AFRICAN ENERGY
TRANSITION
INA Completion Update
10 May 2023
Afentra plc
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Angola Entry Following INA Deal Completion
INA completion
- Completed acquisition from INA of interests in Block 3/05 (4%) and Block 3/05A (4%)1 on 5 May 2023
- Net completion payment of $17.0m with inherited crude oil stock valued at $16.6m2
- Escrow deposit of $10.0m made to cover the Block 3/05 licence extension contingent payment
- Net upfront consideration and escrow deposit funded by $18.9m from debt facilities and $8.1m cash
- The Company expects to sell its first cargo of crude oil in Q3 2023
Block 3/05 PSA extension
- Block 3/05 partners and ANPG have now agreed the terms of the Block 3/05 licence extension
- Licence will be extended to December 20403 with enhanced fiscal terms
- Government approval expected in June 2023
Sonangol Acquisition pending
- Agreement on licence extension allows Sonangol to pursue the requisite government approvals for transaction
- Completion expected ahead of 30 June 2023
Post-deal interests
Block 3/05 | INA | Sonangol |
completion | completion | |
Sonangol | 50% | 30% |
Afentra | 4% | 24% |
Azule | 12% | 12% |
Somoil | 10% | 10% |
M&P | 20% | 20% |
Naftagas | 4% | 4% |
Block 3/05A4 | INA | Sonangol |
completion | completion | |
Sonangol | 33.33% | 33.33% |
M&P | 26.67% | 26.67% |
Azule | 16.00% | 16.00% |
Somoil | 13.33% | 13.33% |
Afentra | 5.33%1 | 5.33%1 |
Naftagas | 5.33% | 5.33% |
- Subject to final approval of the distribution of the China Sonangol International ('CSI') interest to the remaining joint venture partners, Afentra's working interest in Block 3/05A would increase from 4% to 5.33%
- Afentra share of stock-in-tank at 30 April 2023, valued at $80/bbl on a pre-tax basis
- Block 3/05 PSA extension from 1 July 2025 to 31 December 2040
- Assumes that the default China Sonangol interests have been redistributed pro-rata amongst existing Partners (subject to final approval, as per footnote 1)
Afentra plc | 2 |
Financing INA Completion
Significant offset to completion costs with earned cash flow & stock at completion
INA Transaction
Block 3/05 (4%), Block 3/05A (4%)1 - effective date 30 September 2021
Completion Date - 5 May 2023 | $ million |
Upfront consideration | 12.0 |
Working capital & interests2 | 4.8 |
Contingent consideration due | 2.0 |
Asset cashflow contribution3 | (1.8) |
Net completion payment to INA | 17.0 |
License extension payment (paid into Escrow) | 10.0 |
Stock entitlement at completion 207,868 bbls | ~16.64 |
- Subject to final approval of the distribution of the China Sonangol International interest to remaining joint venture partners, Afentra's working interest in Block 3/05A would increase from 4% to 5.33%
- Working capital adjustments and interest on consideration from effective date to completion date
Transaction status & funding
- Transaction completion
- Government approval received in January 2023
- Completion documentation finalised on 5 May 2023
- Funding of $27.0m net upfront consideration and escrow deposit
- $18.9m debt facilities
- $8.1m cash
- Further contingent payments
- Up to $4m over 2 years subject to oil price hurdles5
- Up to $5m subject to Block 3/05A future developments6
- Afentra share of stock-in-tank at 30 April 2023, valued at $80/bbl on a pre-tax basis
- Calculated as 30% share of revenue upside above Brent price of $65/bbl with an annual cap of $2m
- Subject to development of existing discoveries and a minimum Brent price of $65/bbl
3 Asset cashflow generation from effective date to completion, comprising crude oil sales less cash calls paid, excluding significant stock-in-tank inherited at completion
Afentra plc | 3 |
Operational Update: Blocks 3/05 and 3/05A
Block 3/05 (Congo basin) - 24%1
- Q1'23 production from Block 3/05 averaged 17,206 bbl/d
- Rates impacted by downtime due to planned restoration works on power generation and distribution network
- April 2023 production averaged ~19,000 bbl/d
- Updated CPR completed with 1P/2P/3P reserves of 72/108/145 mmbbls (gross) at 1.1.23 effective date. 2C resources of 43 mmbbls.
- Key 2023/2024 activities:
- Water injection rates increased to average ~45,000 bw/d in Q1 2023. Continued investment and focus.
- Light well interventions ongoing with a further 30 interventions in next 18 months
- Ongoing investment in infrastructure to enhance reliability and uptime
- Building full understanding of emissions and potential mitigation options
Block 3/05A (Congo basin) - 4%2,3
- Long-termtesting commenced at the Gazela field of additional 1,100 bbl/d, enabling framing of potential development options
- Punja development concept meetings ongoing to frame opportunity
- Upon completion of the Sonangol transaction, Afentra's working interest in Block 3/05 increases from 4% to 24%
- Subject to final approval of the distribution of the China Sonangol International ('CSI') interest to the remaining joint venture partners, Afentra's working interest in Block 3/05A would increase from 4% to 5.33%
- Caco-Gazela& Punja resources not included in 2023 CPR
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Afentra plc published this content on 10 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 May 2023 06:06:10 UTC.