LONDON, Feb. 27,
2023 /CNW/ - (TSX: AOI) (Nasdaq-Stockholm: AOI) –
Africa Oil Corp. ("Africa Oil", "AOC" or the "Company")
announces the posting of its 2022 statement of reserves on SEDAR
(www.sedar.com) as part of its Annual Information Form. This
disclosure is based on an independent reserves evaluation,
effective 31 December 2022, prepared
by RISC (UK) Limited ("RISC") for Africa Oil in accordance with
Canadian National Instrument 51-101 – Standards for Oil and Gas
Activities ("NI 51-101") and the Canadian Oil and Gas Evaluation
Handbook ("COGE Handbook"). Africa Oil's statement of reserves is
based on the Company's 50% ownership interest in Prime Oil &
Gas Coöperatief U.A ("Prime"). View PDF version
Highlights1
- Year-end ("YE") 2022 reserves determination has delivered an
after-tax Proved plus Probable reserves ("2P") NPV(10) valuation of
$1,232 million (YE'21: $1,444 million)2. The change in 2P
reserves valuation is net of total dividend payments of
$250 million by Prime to Africa Oil
during 2022.
- 72% of the produced volumes in the three years since acquiring
the 50% shareholding in Prime have been replaced with new Proved
("1P") W.I. reserves. YE'22 working interest ("W.I.") and net
entitlement3 1P reserves of 34.6 MMboe (YE'21: 48.6
MMboe) and 41.3 MMboe (YE'21: 55.0 MMboe), respectively.
- YE'22 W.I. and net entitlement 2P reserves of 55.6 MMboe
(YE'21: 72.8 MMboe) and 63.9 MMboe (YE'21: 82.1 MMboe),
respectively.
- 2P W.I. reserves are lower than the previous year primarily due
to W.I. production of 8.7 MMboe and technical revision of 8.4
MMboe. The technical revision is mostly due to a reduction in the
expected ultimate recovery of the Egina field following the
incorporation of production performance and the results of the 4D
seismic processed during 2022.
- Acquisition of a new 4D seismic monitoring survey is planned in
OML130 during 2023 to aid in identifying future infill drilling
targets on both Akpo and Egina fields.
- A multi well drilling programme commenced in late February on
OML 130, which is the first major work programme since the Company
acquired its 50% shareholding in Prime, and will enhance production
performance on Egina and Akpo in 2023 onwards.
Africa Oil Chief Executive Officer, Keith Hill, commented on the statement of
reserves: "Since acquiring our 50% shareholding in Prime in
January 2020 we have received
$650.0 million in dividends from
Prime compared to a closing cash consideration of $519.5 million, and we still have a material
reserves base that will generate robust production and cash flows
for many years to come. One of the larger assets in Nigeria, the Egina field, had a 2P reserves
reduction due to changing well performance and a revised
understanding of reservoir complexity, based on the information
obtained from the 2022 4D seismic provided by the operator.
However, we are looking forward to the results of this year's Egina
infill drilling program and the upcoming 2023 4D monitoring survey
to help underpin future drilling campaigns and optimize reserves
volumes within OML130. There are also multiple attractive
development, appraisal and infrastructure-led exploration
opportunities on both OML 127 and OML 130, presenting us with
low-risk, short-cycle investment opportunities that have very
attractive rates of returns."
Africa Oil's statement of reserves is based on the Company's 50%
ownership interest in Prime Oil & Gas Coöperatief U.A
("Prime"). Prime's main assets are an indirect 8% interest in Oil
Mining Lease ("OML") 127 and an indirect 16% interest in OML 130;
both are deep-water Nigeria
concessions. OML 127 is operated by the affiliates of Chevron
Corporation and contains the producing Agbami field. OML 130 is
operated by affiliates of TotalEnergies SE and contains the
producing Akpo and Egina fields and the undeveloped Preowei
field.
Notes:
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1
|
Please refer to the oil
and gas advisory on page 4 for important information.
