Africa Oil reports 2018 fourth-quarter, full-year results

March 03, 2019

Editors Note: Included below is an edited view of Africa Oil's report, referencing upstream related results. For the full report, please visit the company's website.

VANCOUVER -- Africa Oil Corp. is pleased to announce its financial and operating results for three months and year ended Dec. 31, 2018.

Highlights

The company ended the year with cash of $370.3 million and working capital of $340.7 million;
On Feb. 6, 2019, a significant discovery was announced at the Brulpadda-1AX well on Block 11B/12B offshore South Africa. Africa Oil holds an indirect interest in the project as a result of its equity interests in Africa Energy Corp (34.5% ownership interest) and Impact (30.1% ownership interest);
During the fourth quarter, the Company received the fourth and final $18.75 million advance development carry payment from Total (total received during 2018: $75 million);
South Lokichar basin (Blocks 10BB and 13T – Kenya) appraisal and development planning activities continue. Work has concluded in both the Amosing and Ngamia fields, where water injection testing took place at Ngamia-11 with oil production from the Ngamia-8 well. The Ngamia-3 well also successfully started production in June 2018. The produced oil from testing has been stored in the field. A comprehensive review of results from this program commenced in the third quarter of 2018;
The transfer of stored crude oil from Turkana to Mombasa by road continues, with trucks continuing to be dispatched, transporting approximately 600 bopd. To date, approximately 60,000 bbl of oil has been transported to Mombasa. The volume of oil transported by truck is expected to increase to 2,000 bopd once the Early Oil Production System is fully operational and production testing commences from the Amosing production facility. The first lifting of sweet Kenyan crude oil stored in Mombasa is expected in the second quarter of 2019;
Front End Engineering and Design (FEED) and Environmental and Social Impact Assessment (ESIA) work associated with the upstream South Lokichar development project continues, following the award of the upstream FEED and Integrated Project Management contracts to WorleyParsons during the second quarter;
Pipeline FEED and ESIA are nearing completion, with FEED awarded to Wood Group;
The Joint Venture Partners (Blocks 10BB and 13T – Kenya) continue to negotiate key commercial Heads of Terms with the Government of Kenya, related to agreements expected to establish the commercial structure associated with field development;
In October 2018, the company announced it had entered into a share purchase agreement to acquire an effective 12.5% ownership interest in a company who holds interests in multiple producing and developing fields offshore Nigeria (please refer to press release dated Oct. 31, 2018). Completion of the transaction is subject to customary conditions precedent, including Nigerian Government consent; and
During the fourth quarter, following on from the initial investment in the first quarter, the Company increased its ownership interest in Impact Oil and Gas Limited by investing $14.1 million. An additional $6.3 million was invested subsequent to year end. Africa Oil currently owns approximately 30.1% of Impact.

Africa Oil Corp. has a 25% working interest in Blocks 10BB and 13T with Tullow Oil plc (50% and Operator) and TOTAL S.A. (25%) holding the remaining interests.