The new licence will cover the producing Tilapia oil field, located in the Republic of the Congo. The group confirmed that it will have a new 25-year term and Petro Kouiliou will retain its current 56% interest in the field.
In a statement, the company noted that it will now work with the government to finalise the terms of a new production sharing contract.
"This is excellent news for the company,” said David Sefton, AAOG’s executive chairman. “The confirmation that we will receive a new licence represents a major milestone for AAOG and follows hard work by James Berwick and the team through a period of extensive negotiation with the government and the completion of a due diligence review of AAOG by the ministry.
Sefton added: “Renewal of the Licence has always been a critical step in enabling us to put in place plans to maximise production, cashflow, and value from Tilapia.
“Following finalisation of the PSC, we will accelerate our development plans in order to generate significant cash flow and value for all stakeholders. We have long believed in the potential of Tilapia. This potential was demonstrated by the excellent results of the recent TLP103C well.”
In a note to clients, analysts at ‘house’ broker finnCap commented: “While expected, this follows extensive negotiations and is a validation of the work performed by AAOG on the licence. It should also remove any element of remaining doubt for investors.
“Once licence terms are finalised, it will allow management to focus on bringing the Tilapia field into production via either the Djeno or R2/Mengo reservoirs and give it confidence in maturing a long-term full-field development plan.”
finnCap reiterated a 52p price target on the stock, with Anglo African O&G’ shares holding steady at 10p in afternoon trading.
-- Adds analyst comment, share price --