Afentra has announced its annual results for the year ended 31 December 2022.
2022 SUMMARY
Strategic
- SPAs signed to acquire non-operated interests from Sonangol and INA in the producing Block 3/05 (24%), adjacent development Block 3/05A (4%) and exploration Block 23 (40%).
- Reverse takeover ('RTO') announced under Rule 14 of the AIM Rules to acquire Block 3/05.
- Publication of Admission Document followed by shareholder approval on 30 August 2022.
- Stakeholder engagement across governmental, regulatory authorities and industry counterparties in Angola continues to demonstrate the country as an attractive operating and investment jurisdiction.
- Strengthened organisation with recruitment of high calibre financial, technical and sustainability talent.
- Continued to screen and evaluate compelling M&A opportunities in line with the Company strategy.
- Investor outreach and marketing, appealing to new institutional and high net worth investors.
- Continued to strengthen Afentra's profile within industry as a credible counterparty of choice.
Operations
- Progressed Angolan transactions to acquire interests in Blocks 3/05, 3/05A and Block 23.
- Independent ESG due diligence conducted as an integral part of the Block 3/05 and 3/05A assessment and to identify potential options to reduce emissions.
- Invited to observe all Block 3/05 and Block 3/05A partner meetings and engage with operating team while awaiting transaction completion.
- Support the Operator of the Odewayne block in Somaliland to progress the technical understanding of the block and outlook on block prospectivity, as well as contributing to the drought relief programme.
Financial Highlights
- Entered into financing and offtake agreements with Trafigura to finance Sonangol and INA Acquisitions:
- Reserve Based Lending ('RBL') facility: up to $75 million with 5-year tenure (8% margin over 3-month secured overnight financing rate ('SOFR'));
- Revolving working capital facility: up to $30 million to finance asset funding requirements between crude offtakes (4.75% over 1-month SOFR);
- Offtake agreement for Afentra's crude oil entitlement lifted from the Acquisitions.(1)
- Cash resources net to the Group at 31 December 2022 of $30.6 million (2021: $37.7 million), including restricted funds of $10.2 million.
- Adjusted EBITDAX:(2) loss for the Group of $5.2 million (2021: $2.0 million loss).
- The Group remains fully carried for Odewayne operations for Third and the Fourth Period.
Post year-end Summary(3)
- Completion of the INA acquisition announced 10 May 2023, marking Afentra's formal entry into Angola.
- Net completion payment of $17.0m with Afentra inheriting crude oil stock of 207,868 bbls4 that can be valued at $16.6 million (based on $80/bbl) on a pre-tax basis.
- Mauritius Commercial Bank ('MCB') has entered both the RBL and working capital facilities as the lender to the Company. Trafigura retains an interest in the RBL facility and will continue as offtake provider.
- The Sonangol acquisition long-stop date was extended to 30 June 2023 in order to facilitate completion of the transaction.
- ANPG and the Block 3/05 JV partners agreed the improved terms for the licence extension (1 July 2025 to 31 December 2040). ANPG will now progress the formal approval process.
- Afentra completed an updated Competent Persons Report ('CPR') on Block 3/05 effective 1 January 2023, estimating 1P/2P/3P reserves of 72/108/145 mmbbls (gross) and 2C resources of 43 mmbbls.
Commenting on the update, CEO Paul McDade said:
'2022 has been a year in which Afentra has truly established itself as a respected oil and gas independent. Our focus on value accretive M&A, accessing proven resources and delivering robust cash flows has been evidenced by our two inaugural acquisitions. These highly cash generative transactions provide an entry into Angola, a target country for the Company and provide a platform from which we plan to access further opportunities.
Despite a reduced financing market in the oil and gas space, Afentra has been successful in securing financing packages for both INA and Sonangol acquisitions and maintains a strong cash position which will support potential future transactions.
With the completion of the INA transaction in May, we now look ahead to completing the Sonangol transaction, and working with the partnership to deliver the significant potential of these assets. Beyond this, we continue our ongoing business development efforts to seek further acquisitions in line with Afentra strategy and purpose.'
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Source: Afentra
