Africa Oil Corp. has recorded $0.4 million in net income attributable to common shareholders, well below the $106.9 million reported for the second quarter of 2023.
“It was an incredibly busy first half of the year as we signed three strategic transactions, taking Africa Oil towards the next phase of value creation and shareholder returns”, Africa Oil President and CEO Roger Tucker said in a company statement. “We have high-quality development projects, high-impact exploration, and appraisal catalysts that will all be funded on completion of these deals. The quality of our organic growth opportunity set is demonstrated by the size and caliber of our partners”.
“The Prime consolidation, once closed, will see the roll-out of a new transparent capital allocation framework and will create scope for a significantly enlarged capital returns program for our shareholders. Africa Oil stands with a differentiated investment case of offering sustainable shareholder returns, significant organic growth opportunities, and is well-positioned to pursue new opportunities on the back of a strong balance sheet”, Tucker said.
In the second quarter of 2024, Prime’s revenues decreased by $4.3 million compared to the same quarter in 2023. This decline was primarily due to the absence of Petroleum Profit Tax (PPT) and royalty revenue. Since August 2023, no PPT revenue has been reported as Prime began lifting its entitlement production and paying its taxes in cash. Additionally, no royalty revenue has been reported, as Petroleum Mining License (PML) 52 royalties are being paid in cash and presented in the cost of sales, Africa Oil said.
Sales costs increased by $32.3 million, mainly due to an uplift movement of $23.8 million, resulting in a gross profit decrease to $95.8 million, from $132.4 million for the corresponding quarter in 2023.
In June, Africa Oil agreed with BTG Pactual Oil & Gas S.a.r.l. and BTG Pactual Holding S.a.r.l. to reorganize and consolidate their 50:50 shareholdings in Prime. After the reorganization, Africa Oil will hold 100 percent of Prime, while BTG Oil & Gas will receive newly issued common shares in Africa Oil, representing approximately 35 percent of the outstanding share capital of the enlarged Africa Oil.
The expanded Africa Oil is expected to have substantial size, strong long-term free cash flows, and a low debt balance sheet, it said. This will be driven by large-scale, high netback assets in deepwater Nigeria, complemented by funded development and exploration projects in the productive Orange Basin, according to Africa Oil. The proposed reorganization is expected to be completed by the third quarter of 2025.
Source: rigzone.com