Afentra plc ('Afentra' or the 'Company'), an upstream oil and gas company listed on AIM and focused on acquiring production and development assets in Africa, is pleased to announce that, further to the announcement made on 19 July 2023 regarding the proposed acquisition of interests in Block 3/05 and Block 3/05A from Azule Energy Angola Production B.V. ('Azule') (the 'Azule Acquisition') and the amendment to the terms of the SPA with Sonangol dated 20 April 2022 to reduce the interest being acquired by Afentra in Block 3/05 from 20% to 14% (the 'Amended Sonangol Acquisition'), and together with the Azule Acquisition (the 'Acquisitions), an Admission Document in relation to the Acquisition and Notice of General Meeting to approve the Acquisitions will be posted to shareholders today and is available to download from the Company's website.
Following the publication of the Admission Document, the Company anticipates that the suspension of the trading in the Company's shares will be lifted and that trading in the Company's Ordinary Shares will recommence at 8.00am BST this morning.
Highlights from the Admission Document
Increased equity in a material Production and Development Portfolio1
· Combination of existing equity and the Azule and Amended Sonangol acquisitions deliver a material equity position in both Block 3/05 (30%) and Block 3/05A (21.33%)1,2
· Net 2P reserves of approx. 33 mmbbls1,3 and net 2C resources of approx. 20 mmbbls1,3,4
· Production of approx. 5,700 bbl/d net (including production from Block 3/05A)6
· Exposure to significant upside potential through improved recovery from over 3 billion bbls of OIIP in Block 3/053 and development of multiple fully appraised discoveries in Block 3/05A
· Decommissioning costs to date have been substantially pre-funded by previous and existing JV partners5
Value Accretive Deals in an Attractive Investment Environment
· Azule Acquisition and Amended Sonangol Acquisition are expected to complete by the end of 2023 and will benefit from the accrued cash flow associated with the net interests from the respective effective dates (Amended Sonangol Acquisition: 20 April 2022, Azule Acquisition: 1 October 2022)
· Azule production benefits from higher inherited cost pool and more advantageous contingent payment structure
· Extension of Block 3/05 until December 2040 provides significant runway for the Joint Venture Partners to invest and realise the upside value from the assets
Improvements to asset performance positively impacting delivery
· Block 3/05 production increased following a programme of successful light well interventions with gross production rates now exceeding 20,000 bbl/d (H1 23 average 18,000 bbl/d)
· Extended production test on Block 3/05A delivering flow rates of approx. 1,450 bbl/d and providing critical information to allow partners to establish the long-term resource potential and appropriate development strategy
· Reserves replacement of 150% in 1H 20237
Re-admission process and key timings
· Resumption of trading, and commencement of dealings on AIM of the Company's existing Ordinary Shares expected to become effective at 8:00am BST
· Admission Document available to download from the Company's website in accordance with the AIM Rules: https://afentraplc.com/wp-content/uploads/2023/09/c120747CCL.pdf
· The general meeting to approve the Acquisition will be held electronically on https://web.lumiagm.com/ at 10.00am BST on 5 October 2023.
· Both Acquisitions anticipated to complete by the end of 2023
· Admission of enlarged group to trading on AIM expected by the end of 2023
Management Presentation - 20 September 2023
Afentra will be hosting a Management presentation audiocast via Investor Meet Company on 20 September 2023 at 10.00am BST (https://www.investormeetcompany.com/afentra-plc/register-investor) and a short accompanying presentation will be uploaded to the Afentra website: https://afentraplc.com/investors/.
Analysts and investors wishing to participate in the Q&A session can do so by pre-submitting questions via the Investor Meet Company platform or via the chat function of the live presentation, and these will be addressed by management during the audiocast.
Commenting on the update, CEO Paul McDade said:
"We are pleased to see Afentra's shares recommence trading after a short suspension associated with these value enhancing transactions. The assets are performing strongly and Afentra will continue to benefit from the associated production from both 3/05 and 3/05A from the respective effective dates up until completion which ensures the Company is accruing strong cash flow that can be used to offset the firm consideration at completion. We look forward to completing both transactions in the coming months, at which point Afentra will have meaningful interests in these high quality and strategically complementary assets, and will be underpinned by strong cash flow, proven reserves and material upside that we intend to realise alongside our asset partners. I'd like to thank all our shareholders for their support through the suspension period and look forward to rewarding their patience as we demonstrate to the market the value enhancing nature of the transactions which will be further strengthened by the improvements to the fiscal terms which are currently proceeding through the approval process. We look forward to updating the market as we deliver the various milestones towards completing these transformative transactions."
