Highlights
- Net income of
$38.4 million (first half 2021 total of$77.3 million ) and end of quarter cash balance of$35.1 million . - Received a dividend for
$37.5 million from Prime during the quarter and a further$37.5 million dividend in July. - On
August 2, 2021 ,Africa Oil announced the closing of its corporate debt facility with$160 million committed. The Company utilized$98 million of this new facility to fully repay its BTG term loan ("Term Loan") with the undrawn balance of$62 million available toAfrica Oil untilMay 2022 . This can be utilized for general corporate purposes, subject to customary covenants. - At end of
July 30, 2021 , AOC had an approximate cash balance of$42 million and net debt of$56 million . - Selected Prime's second quarter 2021 results net to
Africa Oil's 50% shareholding*: - end of quarter cash position of
$292.8 million that includes an amount of$152.5 million , which is 50% of the security deposit received from Equinor in relation to the Agbami field; - average daily working interest ("W.I") production of 28,100 barrels of oil equivalent per day ("boepd) and economic entitlement production of 30,500 boepd (84% light and medium crude oil and 16% conventional natural gas)2,3; and
- EBITDA4 of
$155.1 million (first half 2021 total of$298.2 million ) and cash flow from operations of$252.3 million (first half 2021 total of$338.2 million ). - Post period, in
July 2021 , the OML 130 Gas Sales and Purchase Agreement was signed by Prime and all other parties, settling historical gas sales fromJuly 2018 . This will result in an additional$36 million of sales revenue with a net cash payment of$21 million expected in the third quarter 2021, in each case net toAfrica Oil's 50% shareholding. - Field operational performance remains strong and was enhanced by the removal of production limitations on Egina due to
OPEC constraints.
* Important information: |
2021 Second Quarter Financial Results
(Thousands United States Dollars, except Per Share and Share Amounts)
Cash and cash equivalents | 35,090 | 40,474 | ||
Total assets | 992,288 | 910,499 | ||
Short-term debt | 123,000 | - | ||
Long-term debt | - | 141,000 | ||
Total liabilities | 165,574 | 156,212 | ||
Total equity attributable to common shareholders | 826,714 | 754,287 | ||
Six months ended | Six months ended | Three months ended | Three months ended | |
Share of profit from investment in joint venture | 97,378 | 117,316 | 48,564 | 31,731 |
Share of (loss)/profit from investment in associates | (2,090) | 57 | (1,205) | (1,413) |
Total operating income | 95,288 | 117,373 | 47,359 | 30,318 |
Net operating income/(expense) | 88,339 | (103,983) | 44,133 | 27,004 |
Net income/(loss) | 77,304 | (118,648) | 38,384 | 19,234 |
Net income/(loss) per share - basic and diluted | 0.16 | (0.25) | 0.08 | 0.04 |
Weighted average number of share outstanding - basic ('000s) | 472,703 | 471,631 | 473,253 | 471,950 |
Weighted average number of share outstanding - diluted ('000s) | 475,848 | 471,631 | 476,398 | 475,150 |
Number of shares outstanding ('000s) | 473,360 | 471,950 | 473,360 | 471,950 |
Cash flows (used in)/ provided by operations | (6,841) | (754) | (3,065) | (1,525) |
Cash flows used in investing | 30,623 | (467,634) | 32,525 | (13,629) |
Cash flows (used in)/provided by financing | (29,154) | 178,429 | (23,800) | (17,923) |
Total change in cash and cash equivalents | (5,384) | (290,036) | 5,655 | (33,097) |
Total change in equity | 72,427 | (112,010) | 44,504 | 17,598 |
The financial information in this table was selected from the Company's unaudited consolidated financial statements for the three months ended |
FINANCIAL POSITION AND EARNINGS
The Company recognized net operating income amounting to
As at
Prime distributed one dividend to its shareholders in the second quarter of 2021 with
On
PRIME'S SECOND QUARTER 2021 PERFORMANCE
Production from the Egina field continued to be affected in the second quarter of 2021 by the OPEC+ quotas, but these were relaxed in June, with further increases to production planned in the second half of 2021. These quotas limited production from Egina in the second quarter of 2021 to an average of approximately 162,000 bopd, which compares to the first quarter 2021 average of 152,000 bopd. The quotas in June in respect of the Egina field were approximately 173,000 bopd. The approved July and August quotas are approximately 181,000 and 177,000 bopd respectively. In
Prime's second quarter 2021 average daily W.I. production was 28,100 boepd and economic entitlement production was 30,500 boepd (84% light and medium crude oil and 16% conventional natural gas), net to
During the second quarter of 2021, Prime was allocated four oil liftings with total sales volume of approximately 4.0 million barrels or 2.0 million barrels net to
Prime has sold forward or hedged 100% of its second half 2021 cargoes at an average price of
Second quarter 2021 average operating cost of
Prime achieved second quarter 2021 sales revenue of
On
As of
2021 OPERATIONAL OUTLOOK
In
There is no change to 2021 Management Guidance announced on
Guidance for Prime, net to AOC's 50% shareholding: | |
W.I. production (boepd) | 24,000-28,000 |
Economic entitlement production (boepd) | 26,000-30,000 |
Cash flow from operations (million) | |
Capital investment (million) | |
Net Debt Repayment (million) | |
Through its 30.9% shareholding in
In
NOTES
- The 50% shareholding in Prime is accounted for using the equity method and presented as an investment in joint venture in the Consolidated Balance Sheet.
