).
• Reserve Based Lending Facility at year end of $31.7 million
resulting in year end net debt of $12.3 million.
• First cargo of 300,000 bbls of crude oil sold in August 2023, at a
sales price inclusive of the Brent premium of $88/bbl, generating
pre-tax sales of $26.4 million net to Afentra.
• Crude oil stock as at year end 2023 of approximately 300,000
bbls 1 .
• Net asset level cashflow generation related to 30% equity in
Block 3/05 in 2023 was $67.4 million at an average weighted sales price of
$90/bbl.
• Mauritius Commercial Bank became a lender by entering both the
RBL and working capital facilities, Trafigura retains an interest in the RBL
facility and will continue as an offtake provider.
Operations
• Combined 2023 gross production on Block 3/05 and Block 3/05A
was 20,180 bopd (2022: 18,700bopd).
• Light well intervention campaigns successfully executed,
leading to December 2023 gross production exceeding 23,000 bopd.
• Water injection upgrades doubled injection rates, with
December rates of ~42,000 bwipd.
• Gazela field (Block 3/05A) production was restored in March
2023 leading to gross production rate of around 1,300 bopd.
• Future investment options progressed to unlock the significant
resource base including review of electric submersible pumps ('ESPs'), heavy
workovers, infill drilling and development of Block 3/05A discoveries.
• Drone surveys performed to identify fugitive emissions and
assist in quantifying flaring.
• Competent persons report ('CPR') with reserves replacement in
the first half of 2023 in excess of 150%.
Post year-end Summary
• Selected as the preferred bidder for 45% non-operating equity
in both KON15 and KON19 located in the Kwanza Basin onshore Angola.
• PSA for the onshore Block KON19 negotiated with Agência
Nacional de Petróleo, Gás e Biocombustíveis ('ANPG') and now await the
formal Government approval.
• Completion of the Azule acquisition resulting in Afentra
holding non-operated interests of 30% in Block 3/05 and 21.33% in Block 3/05A.
• Government of Angola declared the Punja Development Area in
Block 3/05A a marginal discovery with improved fiscal terms now applicable for
the remainder of its term.
• Sold cargo of 450,000 bbls of crude oil in February 2024. The
sales price inclusive of the Brent premium was $85/bbl, generating pre-tax
sales of $38.2 million to Afentra.
• Net debt at Azule completion of around $46.2m with crude oil
stock of around 840,000 bbls(1).
• Combined gross production for the first four months of 2024 ending
30 April for Blocks 3/05 and 3/05A has averaged ~23,000 bopd (Net: ~6,800,
bopd).
Commenting on the update, CEO Paul McDade said:
"Last year was another transformative period for the company as we completed
our first two transactions in Angola. The subsequent completion of the Azule
transaction represented another key milestone for Afentra as we, alongside our
partners, turn our attention to realising the significant organic growth
opportunities that we see in the quality portfolio that we have assembled.
With these initial transactions, we have successfully proved our suitability
as a credible counterparty for divesting IOCs/NOCs, our ability to deliver
high value accretive deals, and to fund these types of deals through smart
deal making. The market dynamics in Africa continue to support our inorganic
growth strategy and we are actively screening compelling opportunities that
meet with our commercial criteria. We look forward to updating the market
through what will be an active year ahead for Afentra."
For further information contact:
Afentra plc +44 (0)20 7405 4133
Paul McDade, CEO
Anastasia Deulina, CFO
Buchanan (Financial PR) +44 (0)20 7466 5000
Ben Romney
Barry Archer
George Pope
Peel Hunt LLP (Nominated Advisor and Joint Broker) +44 (0)20 7418 8900
Richard Crichton
David McKeown
Georgia Langoulant
Tennyson Securities (Joint Broker) +44 (0)20 7186 9033
Peter Krens
About Afentra
Afentra plc (AIM:AET) is an upstream oil and gas company focused on
opportunities in Africa. The Company's purpose is to support a responsible
energy transition in Africa by establishing itself as a credible partner for
divesting IOCs and Host Governments. Afentra has an 30% non-operated interest
in the producing Block 3/05 and a 21.33% non-operated interest in the adjacent
development Block 3/05A and a 40% non-operating interest in the exploration
Block 23, all offshore Angola in the Lower Congo Basin. Afentra has a 34%
carried interest in the Odewayne Block onshore southwestern Somaliland.
Inside Information
This announcement contains inside information for the purposes of article 7 of
Regulation 2014/596/EU (which forms part of domestic UK law pursuant to the
European Union (Withdrawal) Act 2018) and as subsequently amended by the
Financial Services Act 2021 ('UK MAR'). Upon publication of this announcement,
this inside information (as defined in UK MAR) is now considered to be in the
public domain. For the purposes of UK MAR, the person responsible for
arranging for the release of this announcement on behalf of Afentra is Paul
McDade, Chief Executive Officer.
( )
CHIEF EXECUTIVE OFFICER'S STATEMENT
Value driven growth
Introduction
I am delighted to provide the following statement that corresponds to what has
been a transformative period for the Company as it completed its first two
transactions, formalising its entry into Angola and the partnership on the
high-quality Block 3/05, and post period completed a deal with Azule that
provides further exposure to Block 3/05 as well as a meaningful interest in
Block 3/05A.
This past year, Afentra has evolved into a Company with an operational focus
underpinned by robust production, proven reserves, strong operating free cash
flow and a solid foothold in an established country that provides scope for
more growth opportunities in Angola and beyond.
Afentra ends the year as a Company with December net production in excess of
6,500bopd(( 2 )), 2P net reserves of 32 mmbbls(( 3 )) and a strong growth
platform from which to achieve its longer-term growth ambitions. It was also a
year in which we were able to demonstrate the commercial attractiveness of the
transactions that we have delivered with the final completion statements for
INA and Sonangol deals showing the strong cash generation of these interests
from the respective effective dates.
Strategic Progress
While these initial deals have been transformative for the Company, they also
represent initial steppingstones to our longer-term growth ambitions as we
seek to build a multi-jurisdictional business of scale in our target markets
in Africa.
The market drivers for Afentra's purpose continue to intensify as global
nations seek energy security and the African continent continues to echo its
right for a Just Transition that balances the socioeconomic impact of Energy
Transition alongside the environmental focus that underpins the Global Energy
Transition. While the pace of the industry transition we envisaged is a little
slower than anticipated due to sustained high commodity prices and lack of
credible counterparties like Afentra, that transition is occurring and will
only accelerate over the coming years.
The establishment of Afentra as a proven and credible counterparty with the
technical and commercial acumen to transact with IOCs/NOCs and bring value
adding industry expertise to any partnership is a message that we have
successfully promoted through the industry since inception. Our brand and
profile is now well established in our target markets which we believe will
ensure we get sight of many growth opportunities to consider alongside the
opportunities that we are identifying and progressing through direct
engagement.
