Farewell AOI - a new transformed AFRICA OIL rises from the ashes!
The $AOI.to year 2022 started off on a high note with the massive discovery at Venus, but ended on a disappointing note as the promising Gazania well in SA failed to deliver, coupled with various delays.
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The $AOI.to year 2022 started off on a high note with the massive discovery at Venus, but ended on a disappointing note as the promising Gazania well in SA failed to deliver, coupled with various delays.
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The struggles continued into 2023, marked by the failure of the critical Nara well in Namibia. AOI was compelled to exit the challenging Kenyan political environment where a capital-constrained operator repeatedly delayed progress and failed to secure funding & achieve production
AOI’s former CEO Hill struggled to find and close deals that could have strengthened the company through additional production.
In mid-2023, Dr. Roger Tucker was appointed CEO, taking over a company with a weak and unclear ownership structure and no strong, active shareholders.
In mid-2023, Dr. Roger Tucker was appointed CEO, taking over a company with a weak and unclear ownership structure and no strong, active shareholders.
Tucker set out on a mission to streamline AOI’s asset portfolio and implement a strategy aimed at reducing risk while maximizing shareholder returns and asset value.
At the end of 2023, instead of accepting a low bid for the entire stake in Impact Namibia, AOI, under Tucker’s leadership, pursued a strategy to farm out around half of Impact Namibia holdings.
This move allowed AOI to retain a significant stake in the promising Venus discovery, projected to reach significant profitable production by 2029.
TotalEnergies unveiled a plan for the first Venus FPSO, with indications of a second FPSO likely to follow shortly thereafter.
TotalEnergies unveiled a plan for the first Venus FPSO, with indications of a second FPSO likely to follow shortly thereafter.
As the project progresses, more FPSOs are likely to be added. AOI now holds a 3.8% effective interest in the Venus discovery, down from 6.2% (-39%), but with the potential for those remaining barrels to grow both in numbers and value as production nears.
Present drilling campaign, spud 20 October, is expected to enhance the asset’s value.
Through strategic deals, including partnerships with BTG Pactual, AOI has simplified its ownership structure, making it more attractive for potential takeover bids by majors like TotalEnergies.
Through strategic deals, including partnerships with BTG Pactual, AOI has simplified its ownership structure, making it more attractive for potential takeover bids by majors like TotalEnergies.
Tucker’s disciplined execution has led to several key achievements:
•Farmed out over half of AOI’s stake in Namibia to TotalEnergies, securing long-term value.
•Increased the effective interest in Namibia to 3.8% through subsequent deals.
•Farmed out over half of AOI’s stake in Namibia to TotalEnergies, securing long-term value.
•Increased the effective interest in Namibia to 3.8% through subsequent deals.
•Secured a favorable farm-out of part of the Orange Basin (3B/4B) in South Africa to TotalEnergies, maintaining an 18% stake and gaining two carried wells, with drilling anticipated in spring 2025.
•Enhanced its ownership in the 3B/4B block via a deal with ECO, eliminating future ECO liabilities.
•Established a consolidation with BTG Pactual, achieving 100% joint direct ownership in Prime Nigeria’s producing assets.
•Established a consolidation with BTG Pactual, achieving 100% joint direct ownership in Prime Nigeria’s producing assets.
•Revised its dividend policy, tripling shareholder distributions (likely more).
As a result of this focused strategy, AOI is set to emerge as a stronger company by Q1 2025, characterized by:
•A new name and a stable, long-term ownership structure.
As a result of this focused strategy, AOI is set to emerge as a stronger company by Q1 2025, characterized by:
•A new name and a stable, long-term ownership structure.
•A solid balance sheet and direct ownership in producing assets.
•Better cost control and reduced risk exposure.
•The ability to pay substantial dividends while continuing to grow in a low risk way.
•Valuable assets in Namibia w/ increasing worth as development progresses
•Better cost control and reduced risk exposure.
•The ability to pay substantial dividends while continuing to grow in a low risk way.
•Valuable assets in Namibia w/ increasing worth as development progresses
•High-quality reserves with premium oil and low lifting & operational costs.
With the restructuring largely complete, AOI is poised to deliver good value to shareholders starting in spring 2025.
With the restructuring largely complete, AOI is poised to deliver good value to shareholders starting in spring 2025.
The company is positioned for low-risk, high-reward growth, thanks to these strategic deals, premium dividends, and TotalEnergies’ operational expertise.
Even if the share price doesn’t immediately recover, successful drilling and strong financials should gradually attract new investors, eventually boosting the share price.
The Venus discovery, along with potential in the Mangetti/Tamboti-1X appraisal, could yield 4-5 billion barrels of recoverable oil at 40% RF [my estimate - no official estimate yet], with further upside if southern prospects prove successful.
The value of the "new AOI" will grow steadily as production nears, promising significant returns for shareholders.
Despite a challenging 2024 with falling oil and share prices, AOI’s recent transformation lays a solid foundation for long-term growth and investor confidence. /END
Despite a challenging 2024 with falling oil and share prices, AOI’s recent transformation lays a solid foundation for long-term growth and investor confidence. /END
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