Africa Oil Corp (TSX:AOI) told investors that TotalEnergies has renewed its Oil Mining License (OML) 130 for 20 years, noting that it has an effective 8% interest in the license through its 50% shareholding in Prime Oil & Gas Coöperatief.
The Canadian oil and gas company said the renewal of OML 130 means the Akpo, Egina and Preowei fields will operate under the terms of Nigeria’s new Petroleum Industry Act (PIA), becoming the first assets to effectively benefit from the PIA fiscal terms.
"The renewal of OML 130 is very good news for the company and its shareholders,” Africa Oil president and CEO Keith Hill said in a statement.
“This license is the core of our Nigerian investment and accounts for most of Prime's production and cashflows. It also includes attractive growth opportunities such as the undeveloped Preowei oil discovery, which we can now take forward towards a final investment decision. Additional opportunities include step-out exploration and appraisal drilling, that should support production rates over the coming years.”
The company said the license renewal also means Prime can proceed with the closing of its debt refinancing allowing it to enhance its debt capacity, reset its tenor to six years and increase near-term liquidity. It will also provide the scope for Prime to distribute dividends to shareholders including Africa Oil.
“Africa Oil has a debt-free balance sheet with significant liquidity headroom and a balanced portfolio of production and development assets in Nigeria, plus the industry's most exciting appraisal and exploration campaign in Namibia's offshore Orange Basin,” Hill continued.
“Drilling at the Venus-1A well is progressing well and we look forward to updates from the operator in the coming weeks.”
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