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2
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Based on Brent oil
price forecast of ($/bbl): 2023 - $83.0; 2024 - $77.0; 2025 -
$72.0; 2026 - $75.4; 2027 - $77.3; 2028 and beyond escalation rate
of 2.5%.
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3
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Net entitlement
reserves are calculated using the economic interest methodology and
include cost recovery oil, tax oil and profit oil and are different
from working interest reserves that are calculated based on project
volumes multiplied by Prime's effective working
interest.
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4
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All dollar amounts in
this press release are U.S. Dollars unless otherwise
indicated.
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The YE'2022 reserves and reconciliation of changes in W.I.
reserves summarized in the following tables pertain to 50% of
Prime's W.I. and net entitlement reserves:
Summary of Oil and
Gas Reserves (Forecast Prices and Costs)
|
|
Light and Medium
Oil
|
Conventional
Natural
Gas
|
Natural Gas
Liquids
|
Reserve
Category
|
Gross
(MMstb)
|
Net
(MMstb)
|
Gross
(Bcf)
|
Net
(Bcf)
|
Gross
(MMstb)
|
Net
(MMstb)
|
Proved
|
Developed
Producing
|
17.9
|
22.9
|
19.6
|
21.2
|
-
|
-
|
Developed
Non-Producing
|
-
|
-
|
-
|
-
|
-
|
-
|
Undeveloped
|
11.3
|
13.0
|
13.2
|
13.5
|
-
|
-
|
Total
Proved
|
29.1
|
35.8
|
32.9
|
34.6
|
-
|
-
|
Probable
|
18.3
|
19.9
|
16.5
|
21.1
|
-
|
-
|
Total Proved plus
Probable
|
47.4
|
55.7
|
49.4
|
55.6
|
-
|
-
|
Possible
|
19.2
|
19.5
|
41.9
|
26.2
|
-
|
-
|
Total Proved plus
Probable plus Possible
|
66.6
|
75.2
|
91.3
|
81.8
|
-
|
-
|
Notes
1.
Figures in table may not add precisely
due to rounding errors.
2.
Units are MMstb (million stock tank
barrels) and Bcf (billion cubic feet).
3.
Gross Company reserves are the total
project sales volumes multiplied by Company's working
interest.
4.
Net oil reserves are Company's net
entitlement calculated using economic limit testing.
5.
Gross and net reserves for sales gas are
equal as the gas terms are set out in the Gas Sales and Purchase
Agreement rather than the Production Sharing Agreement ("PSA"), and
the net reserves are based on Company's working
interest.
|
Gross
|
Light and Medium Oil
(MMstb)
|
Conventional Natural
Gas (Bscf)
|
|
Proved
|
Probable
|
Proved +
Probable
|
Proved
|
Probable
|
Proved +
Probable
|
Effective date
31
December
2021
|
40.6
|
21.2
|
61.8
|
47.9
|
18.0
|
65.9
|
Extensions
and Improved Recovery
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
Resource Transfers
|
-0.4
|
-0.3
|
-0.7
|
0.0
|
0.0
|
0.0
|
Technical Revisions
|
-4.6
|
-2.7
|
-7.3
|
-5.3
|
-1.5
|
-6.8
|
Discoveries
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
Acquisitions
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
Dispositions
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
Economic Factors
|
0.4
|
0.1
|
0.5
|
0.2
|
0.0
|
0.2
|
Production (2022)
|
-7.0
|
0.0
|
-7.0
|
-9.9
|
0.0
|
-9.9
|
Effective date
31
December
2022
|
29.1
|
18.3
|
47.4
|
32.9
|
16.5
|
49.4
|
Notes:
1.
Gross Company Reserves are the total
project sales volumes multiplied by AOC's working
interest.
