Africa Oil Corp (TSX:AOI) said it has signed two production-sharing contracts (PSCs) with the Republic of Equatorial Guinea for offshore Blocks EG-18 and EG-31, subject to ratification by the country's government.
Under the PSCs, Africa Oil will hold 80% operated interests in each block with the balance to be held by GEPetrol, the national oil company of Equatorial Guinea. GEPetrol has the option of acquiring an additional 15% participating interest in each block. Both blocks are covered by 3D seismic data and the total minimum work commitment for both blocks in the initial exploration periods is a combined total of US$7 million, with no drilling commitment.
In a statement, Africa Oil president and CEO Keith Hill commented: "I am pleased to announce our entry into Equatorial Guinea with two highly-prospective offshore blocks. While we continue our primary focus on cash-flowing production assets in order to underpin sustainable shareholder distributions, we still look to add exploration blocks with attractive fiscal terms in advantaged areas where discoveries can be quickly appraised and brought on stream."
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He added: “Block 31 offers the potential for low-risk gas prospects that are in a proven petroleum province with infrastructure and ullage for significant additional volumes of gas. In Block 18 we see a large turbidite fan that is reminiscent of some of our large discoveries in Namibia and South Africa. These blocks offer high-impact value upside for our shareholders at relatively low cost, and we look forward to continued collaboration with the government of Equatorial Guinea to explore and develop its natural resources."
In Block EG-31, Africa Oil has identified several gas-prone prospects in shallow water depths of less than 80 meters (m) and close to existing infrastructure, including the offshore Alba gas field and the onshore Punta Europa Liquefied Natural Gas (LNG) Terminal. Potential future discoveries could present low-cost, low-risk gas development opportunities targeting international LNG markets.
In Block EG-18, Africa Oil has identified a potentially large and highly prospective basin floor fan prospect of Cretaceous age, that is similar to those within the company's exploration portfolio in Namibia and South Africa.
Share buy-back results
In a separate statement, Africa Oil said it repurchased a total of 9,600 of its common shares during the period from February 13, 2023, to February 17, 2023, under its previously announced share buyback program.
During the period dated February 13, 2023, to February 17, 2023, the company repurchased 4,500 Africa Oil common shares on the TSX and/or alternative Canadian trading systems. The repurchases were carried out by Scotia Capital Inc on behalf of the company. During the same period, the company repurchased 5,100 Africa Oil common shares on Nasdaq Stockholm, and these repurchases were carried out by Pareto Securities on behalf of the company.
All common shares repurchased by Africa Oil under the share buyback program will be cancelled. During the period dated February 13, 2023, to February 17, 2023, the company cancelled 635,400 common shares repurchased under the share buyback program.
Since September 27, 2022, up to and including February 17, 2023, a total of 20,168,073 Africa Oil common shares have been repurchased under the share repurchase program through the facilities of the TSX, Nasdaq Stockholm and/or alternative Canadian trading systems.
A maximum of 40,482,356 Africa Oil common shares may be repurchased under the share buyback program through the facilities of the TSX, Nasdaq Stockholm and/or alternative Canadian trading systems over the period of 12 months commencing September 27, 2022, and ending September 26, 2023, or until such earlier date as the share repurchase program is completed or terminated by the company.
Africa Oil is a Canadian oil and gas company with producing and development assets in deep water Nigeria; development assets in Kenya; and an exploration/appraisal portfolio in various countries in West and South Africa, as well as Guyana.
Contact the author at jon.hopkins@proactiveinvestors.com