The strategic priority for Afentra is always value over growth. The Company
wants to establish scale, however, it will do so in a strategic and
responsible way, by delivering value accretive and strategically complementary
deals that demonstrate commercial discipline and support our long-term growth
objectives. In this regard, we take a very prudent approach to growing the
business in terms of only progressing opportunities that we feel tick all the
boxes of our strict criteria assessment, and ensuring these can be delivered
in a way that maintains a strong balance sheet and delivers long-term value to
our shareholders.
All the transactions delivered to date have been crafted with this disciplined
focus in mind and the value aspect is always critical. Certainly, the initial
deals we have delivered have been complex and required a great deal of
discipline and flexibility to get them over the line. This is best reflected
in the Azule deal which resulted in an amendment to the previously announced
Sonangol deal to ensure the appropriate balance of interests on the assets
going forward. While this resulted in longer completion times than we might
have hoped for and a second suspension to trading on AIM given it was
classified as a Reverse Takeover transaction, more importantly it enabled us
to structure deals in a competitive manner that ensured strong partner
alignment which is a critical aspect for the successful delivery of the
forward strategy for the benefit of all stakeholders.
It is pleasing to see our unwavering focus on value creation reflected in the
market valuation of the business through the course of the year, especially in
the context that this initial growth has been delivered without the issuance
of new equity and all while retaining a solid balance sheet with liquidity and
a strong cash flow profile.
We hope to maintain this growth trajectory as we demonstrate to investors the
strength of that free cash flow relative to our market capitalisation and the
considerable upside that we hope to realise from this high-quality portfolio
alongside our partners.
Angola and beyond
Through Afentra's initial transactions, the Group is now established in a
mature market with a plethora of growth opportunities. Indeed, since our entry
into Angola, we have discovered that there are more compelling opportunities
across the full spectrum of the industry, from mature offshore producing
fields to the relatively untapped low-cost onshore exploration concessions.
Since our entry we have also witnessed first-hand a well-functioning operating
jurisdiction overseen by a Government that is responding to the market factors
of today to deliver the long-term socioeconomic and environmental requirements
for the benefits of the country and its citizens.
The enhancement of the fiscal terms and associated licence extension of Block
3/05 demonstrate the pragmatic approach of the relevant authorities in Angola
recognising the collaborative approach required between Governments and
industry to encourage long-term investment into the industry for the benefit
of all stakeholders.
Afentra places a lot of value on the strength of partnership alignment and
collaboration and recognises that it is crucial for the progression of any
project or industry. Certainly, over the course of many meetings with the
Ministry and Regulators in Angola, we have gained a firm grasp of their
objectives, requirements and vision for their industry, and we in turn have
outlined the ways in which we can help them achieve those outcomes and the
role that we see Afentra playing in Angola.
Following completion of the INA and Sonangol transactions in 2023, Afentra now
has a seat at the partner table and is actively providing its technical
insights. This approach is a critical aspect to Afentra's growth strategy,
especially when taking on non-operated positions, and ensures the Company can
leverage its considerable technical and operational expertise to help the
assets realise their full potential for the benefit of all partners and wider
stakeholders.
By entering Angola's industry, Afentra has made a pledge to play a long-term
role in delivering its duties for the benefit of the country and its people.
We have demonstrated our suitability as a partner by aligning ourselves with
the full spectrum of the industry from Sonangol, the National Oil Company,
through to smaller local companies. The opportunity set for Afentra to acquire
operated and non-operated interests in quality assets in various stages of the
development cycle provide a significant runway for Afentra to build a
meaningful business in country and play an important role in delivering the
industry transition that continues to be in the early stages.
It was in that regard that Afentra participated in the Angolan Onshore Bid
Round, submitting bids for Blocks KON15 and KON19, located in the Kwanza
onshore Basin, as a non-operating partner. We were subsequently selected in
early 2024 as preferred bidder alongside ACREP, a local Operator with the
requisite capabilities to make a suitable partner for Afentra in KON19 and
with Sonangol in KON15. While this kind of earlier-stage onshore licence is
not the typical opportunity that forms our strategic focus, the sub-surface
opportunity is highly compelling, with Blocks lying adjacent to both legacy
oil fields that are currently being appraised for potential re-development and
existing infrastructure allowing rapid commercialisation. Furthermore,
Afentra's participation in this process alongside local players continues to
demonstrate its commitment to the Angolan industry and this commitment has
been rewarded by being selected as preferred bidder for our preferred blocks
and we are currently engaged with the Regulators to negotiate the licence
terms.
Beyond Angola, Afentra continues to explore growth opportunities in target
countries where we see market fundamentals that mirror our strategic
objectives. Our entry into Angola through various deals has enabled us to
assemble a diverse portfolio of production and development assets. The rapid
build-up of a phased portfolio of activities is a good template that we would
look to replicate with any new country entries in the future underpinned by
our core strategic criteria in terms of value accretion, materiality and
stakeholder alignment.
Operations Summary
The performance of Blocks 3/05 and 3/05A through the year validates Afentra's
technical assessment of the upside potential in these assets and gives great
confidence in the ability of the partnership to realise that value over
time.
As detailed in the Operational Review, the intervention programme is resulting
in production optimisation and showing the effectiveness of the work programme
that was rolled out last year, with 30 successful light well interventions
completed in 2023, and a similar number of interventions planned for this
fiscal year. With gross production of over 23,000 bopd in December, and a spot
day rate in excess of 25,000 bopd, the Block 3/05 asset is clearly responding
well to the production optimisation initiatives and we look forward to a
continuation of that program through this year.
As previously alluded to, Afentra seeks to play a proactive role in
partnerships in which it holds non-operated positions and, since entering into
the various SPAs, it has undertaken various feasibility studies to enhance the
emissions profile of the field infrastructure. The enhancement of the
environmental profile of all assets in which Afentra has exposure is a key
strategic driver for the Company and we look forward to progressing our
proposed initiatives along with our existing partners in Angola.
Outlook
The Company has had an active start to the current fiscal year as we
progressed the Azule transaction which completed in May 2024, received
improved fiscal terms for the Punja Development Area in Block 3/05A and were
selected as preferred bidder for the two onshore concessions. As we progress
through the year the focus will be to support the Block 3/05 and Block 3/05A
partnership with the delivery of the work program planned for the year which
we expect to deliver further production optimisation and deliver value through
reserve replacement.
As a result of the ongoing work programme, we expect to deliver strong free
cash flow from our portfolio which will demonstrate the transformative and
value accretive nature of the transactions that we closed in the last 12
months. We also look forward to supporting the Operator with our proposed
initiatives and solutions that enhance the environmental profile of Block 3/05
as we seek to deliver that important aspect of our purpose and strategic
intent.
In parallel, we continue to progress the business development opportunities
that fit with our strategic ambition to build a multi-jurisdictional African
focused E&P company that is well positioned to capitalise on opportunities
that result from an accelerating industry transition across the continent.
In summary, 2023 was a highly active and value enhancing period for Afentra
that provides a strong growth platform from which we feel confident that we
can deliver sustainable value for our shareholders while delivering benefits
for our wider stakeholders.
