TIDMAET
RNS Number : 1025W
Afentra PLC
08 December 2023
8 December 2023
AFENTRA P L C
Completion of Sonangol Acquisition and Publication of
Supplementary Admission Document
Afentra plc ('Afentra' or the 'Company') is pleased to announce
the successful completion of the previously announced acquisition
of interests in Block 3/05 and Block 23 from Sonangol, together
with the publication of an AIM supplementary admission document
(the " Supplementary Admission Document ") and the proposed
re-admission of the Company's Ordinary Shares to trading on AIM
("Admission").
Completion of Sonangol Acquisition
Afentra is pleased to announce completion of the acquisition of
a 14% non-operating interest in Block 3/05 and a 40% non-operating
interest in Block 23, offshore Angola (the 'Sonangol Acquisition')
pursuant to a sale and purchase agreement between Sonangol and
Afentra's wholly-owned subsidiary, Afentra (Angola) Ltd, dated 20
April 2022, as amended and restated on 18 July 2023.
-- Acquisition increases Afentra's interest in Block 3/05 to 18%
(following its previous acquisition from INA), this will increase
to 30% upon completion of the ongoing Azule acquisition.
-- Payable cash consideration at completion of $21.1million.
Initial cash consideration of $56.5m reduced by impact of cash flow
adjustments as of the transaction effective date of 20 April
2022
-- Company inherits crude oil stock with an approximate value of
$11.9 million at $75/bbl (158,691 bbls)(1)
-- Acquisition of a 40% non-operated interest in Block 23 for
$0.5m, providing long-term upside potential
-- Operational performance continues to improve with Block 3/05
gross production of around 20,560 bbl/d
-- End 2023 financial position:
o Net debt is expected to be around $20.7m
o Crude oil stock of around 300,000 bbls (value of $22.5m at
$75/bbl)
The Company is also pleased to announce the publication of the
Supplementary Admission Document in relation to the Sonangol
Acquisition. Shareholders are encouraged to read the Supplementary
Admission Document in full.
The Sonangol Acquisition constitutes a reverse takeover under
the AIM Rules. Application has been made for 220,053,520 Ordinary
Shares to be re-admitted to trading on AIM at 8.00 a.m. (GMT) this
morning.
Azule Acquisition
The Government approval process for Afentra to purchase further
non-operated interests in Block 3/05 (12%) and Block 3/05A (16%),
offshore Angola from Azule Energy Angola Production B.V. ('Azule')
is ongoing with the acquisition now expected to complete later in
1Q 2024.
We look forward to providing shareholders with further updates
in due course.
Fiscal Terms and CSI equity redistribution Update
We are pleased to confirm that the execution of the addendum to
the PSA has now been signed and the improved fiscal terms are now
effective thereby having a positive impact on the cashflow
associated with the Block 3/05 asset.
The Government of Angola has completed its process to terminate
and redistribute the CSI interests thereby increasing Afentra's
current interest in Block 3/05A from 4% to 5.33%; this interest
will further increase to 21.33% upon completion of the Azule
acquisition.
Operations Update
Gross production from Block 3/05 has averaged 20,560 bopd in
November 2023, with annual gross production for 2023 forecast to be
around 19,100 bopd. In addition, production from Block 3/05A
continues at around 1,300 bopd from the well Gaz-101. These strong
and increasing levels of production demonstrate the benefit of
continued restoration works over the course of the year in addition
to the well intervention activities underway in Block 3/05.
Moreover, production uptime improved quarter-on-quarter, from
77% in 1Q 2023 to 87% in 3Q 2023. Water injection has averaged
approx. 33,000 bbl/d for the year to date, a material increase on
2022. The continued light well intervention (LWI) programme to date
has focused mainly on re-perforation and stimulation operations
across the Block 3/05 fields, further LWI operations also focused
on improvements in gas lift are planned before the end of the year.
In Block 3/05A, at the Gazela field, long term testing continues at
approx. 1,300 bbl/d, enabling framing of potential low cost
development options. Future planned activities on Block 3/05 will
consist of an additional phase of light well interventions, the
installation of ESP's on a sample set of production wells and
infill wells. A gas management workstream commenced in 1H 2023 to
examine a holistic solution for gas which could enable a material
reduction of emissions in the medium to long term.
We have uploaded a short presentation to the Afentra website:
https://afentraplc.com/wp-content/uploads/2023/12/AET-Sonangol-Completion-081223.pdf
The Supplementary Admission Document is available to download
from the Company's website:
https://afentraplc.com/investors/
Total number of voting rights
At Admission, the total number of Ordinary Shares in issue will
be 220,053,520 . The Company does not hold any shares in treasury,
and therefore at Admission the total number of voting rights in the
Company will be 220,053,520 . This figure may be used by
shareholders as the denominator for the calculations by which they
will determine if they are required to notify their interest in, or
a change to their interest in, the Company under the FCA's
Disclosure Guidance and Transparency Rules.
Commenting on the update, CEO Paul McDade said:
"Completion of the Sonangol Acquisition is a major milestone for
Afentra that reflects the efforts on all sides to get this
transformative transaction completed. The effective date of the
agreement ensures Afentra has benefitted from 18 months of net
interest cash flow from the quality 3/05 asset which significantly
reduces the cash payment at completion. I would like to thank
Sonangol and ANPG for their pragmatism and support through the
prolonged process and we look forward to working alongside them and
our JV partners as we seek to maximise the value of the portfolio
for the benefit of all stakeholders over the long-term.
Completion of the Azule transaction will give Afentra more
materiality through greater exposure to the cash flow and upside
from these assets, and while the completion timing is expected in
1Q 2024, the Company continues to benefit from the cash flow from
the 1 October 2022 effective date.
The Block 3/05 asset continues to perform strongly following
successful implementation of the initial work programme designed to
optimise production, with field production at the top end of
internal 2023 production estimates. We look forward to continuing
to contribute Afentra's technical insights and value to the
partnership in parallel with showing our strong investment
proposition to the market."
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 18% non-operated interest in the producing Block 3/05 and
5.33% interest in an adjacent development Block 3/05A offshore
Angola in the Lower Congo Basin. Afentra has a 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) ('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.
(1) as at 30 November 2023.
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END
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