Africa Oil's 50% share of Prime's net profit or loss will be shown in the Consolidated Statements of Net Income/Loss and Comprehensive Income/Loss. Any dividends received byAfrica Oil from Prime are recorded as Cash flow from Investing Activities. The guidance presented here is for information only. - Aggregate oil equivalent production data comprised of light and medium crude oil and conventional natural gas production net to Prime's W.I. in Agbami, Akpo and Egina fields. These production rates only include sold gas volumes and not those volumes used for fuel, reinjected or flared.
- Net entitlement production is calculated using the economic interest methodology and includes cost recovery oil, tax oil and profit oil and is different from working interest production that is calculated based on project volumes multiplied by Prime's effective working interest in each license.
- Earnings Before Interest, Tax, Impairment, Depreciation and Amortization ("EBITDA") is not a generally accepted accounting measure under International Financial Reporting Standards ("IFRS") and does not have any standardized meaning prescribed by IFRS and, therefore, may not be comparable with definitions of EBITDA that may be used by other public companies. Non-IFRS measures should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS.
- All dollar amounts are in
United States dollars unless otherwise indicated.
About
Additional Information
This information is information that
Advisory Regarding Oil and Gas Information
The terms boe (barrel of oil equivalent) is used throughout this press release. Such terms may be misleading, particularly if used in isolation. Production data are based on a conversion ratio of six thousand cubic feet per barrel (6 Mcf: 1bbl). This conversion ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.
Forward Looking Information
Certain statements and information contained herein constitute "forward-looking information" (within the meaning of applicable Canadian securities legislation). Such statements and information (together, "forward looking statements") relate to future events or the Company's future performance, business prospects or opportunities.
All statements other than statements of historical fact may be forward-looking statements. Statements concerning proven and probable reserves and resource estimates may also be deemed to constitute forward-looking statements and reflect conclusions that are based on certain assumptions that the reserves and resources can be economically exploited. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "seek", "anticipate", "plan", "continue", "estimate", "expect, "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions) are not statements of historical fact and may be "forward-looking statements". Forward-looking statements involve known and unknown risks, ongoing uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements, including statements pertaining to instituting a dividend policy or implementing a share buyback program, utilization and drawdown under the new Corporate Loan facility, performance of commodity hedges, the results, schedules and costs of exploratory drilling activity, uninsured risks, regulatory and fiscal changes, availability of materials and equipment, unanticipated environmental impacts on operations, duration of the drilling program, availability of third party service providers and defects in title. No assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. The Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by applicable laws. These forward-looking statements involve risks and uncertainties relating to, among other things, changes in macro-economic conditions and their impact on operations, changes in oil prices, reservoir and production facility performance, hedging counterparty contractual performance, OPEC+ quota impact on production, results of exploration and development activities, cost overruns, uninsured risks, regulatory and fiscal changes, defects in title, claims and legal proceedings, availability of materials and equipment, availability of skilled personnel, timeliness of government or other regulatory approvals, actual performance of facilities, joint venture partner underperformance, availability of financing on reasonable terms, availability of third party service providers, equipment and processes relative to specifications and expectations and unanticipated environmental, health and safety impacts on operations. Actual results may differ materially from those expressed or implied by such forward-looking statements.
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