I'd like to conclude by thanking the Afentra team who have worked tirelessly
on all fronts to deliver the Company's evolution, the shareholders for their
support and patience through the complex regulatory processes required to
complete these initial transactions, and our stakeholders in Angola with whom
we have developed strong mutual respect and an effective working relationship
that we hope to build on further as we demonstrate our investment into their
energy sector and long term commitment to the country.
We look forward to updating the market as appropriate as we seek to deliver
another year of growth and positive impact.
Paul McDade - Chief Executive Officer
ASSET SUMMARY
Status of deals
It has been a transformational year for Afentra with the completion of its
first two acquisitions from INA (May 2023) and Sonangol (December 2023)
resulting in the Company, at year end, holding material non-operating
interests in Block 3/05 (18%), in Block 3/05A (5.33%) and in Block 23 (40%)
located offshore Angola.
A key part of the Sonangol acquisition was the successful negotiation with the
Angolan Government to approve the extension of the Block 3/05 licence to 2040
and improved fiscal terms to the production sharing agreement ('PSA'). These
now provide the stability and commercial environment for the future investment
we plan to maximise the recovery and value of these world class assets.
Post period, the Company received approval from the Angolan Government and
completed the acquisition of a further 12% non-operated interest in Block 3/05
and 16% non-operated interest in Block 3/05A from Azule Energy Angola
Production B.V. ('Azule'). The completion of this third acquisition increases
Afentra's interests in Block 3/05 to 30% and Block 3/05A to 21.33%.
Current equity interests are illustrated below:
Block 3/05
Company Interest
Sonangol (Op.) 36%
Afentra 30%
M&P 20%
ETU Energias 10%
Naftagas 4%
Block 3/05A
Company Interest
Sonangol (Op.) 33.33%
M&P 26.67%
Afentra 21.33%
ETU Energias 13.33%
Naftagas 5.33%
Material interests in high quality assets
Offshore Blocks 3/05 and 3/05A, located in the southern Congo Basin are high
quality, shallow water, production assets with stable and robust cash flows
with significant growth potential from production optimisation and near-field
development prospects.
The Blocks are operated under PSAs by two joint ventures (JVs) with a common
Operator, the national oil & gas company Sonangol. Since 2022 the Afentra
team has developed a close working relationship with Sonangol and the JV
partnerships, actively contributing to all workshops, technical meetings and
operational meetings as well as conducting offshore site visits to the
extensive infrastructure located on Block 3/05. Our aim is to work
collaboratively and proactively with the JV and other industry stakeholders in
Angola, leveraging our deep industry expertise to optimise production
operations, re-develop the asset, explore new development opportunities and
reduce emissions from the fields.
Production optimisation and increased reserves in 1H 2023
We were pleased to report that in 2023 gross combined production in Blocks
3/05 and 3/05A increased by around 8% to an average of 20,180 bopd with an
exit rate in December 2023 exceeding 23,000 bopd. This uplift in production
was achieved through a combination of an increased operational uptime of 87%
in 2023, the successful delivery of 30 light well interventions ('LWIs') and
increased water injection volumes. The result of these efforts was reflected
in gross 2P reserves for Block 3/05 increasing to 110 mmbbls(5) and a reserve
replacement ratio in excess of 150% in the first half of 2023. These reserves
are from existing producing fields so do not rely upon the construction of new
infrastructure which limits incremental emissions.
Continued momentum to maximise the value of the assets in 2024
Based on the success of the 2023 LWI program coupled with activities to
deliver steady and increasing water injection rates, further investment will
be made in 2024 toward production optimisation. This investment will be
focused on an additional LWI program of up to 45 wells and further upgrades to
the water injection systems. Additional production enhancement is also
possible by utilising artificial lift solutions such as electrical submersible
pumps ('ESPs') and Afentra is taking the lead on technical studies and making
proposals to the joint venture regarding its application in selected wells.
Going forward infill drilling, development of appraised discoveries and near
field exploration provide the opportunity to significantly increase production
in the medium term.
Long-term field life extension and focus on reduced emissions
The extension of the Block 3/05 licence through to 2040 alongside improved
fiscal terms has supported the JV's decision to make further investments in
the infrastructure in order to extend the field life of the assets. The
bi-annual shutdown, which will take place in the second half of 2024, will
provide an opportunity to undertake maintenance and upgrades on the field
power systems. This is an important initial step to upgrade the existing
infrastructure to deliver safe, secure and reliable production for a further
20 years, resulting in long-term value for all stakeholders.
Afentra is pleased to report that early progress has been made during 2023 on
emissions management with the installation of new reliable power generation
capabilities enabling the substitution of diesel with gas which has resulted
in reduced emissions. A drone survey was undertaken in November 2023
covering all of the Block 3/05 offshore infrastructure with the objective to
identify fugitive emissions and to assist in quantifying flaring to better
define the emissions profile of the asset. In addition, emissions metering
systems will be installed during the bi-annual shutdown to establish an
accurate baseline to inform emission reduction initiatives going forward. This
forms part of a holistic gas management program to identify, measure and
reduce greenhouse gas ('GHG') emissions.
Material near field development opportunities in Block 3/05A
In Block 3/05A the extended production test on Gaz-101 that began in March
2023 is set to continue, enabling further definition of the development
concept for the Caco-Gazela discovery. The deployment of a downhole gauge is
being used to monitor the pressures which can then be used to interpret
connected oil volumes and assist in selecting the appropriate development
concept for the Caco-Gazela fault blocks.
In addition, post period following a request by the Block 3/05A partnership,
the Government of Angola have declared the Punja Development Area located in
Block 3/05A as a marginal discovery. As a result, the applicable fiscal
incentives will be applied to this discovery, significantly enhancing the
commercial value of this potential development.
The existing Block 3/05 infrastructure provides the opportunity for production
growth potential through lower emission near field tie-back developments. The
JV partnership continues to review a number of these opportunities working
toward value generating appraisal and development proposals.
Onshore Blocks with low-cost development potential
Afentra submitted bids, as a non-operating partner, for onshore Blocks KON15
(1,000 km(2)) and KON19 (900 km(2)) as part of the 2nd Kwanza Licensing Round
launched in 2023 by ANPG. In early 2024 Afentra was chosen by ANPG as a
preferred bidder for 45% interest in both Blocks and is now engaging with the
respective Operators of KON15, national oil company subsidiary, Sonangol
P&P; and KON19, Angolan independent, ACREP, to discuss the engagement with
the relevant authorities to negotiate the licence terms.
These two Blocks which are located adjacent to legacy fields that are
currently being re-developed, offering an excellent opportunity to secure
acreage over prospects that have follow on potential within the prospective
post-salt and pre-salt formation plays in this area. Using legacy datasets
these prospects and leads can be readily explored and appraised, which should
lead to short cycle development opportunities to bring on production within
short timeframes.
