VANCOUVER, BC, Feb. 26,
2024 /CNW/ - (TSX: AOI) (Nasdaq-Stockholm:
AOI) – Africa Oil Corp. ("Africa Oil", "AOC" or
the "Company") announces the posting of its 2023 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
2023, 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
Highlights1
- Year-end ("YE") 2023 reserves determination has resulted in a
small increase in the after-tax Proved reserves ("1P") NPV(10)
valuation of $722 million (YE'22:
$714 million)2. The
increase in 1P reserves valuation is net of total dividend payments
of $175 million by Prime to Africa
Oil during 2023.
- YE'23 reserves determination has delivered an after-tax Proved
plus Probable reserves ("2P") NPV(10) valuation of $1,192 million (YE'22: $1,232 million)2. The change in 2P
reserves valuation is net of total dividend payments of
$175 million by Prime to Africa Oil
during 2023.
- YE'23 working interest ("W.I.") and net entitlement3
1P reserves of 29.9 MMboe (YE'22: 34.6 MMboe) and 35.6 MMboe
(YE'22: 41.3 MMboe), respectively.
- YE'23 W.I. and net entitlement 2P reserves of 52.2 MMboe
(YE'22: 55.6 MMboe) and 59.6 MMboe (YE'22: 63.9 MMboe),
respectively.
Africa Oil Chief Executive Officer, Dr Roger Tucker, commented on the statement of
reserves: "I am pleased to report robust year-end 2023 reserves
for Africa Oil. Our assets offshore Nigeria have performed in line with our
expectation and continue to provide us with significant high
netback production. Furthermore, with the renewal of OML 130 and
the anticipated renewal of OML 127, both for 20 years, these assets
will provide Africa Oil with long life reserves in three of
Nigeria's top producing assets.
There is also considerable scope for low-risk, high-return
investment opportunities in the license areas, such as the Preowei
development project, that will support production in the coming
years."
Africa Oil's statement of reserves is based on the Company's 50%
ownership interest in Prime Oil & Gas Coöperatief U.A
("Prime"). Prime's main assets are an indirect 8% interest in Oil
Mining Lease ("OML") 127 and an indirect 16% interest in OML
1304; both are deep-water Nigeria concessions. OML 127 is operated by
the affiliates of Chevron Corporation and contains the producing
Agbami field. OML 1304 is operated by affiliates of
TotalEnergies SE and contains the producing Akpo and Egina fields
and the undeveloped Preowei field.
Notes:
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|
1
|
Please refer to the oil
and gas advisory on page 4 for important information.
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2
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Based on Brent oil
price forecast of ($/bbl): 2024 - $82.0; 2025 - $78.0; 2026 -
$78.8; 2027 - $80.8; 2028 - 82.8; 2029 and beyond escalation rate
of 2.5%.
|
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.
|
4
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Renewal of the rights
under OML 130 in 2023 resulted in the award of three new production
leases and one prospecting license. These cover some of the areas
previously covered by OML 130, with some of the areas also
relinquished. These are PML 2 (Akpo field), PML 3 (Egina), PML 4
(Preowei) and PPL 261 (South Egina).
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5
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All dollar amounts in
this press release are U.S. Dollars unless otherwise
indicated.
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The YE'23 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)
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|
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
|
15.6
|
19.9
|
9.2
|
9.2
|
-
|
-
|
Developed
Non-Producing
|
-
|
-
|
-
|
-
|
-
|
-
|
Undeveloped
|
10.0
|
11.5
|
15.6
|
15.6
|
-
|
-
|
Total
Proved
|
25.7
|
31.4
|
24.9
|
24.9
|
-
|
-
|
Probable
|
18.0
|
19.6
|
26.4
|
26.4
|
-
|
-
|
Total Proved plus
Probable
|
43.6
|
51.0
|
51.3
|
51.3
|
-
|
-
|
Possible
|
16.0
|
16.2
|
32.3
|
32.3
|
-
|
-
|
Total Proved plus
Probable plus Possible
|
59.6
|
67.2
|
83.6
|
83.6
|
-
|
-
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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.
|
W.I. reserves are lower than the previous year primarily due to
W.I. production of 7.2 MMboe, which was offset by upwards technical
and economic revisions of 2.3MMboe of Proved plus 1.3MMboe of
Probable Reserves. The technical revisions were as a result of
improved performance at Agbami and the maturation of contingent gas
resources to developed resources at Akpo.
The following table provides a reconciliation between the Gross
W.I. Reserves disclosed on the 27 February
2023 (effective date 31 December,
2022) and this disclosure (effective date 31 December, 2023).
Gross
|
Light and Medium Oil
(MMstb)
|
Conventional Natural
Gas (Bscf)
|
|
Proved
|
Probable
|
Proved +
Probable
|
Proved
|
Probable
|
Proved +
Probable
|
Effective date 31
December 2022
|
29.1
|
18.3
|
47.4
|
32.9
|
16.5
|
49.4
|
Extensions and Improved
Recovery
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
Resource
Transfers
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
0.0
|
Technical
Revisions
|
1.9
|
-0.2
|
1.8
|
1.4
|
10.1
|
11.5
|
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
|
0.2
|
-0.2
|
0.1
|
0.1
|
-0.1
|
0.0
|
Production
|
5.6
|
0.0
|
5.6
|
9.5
|
0.0
|
9.5
|
Effective date 31
December 2023
|
25.7
|
18.0
|
43.6
|
24.9
|
26.4
|
51.3
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Notes:
- Figures in table may not add precisely due to
rounding.
- Gross Company Reserves are the total project
sales volumes multiplied by AOC's share of Prime's working
interest.
- RISC notes that the Proved + Probable
Reserves reconciliation for oil and gas is lower than the Proved in
some categories. This results in a negative Probable increment. The
difference is due to a larger increase in Proved Reserves than the
Proved + Probable, compared to last year.
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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 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". For further information, please
contact:
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 6:30p.m. ET on February
26, 2024.
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 2023 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): 2024 - $82.0; 2025 -
$78.0; 2026 - $78.8; 2027 - $80.8; 2028 - 82.8; 2029 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,
2023. 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, 2023 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.