Africa Oil Corp., Chairman of the Board, John Craig publishes a letter to the shareholders.

Dear Africa Oil shareholders,

I am pleased to write to you as we near end of 2021, a very strong year for your company. Our success is underpinned by our investment in Prime Oil and Gas Cooperatief UA (“Prime”). With its strong production and cash flow performance, Prime has served us very well during the most volatile and challenging period for the industry. Your Board of Directors continue to be very positive on this investment and we are confident that it provides us with a stable platform to support future investment opportunities and return of capital to you.

Our notable 2021 achievement is the deleveraging of our balance sheet that was the priority goal for the Board. This was accompanied by an attractive refinancing of Africa Oil’s corporate loan that saw a substantial reduction in our cost of borrowing and an enhanced maturity profile. I am delighted that we are ahead of our plan to reduce debt, having reached a debt-free corporate balance sheet ahead of expectations. This provides us with the flexibility to expand and accelerate our capital allocation plans in a disciplined manner. We must strike the right balance between maintaining an appropriate cash buffer, stable balance sheet and allocating capital for shareholder returns and acquisitions.

The Board have discussed shareholder capital return options and are supportive of implementing the selected program in the new year. The details are being finalised and will be communicated to you with the company’s full-year results in February 2022, subject to obtaining the external approvals.

The Board of Directors are also pleased with the work undertaken by management to improve Africa Oil’s ESG performance, particularly in relation to our greenhouse gas emissions. Africa Oil published its maiden ESG Review earlier this year. This was an important milestone to re-iterate that management and the Board recognize the importance of maintaining robust governance systems for identifying, disclosing and managing climate risk, in line with our commitment to prioritize ESG performance. The company has also made the strategic appointment of the VP of ESG with leadership responsibility to implement these systems. Management are working with our partners to identify and advance opportunities to reduce and offset our emissions.

As I look forward to next year, I am confident that Africa Oil is in great shape to take advantage of the recovery from the COVID-19 pandemic, whilst being resilient to the short term setbacks. We have an exciting outlook with a number of attractive catalysts for shareholder value creation across our balanced portfolio, supported by a healthy financial footing. I thank you for your support and I wish you a happy festive period and new year.

Yours faithfully,

John Craig, Chairman of the Board
December 16th, 2021

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