These licences will expand Afentra's footprint in this attractive Angolan
market by diversifying our portfolio which is principally focused on low cost,
long-life stable production and low-risk development assets.
Block 23
Block 23 is a 5,000 km(2) exploration and appraisal Block located in the
Kwanza basin in water depths from 600 to 1,600 meters and has a proven working
petroleum system. Whilst the large Block is covered by modern 3D and 2D
seismic data sets, with no outstanding work commitments remaining, much of the
Block remains under-explored.
The Block contains the Azul oil discovery, the first deepwater pre-salt
discovery in the Kwanza basin. This discovery made in carbonate reservoirs has
oil in place of approx. 150 mmbbls and tested at flow rates of approx. 3,000 -
4,000 bopd of light oil. The work program consists of re-processing 3D Seismic
to re-evaluate the prospectivity.
Block 23
Company Interest
Sonangol (Operator) 60%
Afentra 40%
Somaliland, Odewayne Block
The onshore Odewayne Block in Somaliland is an unexplored frontier acreage
position covering 22,840km(2) offering the opportunity to explore an undrilled
onshore rift basin in Africa.
During 2023 the Operator and Afentra collaborated to update their
understanding of the petroleum systems and undertook satellite seep studies.
Analysis of seeps and a water well have confirmed the presence of trace
hydrocarbons and that the upper Jurassic is the likely source rock and
potentially mature in the sub-surface. The next phase of evaluation of this
large licence is being considered to further understand the petroleum system
and exploration potential.
Odewayne Block
Company Interest
Genel Energy (Operator) 50%
Afentra 34%
Petrosoma Limited 16%
Value driven growth
In conclusion, Afentra has made substantial progress, securing material
non-operated interests in two high-quality assets, and demonstrating its
commitment to working collaboratively within its JV partnerships and with
other industry stakeholders. On Blocks 3/05 and 3/05A the successful light
well intervention project coupled with the increased reliability of water
injection during 2023 has resulted in a realisation of the potential upside of
the assets and over 150% reserve replacement in the 1H of 2023. In 2024 the
operational activities and planning for future work programs will build on
this early success and lay the foundations for continued production growth for
many years ahead.
FINANCIAL REVIEW
Deal completions and revenue generation highlight a successful year
2023 was a year of financial transformation for Afentra. We completed our two
inaugural transactions in Angola and also successfully executed our first
crude oil lifting generating $26.4 million of revenue in Q3. These were major
milestones for the Company which help to solidify our position in Angola and
demonstrate the successful progress of our strategy to deliver sustainable
shareholder returns. In addition, post period, having received approval from
the Angolan Government, the Company completed the Azule acquisition
transaction (our third in Angola) in May 2024.
With regards to Company debt financing, we effectively utilised and managed
our debt facilities, meeting all required covenants and completing on the INA
and Sonangol transactions with an aggregate debt to equity split of 63% / 37%
resulting in a year end debt position of $31.7 million and a net debt position
of $12.3 million.
We also entered into our first hedge arrangement in December 2023 purchasing a
$70/bbl floor for the 70% (315 kbbls) of the February 2024 crude oil lifting
at a cost of $1.50 per bbl to secure downside protection at the time of
relatively high volatility observed in the markets.
For 2024, our focus on M&A remains unchanged as we continue to seek to
build our portfolio via value accretive opportunities, in Angola, as well as
in other jurisdictions in the West Africa region.
From an asset perspective, our second crude oil lifting (450,000 bbls) on
Block 3/05 in February 2024 generated $38.2 million of revenue. We will
continue to strive to be a proactive and collaborative non-operating partner
in the Angolan Blocks 3/05 and 3/05A, bringing forward our technical and
commercial expertise to safely and efficiently deliver cash returns and
investment opportunities, as well as ensuring that value is protected, all
executed within a sound internal control framework.
Financing Highlights:
RBL, $34.8 million Financing drawn to fund INA and Sonangol asset
acquisitions. Key Terms:
• 5-year tenor effective from May 2023
• 8% margin over 3-month SOFR ('Secured Overnight Financing
Rate')
• Semi-annual linear amortisations
• The key financial covenant for the RBL is the ratio of Net
Debt to EBITDA (less than 3:1)
Working Capital Facility, up to $30 million revolving facility. Key Terms:
• 5-year tenor effective from May 2023
• 4.75% margin over 1-month SOFR
• Repayable with proceeds from liftings
Selected financial data 2023 2022
Sales volume (kbbls) 300.0 -
Realised oil price ($/bbl) 88.0 -
Total revenue $ million 26.4 -
Year end cash net to the Group $ million 14.7 20.4
Restricted funds $ million 4.9 10.2
Borrowings $ million (31.7) -
Net debt $ million (12.3) -
Adjusted EBITDAX $ million 11.1 (5.2)
Loss after tax $ million (2.7) (9.1)
Year end share price Pence 37.0 26.4
Non-IFRS measures
The Group uses certain measures of performance that are not specifically
defined under IFRS or other generally accepted accounting principles. These
non-IFRS measures can include capital investment, debt and adjusted EBITDAX.
Income Statement
2023 production from Afentra's interests in Blocks 3/05 and 3/05A, post the
completion of INA and Sonangol transactions, averaged 3,509 bopd (2022: nil).
2023 revenue of $26.4 million (2022: nil) consisted of 1 lifting from Block
3/05 of 300kbbls at a realised price of $88.0/bbl.
Cost of sales during the year totalled $12.6 million (2022: nil).
The profit from operations for 2023 was $2.4 million (2022: loss $9.0 million)
as a result of the inaugural lifting in August 2023. During the year, net
administrative expenditure increased to $11.5 million (2022: $9.0 million)
predominantly as a result of exceptional (one off) costs associated with the
RTO process ($1.6 million in the period) and an increase in staff costs and
share based payment charges ($1.8 million).
In 2023, a portion of the Group's staff costs and associated overheads have
been expensed as pre-licence expenditure ($4.8 million), or
capitalised/recharged ($34k) where they are directly assigned to capital
projects. This totalled $4.8 million in the year (2022: $3.1 million)
reflecting continuing M&A project activity.
Finance income was received (interest on deposits) in the year of $240k (2022:
$86k). Finance costs increased during 2023 to $3.5 million (2022: $197k),
primarily due to the operation of RBL and WC facilities.
The loss for the year was $2.7 million (2022: loss $9.1 million):
$' Million
Loss for year 2022 (9.1)
Increase in revenue 26.4
Increase in cost of sales (12.6)
Increase in G&A and pre-licence costs (2.5)
Increase in finance expense (3.2)
Increase in tax expense (1.8)
Loss for year 2023 (2.7)
Group adjusted EBITDAX totalled $11.1 million (2022: $5.2 million loss):
2023 2022
$' Million $' Million
Loss after tax (2.7) (9.1)
Net finance costs 3.3 0.1
Depletion and depreciation 2.9 0.2
Pre-licence costs 4.8 3.5
Share based payment charge 1.0 -
Taxation 1.8 -
Total EBITDAX (Adjusted) 11.1 (5.2)
The basic and diluted loss per share was 1.2 cents per share (2022: loss 4.1
cents per share). No dividend is proposed to be paid for the year ended 31
December 2023 (2022: $ nil).