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About Africa Oil
Africa Oil Corp. is a Canadian oil and gas company with
producing and development assets in deepwater Nigeria; development assets in Kenya; and an exploration/appraisal portfolio
in west and south of Africa, as
well as Guyana. The Company is
listed on the Toronto Stock Exchange and on Nasdaq Stockholm under
the symbol "AOI".
Additional Information
This information is information that Africa Oil is obliged to
make public pursuant to the EU Market Abuse Regulation. The
information was submitted for publication, through the agency of
the contact persons set out above, at 10:00p.m. EDT on February
27, 2023.
Advisory Regarding Oil and Gas Information
The terms boe (barrel of oil equivalent) and MMboe (millions of
barrels of oil equivalent) are used throughout this press release.
Such terms may be misleading, particularly if used in isolation.
Year-end 2021 reserves estimates are based on a conversion ratio of
six thousand cubic feet per barrel of oil equivalent (6 Mcf: 1
boe), which 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.
RISC's report was prepared using Brent oil price forecast of
($/bbl): 2023 - $83.0; 2024 -
$77.0; 2025 - $72.0; 2026 - $75.4; 2027 - $77.3; 2028 and beyond escalation rate of 2.5%.
There is no assurance that the forecast prices will be attained and
variances could be material. The recovery and reserves estimates of
crude oil, natural gas liquids and natural gas reserves provided
herein are estimates only and there is no guarantee that the
estimated reserves will be recovered. Actual crude oil, natural gas
and natural gas liquids reserves may be greater than or less than
the estimates provided herein.
The reserves estimates presented in this press release have been
evaluated by RISC in accordance with NI 51-101 and the COGE
Handbook, are effective December 31,
2022. The reserves presented herein have been categorized
accordance with the reserves and resource definitions as set out in
the COGE Handbook. The estimates of reserves in this press release
may not reflect the same confidence level as estimates of reserves
for all properties, due to the effects of aggregation.
Reserves are estimated remaining quantities of petroleum
anticipated to be recoverable from known accumulations, as of a
given date, based on the analysis of drilling, geological,
geophysical, and engineering data; the use of established
technology; and specified economic conditions, which are generally
accepted as being reasonable. Reserves are further classified
according to the level of certainty associated with the estimates
and may be sub-classified based on development and production
status. Proved Reserves are those quantities of petroleum, which,
by analysis of geoscience and engineering data, can be estimated
with reasonable certainty to be economically producible from a
given date forward, from known reservoirs and under existing
economic conditions, operating methods and government regulations.
Probable Reserves are those additional quantities of petroleum that
are less certain to be recovered than Proved Reserves, but which,
together with Proved Reserves, are as likely as not to be
recovered. Possible Reserves are those additional reserves that are
less certain to be recovered than probable reserves. It is unlikely
that actual remaining quantities recovered will exceed the sum of
the estimated proved plus probable plus possible reserves.
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 production, cashflow from operation and
capital investment estimates, 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.
Although the Company believes that the expectations reflected by
the forward-looking statements presented in this document are
reasonable, the Company's forward-looking statements have been
based on assumptions and factors concerning future events that may
prove to be inaccurate. Those assumptions and factors are based on
information currently available to the Company about itself and the
businesses in which it operates. Information used in developing
forward-looking statements has been acquired from various sources,
including third party consultants, suppliers and regulators, among
others. Because actual results or outcomes could differ materially
from those expressed in any forward-looking statements, investors
should not place undue reliance on any such forward-looking
statements. By their nature, forward-looking statements involve
numerous assumptions, inherent risks and uncertainties, both
general and specific, which contribute to the possibility that the
predicted outcomes will not occur. Some of these risks,
uncertainties and other factors are similar to those faced by other
oil and gas companies and some are unique to the Company.
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,
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.
The Company's Annual Information Form for the year ended
December 31, 2022 and other documents
filed with securities regulatory authorities (accessible through
the SEDAR website www.sedar.com) describe risks, material
assumptions and other factors that could influence actual results
and are incorporated herein by reference.
SOURCE Africa Oil Corp.