Africa Oil announce 2022 statement of reserves
Africa Oil Corp. announces the posting of its 2022 statement of reserves on SEDAR as part of its Annual Information Form. This disclosure is based on an independent reserves evaluation, effective 31 December 2022, prepared by RISC (UK) Limited (“RISC”) for Africa Oil in accordance with Canadian National Instrument 51-101 – Standards for Oil and Gas Activities (“NI 51-101”) and the Canadian Oil and Gas Evaluation Handbook (“COGE Handbook”). Africa Oil’s statement of reserves is based on the Company’s 50% ownership interest in Prime Oil & Gas Coöperatief U.A (“Prime”).
Highlights1
• Year-end (“YE”) 2022 reserves determination has delivered an after-tax Proved plus Probable reserves (“2P”) NPV(10) valuation of $1,232 million (YE’21: $1,444 million)2. The change in 2P reserves valuation is net of total dividend payments of $250 million by Prime to Africa Oil during 2022.
• 72% of the produced volumes in the three years since acquiring the 50% shareholding in Prime have been replaced with new Proved (“1P”) W.I. reserves. YE’22 working interest (“W.I.”) and net entitlement3 1P reserves of 34.6 MMboe (YE’21: 48.6 MMboe) and 41.3 MMboe (YE’21: 55.0 MMboe), respectively.
• YE’22 W.I. and net entitlement 2P reserves of 55.6 MMboe (YE’21: 72.8 MMboe) and 63.9 MMboe (YE’21: 82.1 MMboe), respectively.
• 2P W.I. reserves are lower than the previous year primarily due to W.I. production of 8.7 MMboe and technical revision of 8.4 MMboe. The technical revision is mostly due to a reduction in the expected ultimate recovery of the Egina field following the incorporation of production performance and the results of the 4D seismic processed during 2022.
• Acquisition of a new 4D seismic monitoring survey is planned in OML130 during 2023 to aid in identifying future infill drilling targets on both Akpo and Egina fields.
• A multi well drilling programme commenced in late February on OML 130, which is the first major work programme since the Company acquired its 50% shareholding in Prime, and will enhance production performance on Egina and Akpo in 2023 onwards.
Africa Oil Chief Executive Officer, Keith Hill, commented on the statement of reserves: “Since acquiring our 50% shareholding in Prime in January 2020 we have received $650.0 million in dividends from Prime compared to a closing cash consideration of $519.5 million, and we still have a material reserves base that will generate robust production and cash flows for many years to come. One of the larger assets in Nigeria, the Egina field, had a 2P reserves reduction due to changing well performance and a revised understanding of reservoir complexity, based on the information obtained from the 2022 4D seismic provided by the operator. However, we are looking forward to the results of this year’s Egina infill drilling program and the upcoming 2023 4D monitoring survey to help underpin future drilling campaigns and optimize reserves volumes within OML130. There are also multiple attractive development, appraisal and infrastructure-led exploration opportunities on both OML 127 and OML 130, presenting us with low-risk, short-cycle investment opportunities that have very attractive rates of returns.”
Africa Oil’s statement of reserves is based on the Company’s 50% ownership interest in Prime Oil & Gas Coöperatief U.A (“Prime”). Prime’s main assets are an indirect 8% interest in Oil Mining Lease (“OML”) 127 and an indirect 16% interest in OML 130; both are deep-water Nigeria concessions. OML 127 is operated by the affiliates of Chevron Corporation and contains the producing Agbami field. OML 130 is operated by affiliates of TotalEnergies SE and contains the producing Akpo and Egina fields and the undeveloped Preowei field.
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