Statement of financial position
At the end of 2023, Non-current assets totalled $174.0 million (2022: $21.9
million), the increase entirely related to the acquisition of the Company's
interests in Block 3/05, Block 3/05A and Block 23.
At the end of 2023, Current assets stood at $36.7 million (2022: $31.0
million) including; inventories of $13.4 million (2022: $ nil), cash and cash
equivalents of $14.7 million (2022: $20.4 million), restricted funds of $4.9
million (2022: $10.2 million) and trade and other receivables of $3.6 million
(2022: $419k).
At the end of 2023, Current liabilities were $38.8 million (2022: $2.9
million) including borrowings of $6.8 million (2022: $ nil), contingent
consideration of $4.6 million (2022: $ nil) and trade and other payables of
$27.3 million (2022: $2.7 million). The increase in trade and other payables
is related to the Company's share of Joint Venture working capital items
(Block 3/05 and Block 3/05A).
At the end of 2023, Non-current liabilities were $123.8 million (2022: $160k)
including borrowings of $25.0 million (2022: $ nil) and contingent
consideration/provisions of $98.9 million (2022: $33k).
Group net assets at the end of 2023 totalled $48.0 million (2022 $49.8
million). Movements in the component parts of Group net assets are
predominantly as a result from the acquisitions made in 2023 and the
associated movements in assets, liabilities and debt. Increases versus 2022
balances in both non-current assets ($152.3 million) and current assets ($29.5
million) are offset by corresponding increases in non-current liabilities
($123.2 million) and current liabilities ($53.3 million) resulting in an
overall $1.8m decrease in Group net assets in 2023 vs 2022.
Cash flow
Net cash inflow from operating activities totalled $12.3 million (2022:
outflow $6.7 million), the increase predominantly due to the acquisitions of
Block 3/05 and Block 3/05A and the revenue from the Company's first lifting.
Net cash used in investing activities totalled $45.9 million (2022: $10.3
million) the increase predominantly due to the acquisitions of Block 3/05 and
Block 3/05A.
Net cash generated in financing activities totalled $28.0 million (2022: used
$225k) primarily as a result of the net drawdowns on debt facilities.
During the year there were minimal cash investments on the Odewayne Block in
Somaliland due to the Group's interest being fully carried by Genel Energy
Somaliland Limited for its share of the costs during the Third and Fourth
Periods of the PSA.
Accounting Standards
The Group has reported its 2023 and 2022 full year accounts in accordance with
UK adopted international accounting standards.
Cautionary statement
This financial report contains certain forward-looking statements that are
subject to the usual risk factors and uncertainties associated with the oil
and gas exploration and production business. Whilst the Directors believe the
expectation reflected herein to be reasonable in light of the information
available up to the time of their approval of this report, the actual outcome
may be materially different owing to factors either beyond the Group's control
or otherwise within the Group's control but, for example, owing to a change of
plan or strategy. Accordingly, no reliance may be placed on the
forward-looking statements.
Anastasia Deulina - Chief Financial Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER
2023 2022
$000 $000
Revenue 26,390 -
Cost of sales (12,571) -
Gross profit 13,819 -
Other administrative expenses (6,647) (5,484)
Pre-licence costs (4,810) (3,491)
Total administrative expenses (11,457) (8,975)
Profit/(loss) from operations 2,362 (8,975)
Finance income 240 86
Finance expense (3,508) (197)
Loss before tax (906) (9,086)
Tax (1,799) -
Loss for the year attributable to the owners of the parent (2,705) (9,086)
Other comprehensive expense - items to be reclassified to the income statement
in
subsequent periods
Currency translation adjustments (96) -
Total other comprehensive expense for the year (96) -
Total comprehensive expense for the year attributable to the owners of the (2,801) (9,086)
parent
Basic & Diluted loss per share (US cents) (1.2) (4.1)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER
Note 2023 2022
$000 $000
Non-current assets
Exploration and evaluation assets 21,867 21,324
Property, plant and equipment 3 75,131 540
Other non-current assets 4 76,973 -
173,971 21,864
Current assets
Inventories 13,441 -
Trade and other receivables 3,640 419
Cash and cash equivalents 14,729 20,384
Restricted Funds 4,850 10,200
36,660 31,003
Total assets 210,631 52,867
Equity
Share capital 28,143 28,143
Currency translation reserve (298) (202)
Share option reserve 965 -
Retained earnings 19,162 21,867
Total equity 47,972 49,808
Current liabilities
Borrowings 5 6,752 -
Trade and other payables 27,307 2,689
Contingent consideration 6a 4,621 -
Lease liability 155 210
38,835 2,899
Non-current liabilities
Borrowings 5 24,951 -
Contingent consideration 6a 21,863 -
Provisions 6b 77,010 33
Lease liability - 127
123,824 160
Total liabilities 162,660 3,059
Total equity and liabilities 210,631 52,867
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Currency Share
Share translation option Retained
capital reserve reserve earnings Total
$000 $000 $000 $000 $000
At 1 January 2022 28,143 (202) - 30,953 58,894
Loss for the year - - - (9,086) (9,086)
Currency translation adjustments - - - - -
Total comprehensive expense for the year attributable to the owners of the - - - (9,086) (9,086)
parent
At 31 December 2022 28,143 (202) - 21,867 49,808
Loss for the year - - - (2,705) (2,705)
Currency translation adjustments - (96) - - (96)
Total comprehensive expense for the year attributable to the owners of the - (96) - (2,705) (2,801)
parent
Share based payment charge for the year - - 965 - 965
At 31 December 2023 28,143 (298) 965 19,162 47,972
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 31 DECEMBER
Note 2023 2022
$000 $000
Operating activities:
Loss before tax (906) (9,086)
Depreciation, depletion & amortisation 3 2,880 244
Share-based payment charge 965 -
Finance income and gains (240) (86)
Finance expense and losses 3,508 197
Operating cash flow prior to working capital movements 6,207 (8,731)
Decrease in inventories (from acquisition date) 4,789 -
Decrease/(increase) in trade and other receivables (from acquisition date) 5,809 (131)
(Decrease)/increase in trade and other payables (from acquisition date) (2,688) 2,170
Increase/(decrease) in provisions 3 (3)
Cash flow generated from/(used in) operating activities 14,120 (6,695)
Petroleum income tax paid (1,799) -
Net cash flow generated from/(used in) operating activities 12,321 (6,695)
Investing activities
Corporate acquisitions 7 (48,126) -
Interest received 240 86
Purchase of property, plant and equipment (3,316) (127)
Exploration and evaluation costs (43) (35)
Cash inflow from/(outflow from) restricted funds 5,350 (10,200)
Net cash used in investing activities (45,895) (10,276)
Financing activities
Draw-downs on loan facilities net of transaction costs 45,066 -
Principal repayments on loan facilities (14,367) -
Interest paid and financing fess (2,504) -
Principal and interest paid on lease liability (245) (225)
Net cash generated from/(used in) financing activities 27,950 (225)
Net decrease in cash and cash equivalents (5,624) (17,196)
Cash and cash equivalents at beginning of year 20,384 37,727
Effect of foreign exchange rate changes (31) (147)
Cash and cash equivalents at end of year 14,729 20,384
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. General information
The results announcement is for the year ended 31 December 2023.
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 December 2023 or 2022, but is
derived from those accounts. Statutory accounts for 2022 have been delivered
to the Registrar of Companies and those for 2023 will be delivered following
the Company's Annual General Meeting.
The auditors have reported on those accounts; their reports were unqualified,
did not draw attention to any matters by way of emphasis without qualifying
their report and did not contain statements under s498(2) or (3) Companies Act
2006.
While the financial information included in this announcement has been
prepared in accordance with the recognition and measurement criteria of
International Financial Reporting Standards (IFRSs), this announcement does
not itself contain sufficient information to comply with IFRSs.
The Annual Report and Accounts and the notice for the Company's Annual General
meeting, which is to be held at 10.00 a.m. on 27 June 2024, will be posted to
Shareholders on 4 June 2024.
2. Going concern
The Group business activities, together with the factors likely to affect its
future development, performance and position are set out in the Asset summary.
The financial position of the Group and Company, its cash flows and liquidity
position are described in the Financial Review.
The Group has sufficient cash resources for its working capital needs and its
committed capital expenditure programme at least for the next 12 months from
the signing of the annual report. Consequently, the Directors believe that
both the Group and Company are well placed to manage their business risks
successfully.
The Group has sufficient cash resources based on existing cash on balance
sheet, proceeds from future oil sales and utilisation of the revolving working
capital facility to meet its liabilities as they fall due for a period of
at least 12 months from the date of signing these financial statements, based
on forecasts covering the period through to 31 December 2025, notwithstanding
the impact of the situation in Ukraine and the Middle East and the resultant
impact to commodity prices and foreign exchange rates.
The Board has looked at a combination of downside scenarios, including a
production shortfall alongside lower than anticipated oil prices. The impact
of the downside scenarios can be mitigated by the implementation of hedges
of 70% of the remaining 2024 cargos. Further scenarios associated with
additional acquisitions of Kon 15 and Kon 19 have also been reviewed and the
Board believe that liquidity is sufficient to pursue these opportunities and
cover all financial covenants, the tests of which, for current borrowings,
have been passed for the Historic Ratio (Net debt/Ebitda) and the Gross
liquidity test, and are not forecast to be breached within the going concern
period. The Board also notes the implementation of the hedging policy and is
confident in the utilisation of commodity-based derivatives to manage oil
price downside risk. Thus, the Board believes its appropriate to continue to
adopt the going concern basis of accounting in preparation of the financial
statements.
The Directors have at the time of approving the financial statements, a
reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future.
3. Property, plant and equipment
Block 3/05 PSA, Angola: Afentra Angola Ltd 18%, Sonangol (Operator) 36%,
M&P 20%, Azule 12%, Etu Energias 10% and NIS-Naftagas 4%.
Block 3/05A PSA, Angola: Afentra Angola Ltd 5.33%, Sonangol (Operator) 33.33%,
M&P 26.68%, Azule 16%, Etu Energias 13.33% and NIS-Naftagas 5.33%.
The right of use asset (office lease) is depreciated on a straight-line basis
over the lifetime of the lease contract. The current lease term is for 8
years, ending in 2024. See Note 7 for further information on the additions in
the year.
Computer
Oil and gas assets Office Lease and office equipment Total
Group $000 $000 $000 $000
Cost
At 1 January 2022 - 1,203 279 1,482
Modification during the year - (60) (8) (68)
Additions during the year - - 127 127
Disposals during the year - - (49) (49)
At 31 December 2022 - 1,143 349 1,492
Modification during the year - 22 9 31
Acquisitions during the year 71,356 - - 71,356
Additions during the year 6,066 - 18 6,084
Disposals during the year - - (5) (5)
At 31 December 2023 77,422 1,165 371 78,958
Accumulated depreciation and impairment
At 1 January 2022 - (598) (159) (757)
Charge for the year - (187) (57) (244)
Disposals during the year - - 49 49
At 31 December 2022 - (785) (167) (952)
Charge for the year (2,600) (190) (90) (2,880)
Disposals during the year - - 5 5
At 31 December 2023 (2,600) (975) (252) (3,827)
Net book value at 31 December 2023 74,822 190 119 75,131
Net book value at 31 December 2022 - 358 182 540
Net book value at 31 December 2021 - 605 120 725
4. Other non-current assets
The Group have reviewed the accounting treatment for the decommissioning fund
held by the Block 3/05 Operator and have recognised a non-current asset and an
offsetting non-current liability for $77.0 million, which equates to the
present value of the future decommissioning liability. It is management's view
that the future liability for decommissioning is represented by the totality
of the funds held by the Operator, specifically for such purposes. The
non-current asset held for decommissioning liability is limited to the lower
of the present value of the future decommissioning liability and the amount of
the funds held by the Operator.
Total
2023 2022
$000 $000
Decommissioning fund 76,973 -
76,973 -
5. Borrowings
The Group has activated elements of both the RBL Facility and Working Capital
facility in order to facilitate the completion of the INA and Sonangol
acquisitions. As at 31 December 2023, the Group has drawn down $34.8 million
(RBL) and $ Nil million (Working Capital) with the following key terms:
RBL Facility
· 5-year tenor
· 8% margin over 3-month SOFR (Secured Overnight Financing Rate)
· Semi- annual linear amortisations
· Key financial covenant of Net Debt to EBITDA < 3:1
Working Capital up to $30 million revolving facility
· 5-year tenor
· 4.75% margin over 1-month SOFR
· Repayable with proceeds from liftings
2023 2022
$000 $000
Current
Reserve Based Lending Facility 6,752 -
Working Capital Facility - -
6,752 -
2023 2022
$000 $000
Non-current
Reserve Based Lending Facility 24,951 -
24,951 -
2023 2022
$000 $000
Borrowings
At 1 January - -
Loan drawdowns 48,003 -
Interest charge 1,152 -
Repayments (15,519) -
Unamortised debt arrangement cost (2,545) -
Interest accrued 612 -
At 31 December 31,703 -
A charge is placed on Afentra (Angola) Ltd shares to Mauritius Commercial Bank
Limited as required by the terms of the debt facilities.
6. Contingent consideration and provisions
a. Contingent consideration
Provisions include contingent consideration payable to SNL and INA on Blocks
3/05 and 3/05A:
INA acquisition:
· Tranche 1: The contingent consideration for 3/05 relates to the
2023 and 2024 production levels and a realised brent price hurdle up to an
annual cap of $2.0 million;
· Tranche 2: The contingent consideration for 3/05A relates to the
successful future development of the Caco Gazela and Punja development areas,
with production and oil price hurdles. The maximum payable for these
development areas is $5.0 million.
SNL acquisition:
· The contingent consideration for the SNL acquisition is payable
annually over the next 10 years in each year where production exceeds
15,000bopd, and the realised oil price exceeds $65. The maximum annual amount
payable is $3.5 million, resulting in a total maximum payment of $35 million
over 10 years.
Management have reviewed the contingent payments related to the SNL and INA
acquisitions, which are dependent upon production levels, future oil price
hurdles and future 3/05A developments. Judgement has been applied to the
probability of the circumstances occurring that would give rise to some or all
of the future payments. For each tranche of contingent consideration
Management have applied a multiple scenario approach with 4 scenarios applied
to each tranche along with the related weightings of probability resulting in
an expected amount payable.
In addition, Management has applied a discount rate that approximates to the
incremental borrowing rate in arriving at a present value at the balance sheet
date of the probable future liabilities. The discount rate is based at a
market rate of 9.1%. Management is therefore comfortable with the liabilities
recorded at the balance sheet date in respect of these contingent future
events.
In applying Management's judgement to the different scenarios and applying the
discount rate noted above results in contingent consideration of $26.5
million. A 2% increase in the discount rate would result in a reduction in
contingent consideration of $1.6 million and a 2% decrease in the discount
rate would result in an increase in contingent consideration of $1.8
million. The impact of removing the scenarios that have an expectation the
realised brent price hurdles will not be met (5% original weighting) and
including a relative increase in the base case scenarios would increase the
contingent consideration by $0.6 million.
2023 2022
$000 $000
Current
Contingent consideration 4,621 -
4,621 -
2023 2022
$000 $000
Non-current
Contingent consideration 21,863 -
21,863 -
b. Decommissioning and other provisions
As part of the acquisition of Block 3/05 from SNL and INA the Group is
responsible for the future cost of decommissioning the wells. As set out in
Note 4 the decommissioning is prefunded and held by the Block 3/05 Operator
and the Group has recognised a non-current asset to offset the decommissioning
non-current liability of $77.0 million, which equates to the present value of
the future decommissioning liability.
The cost of the decommissioning is equal to the agreed decommissioning plan.
The Group's share of this cost is $99.7 million. In calculating the
decommissioning liability at 31 December 2023 the cost has been inflated to
provide the future cost of decommissioning at a rate of 2.5% and then
discounted to the present value at a discount rate of 4.07%. This results in a
decommissioning liability of $77.0 million.
The impact of changes to the inflation and discount rates, independently,
would result in the following. An increase in the inflation rate to 3% would
increase the decommissioning liability by $6.6 million. An increase in the
discount rate to 4.25% would decrease the decommissioning liability by $2.2
million. A decrease in the inflation rate to 2% would decrease the
decommissioning liability by $6.1 million. A decrease to the discount rate to
4.00% would increase the decommissioning liability by $0.9 million.
2023 2022
$000 $000
Non-current
Decommissioning 76,973 -
Other 37 33
77,010 33
Movements in current and non-current provisions (contingent consideration)
during 2023 are primarily due to the acquisitions of the INA and Sonangol
interests in Angola (Block 3/05 (18%) and Block 3/05A (5.33%).
7. Asset acquisitions
During the period the Group completed the acquisition of interests in Block
3/05 (18%) and Block 3/05A (5.33%) offshore Angola for a net $48.1 million
payment with subsequent contingent payments of $26.5 million. See Note 6a for
details of the contingent consideration.
Block 3/05 Block 3/05A Block 23 Total
$000 $000 $000 $000
Consideration
Initial consideration 65,000 3,000 500 68,500
Actual adjustments from effective date (34,604) 2,203 - (32,401)
Contingent consideration - Extension of Block 3/05 licence 10,000 - - 10,000
Contingent consideration - Oil price linked 2,028 - - 2,028
Consideration paid 42,423 5,203 500 48,126
Contingent consideration - Oil price and production linked / future 25,122 1,362 - 26,484
developments
Total consideration 67,545 6,565 500 74,610
Net assets
Oil and gas properties 63,745 7,611 - 71,356
Other non-current assets (decommissioning fund) 76,973 - - 76,973
Exploration and evaluation assets - - 500 500
Non-current provision (decommissioning) (76,973) - - (76,973)
Inventory (Oil Stock) 14,272 88 - 14,360
Joint Venture partner balance (2,165) 627 - (1,538)
Joint Venture working capital (8,307) (1,761) - (10,068)
Net assets acquired 67,545 6,565 500 74,610
The Group performed an assessment of the SNL and INA acquisitions to determine
whether the acquisition should be accounted for as an asset acquisition or a
business combination. For both transactions, the Group established that under
IFRS11, joint control does not exist, and therefore the Group have deemed the
acquisition to qualify as an acquisition of group of assets and liabilities,
not of a business. Furthermore, the Group gave regard to guidance included
under IFRS 11- Joint Arrangements, and will account for its share of the
income, expenses, assets, and liabilities from the acquisition date.
The consideration (contingent and actual consideration paid) was allocated to
assets and liabilities based on their relative fair values.
8. Subsequent events
Subsequent to the Balance Sheet date of December 31st, the following business
deliverables occurred:
· Afentra submitted bids, as a non-operating partner, for Blocks
KON15 (1,000 km2) and KON19 (900 km2) located in the Kwanza onshore Basin and
in January has been informed that it has been selected as the preferred bidder
for 45% equity in both Blocks.
· In February 2024, the Company sold its first 2024 cargo of
450,000 bbls of crude oil. The sales price inclusive of the Brent premium was
$85/bbl, generating pre-tax sales of $38.2 million to Afentra.
· In March 2024 conditional share option awards were granted to the
Executive Directors of the Company under the terms of the Afentra plc
Founders' Share Plan.
· In March 2024, Afentra with its partners agreed and initialed the
PSA for the onshore Block KON19 with Agência Nacional de Petróleo, Gás e
Biocombustíveis ('ANPG') and now await the formal approval of the Angolan
Government.
· In March 2024, Afentra announced that it had received approval
from the Angolan Competition Authority for the acquisition from Azule of a 12%
non-operating interest in Block 3/05 and a 16% non-operating interest in Block
3/05A, offshore Angola.
· In April 2024, Afentra announced that it had received approval
from the Government of Angola for the Azule Acquisition.
· In April 2024, Afentra announced that the Government of Angola
had declared the Punja Development Area in Block 3/05A a marginal discovery
with improved fiscal terms now applicable for the remainder of its term.
· In May 2024, Afentra announced the completion of the Azule
acquisition resulting in Afentra holding non-operated interests of 30% in
Block 3/05 and 21.33% in Block 3/05A, including the following completion
settlement figures:
· Net completion payment of $28.4 million, with Afentra inheriting
crude oil stock of c.480,000 barrels.
· Net completion payment to be funded by $4.9 million held in
escrow, $17.0 million from the agreed RBL and $6.5 million from cash
resources.
· Further contingent payments payable to Azule include up to $14.0
million over two years for Block 3/05 (subject to oil price thresholds) and up
to $15.0 million (for future developments, subject to oil price thresholds and
production hurdles in Block 3/05A).
· Following the Azule acquisition, the total RBL drawn is $47.3
million, the total working capital facility drawn is $13.7 million, and the
cash balance is $14.8 million, resulting in a net debt of approximately $46.2
million.
· After completing the Azule acquisition, the company holds a stock
of c. 840,000 barrels, that can be valued at $63.0 million (based on $75 per
barrel) on a pre-tax basis.
· The company expects to sell its next cargo of crude oil (around
450,000 barrels) in June 2024.
· Mauritius Commercial Bank continues as the lender to the company.
Trafigura retains an interest in the RBL facility and will continue as offtake
provider.
DEFINITIONS AND GLOSSARY OF TERMS
$
US dollars
2D
Two dimensional
2C
Denotes best estimate of Contingent Resources
2P
Denotes the best estimate of Reserves. The sum of Proved plus
Probable Reserves
AIM
AIM, a SME Growth market of the London Stock Exchange
AGM
Annual General Meeting
ALNG
The Angola LNG project
ANPG
Agência Nacional de Petróleo, Gás e Biocombustíveis (holder of the mining
rights of Exploration, Development and Production of liquid and gaseous
hydrocarbons in Angola)
Articles
The Articles of Association of the Company
Block
3/05
The contract area described in and covered by the Block 3/05 PSA
Block
3/05A
The contract area described in the Block 3/05A PSA
Block
23
The contract area described in and covered by the Block 23 PSA
Board
The Board of Directors of the Company
bbls
Barrels of oil ('k-' / 'mm-' / 'bn-' for thousand / million / billion)
Bopd
Barrels of oil per day ('k-' / 'mm-' for thousand / million)
Bwipd
Barrels water injection per day
CCRA
Climate Change Risk Assessment
Companies Act or Companies Act The Companies Act 2006, as amended
2006
Company
Afentra plc
CPR
Competent Persons Report
Directors
The Directors of the Company
E&E
Exploration and evaluation assets
E&P
Exploration and production
EBITDAX (Adjusted) Earnings
before interest, taxation, depreciation, depletion and amortisation,
impairment, share-based payments, provisions, and pre-licence expenditure
EITI
Extractive Industries Transparency Initiative
Entitlement Reserves
Entitlement production/reserves refers to the share of oil/gas that a company
is entitled to receive based on fiscal and contractual agreements governing
the specific asset.
EOR
Enhannced Oil Recovery
ERCe
ERC Equipoise Limited (author of the Competent Person's Report)
ESP
Eletrical Submersible Pumps
Farm-in & farm-out
A transaction under which one party (farm-out party) transfers part of its
interest to a contract to another party (farm-in party) in exchange for a
consideration which may comprise the obligation to pay for some of the
farm-out party costs relating to the contract and a cash sum for past costs
incurred by the farm-out party
FID
Final investment decision
FSO
Floating storage and offloading
G&A
General and administrative
GBP
Pounds sterling
G&G
Geological and geophysical
Genel
Energy
Genel Energy Somaliland Limited
GHG
Greenhouse gases
GOR
Gas Oil Ratio
Group
The Company and its subsidiary undertakings
H&S
Health and Safety
HSSE
Health, Safety, Security and Environment
hydrocarbons
Organic compounds of carbon and hydrogen
IAS
International Accounting Standards
IFRS
International Financial Reporting Standards
INA
INA-Indstrija Nafte d.d
IOC
International oil company
IPCC
Intergovernmental Panel on Climate Change
JV
Joint venture
JOA
Joint operating agreement
k
Thousands
km
Kilometre(s)
km(2)
Square kilometre(s)
KPIs
Key performance indicators
lead
Indication of a potential exploration prospect
Lifex
Life extension capex
LNG
Liquefied Natural Gas
London Stock Exchange or LSE London Stock Exchange Plc
LTI
Lost time Injury
LTIP
Long-term incentive plan
LWI
Light Well Intervention
M&A
Mergers and acquisitions
m
Metre(s)
NFA
No Further Activity - forecast without new Capex invested
NOCs
MNational oil company
O&G
Oil and gas
OECD
Organisation for Economic Cooperation and Development
Op.
Operator
Opex
Operating expenditure
Ordinary
Shares
ordinary shares of 10 pence each
Petroleum
Oil, gas, condensate and natural gas liquids
Petrosoma
Petrosoma Limited (JV partner in Somaliland)
Prospect
An area of exploration in which hydrocarbons have been predicted to exist in
economic quantity. A group of prospects of a similar nature constitutes a
play.
PSA
Production sharing agreementQCA Code Corporate Governance Code for Small
and Mid-Size Quoted Companies 2018
RBL
Reserve-Based Lending
Reserves
Reserves are those quantities of petroleum anticipated to be commercially
recoverable by application of development projects to known accumulations from
a given date forward under defined conditions. Reserves must satisfy four
criteria; they must be discovered, recoverable, commercial and remaining based
on the development projects applied. Reserves are further categorised in
accordance with the level of certainty associated with the estimates and may
be sub-classified based on project maturity and/or characterised by
development and production status
RTO
Reverse takeover (pursuant to Rule 14 of the AIM Rules)
SPA
Sale and Purchase Agreements
Seismic
Data, obtained using a sound source and receiver, that is processed to provide
a representation of a vertical cross-section through the subsurface layers
SOFR
Secured Overnight Financing Rate
Shares
10p ordinary shares
Shareholders
Ordinary shareholders of 10p each in the Company
Subsidiary
A subsidiary undertaking as defined in the 2006 Act
Sonangol
Sonangol Pesquisa e Producao S.A.
Sonangol
EP
Sociedade Nacional de Combustíveis de Angola, Empresa
Pública
TCFD
Task force on Climate-related Financial Disclosure
Third and Fourth Period Exploration
terms: Third Period is to May 2025 with a work commitment of 500km 2D seismic
acquisition; Fourth Period is to October 2026 with a work commitment of
1,000km 2D seismic acquisition and one exploration well
Trafigura
Trafigura PTE
TRIF
Total Recordable Incident Frequency
United Kingdom or UK The United
Kingdom of Great Britain and Northern Ireland
Working Interest or WI A
Company's equity interest in a project before reduction for royalties or
production share owed to others under the applicable fiscal terms
ZRF
Zero Routine Flaring
1 Crude oil stock entitlement
2 Net average December combined production exit rate from Block 3/05 and
3/05A post completion of the Azule Acquisition.
3 Net 2P Reserves post completion of the Azule Acquisition based CPR by ERCe
effective 1 July 2023 with subtraction of 2H net production of 1.1 mmbbls.
Block 3/05A Reserve base is not included.
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