Africa Oil Announces 2020 Third Quarter Results

Africa Oil Announces 2020 Third Quarter Results

The Company recognized a total operating income of $31.8 million and net income of $21.2 million during the third quarter of 2020. The operating income primarily relates to the Company’s share of profit from its investment in Prime amounting to $32.5 million.

For the nine-month period, the Company recognized a net loss of $97.5 million with a total operating income of $149.1 million being offset by $224.6 million in operating expenses, that primarily relates to the recognition of a $215.6 million non-cash impairment of intangible exploration assets, relating to the valuation of the Kenyan development project and Kenyan Block 10BA.

The Company ended 2020 third quarter with cash of $30.4 million and working capital of $7.3 million in comparison to cash of $329.5 million and working capital of $290.7 million at the end of 2019. The reduction in the Company’s cash position of $299.1 million is primarily attributed to its acquisition of a 50% shareholding in Prime for $519.5 million. This acquisition was funded with a cash payment of $269.5 million and a term loan facility of $250.0 million.


  • The Company has received an additional $50 million in dividends from Prime1 subsequent to the previous reporting period. This brings the total dividends amount to $162.5 million since Africa Oil closed the Prime acquisition on January 14, 2020.

  • Significant progress on deleveraging, including a 34% reduction in the corporate term loan from $250 million to $164.8 million, and a 29% reduction in the Prime RBL facility from $1,825 million to $1,303 million, for the year to date.

  • Africa Oil third quarter net income of $21.2 million and nine-month net income of $118.1 million, excluding a $215.6 million non-cash impairment of Kenya exploration assets posted in the first quarter 2020.

  • Selected Prime’s third quarter 2020 results net to Africa Oil’s 50% shareholding*:
    • average daily working interest (“W.I.”) production3 of 26.9 thousand barrels of oil equivalent per day (“kboepd”) and economic entitlement production4 of 27.8 kboepd with 83% in oil production (nine-month period: W.I. production of 29.5 kboepd and economic entitlement production of 35.3 kboepd with 85% in oil production);
    • sales revenues of $212.5 million (nine-month period: $551.2 million);
    • adjusted EBITDA5 of $99.0 million (nine-month period: $490.3 million); and
    • cash flow from operations of $107.5 million (nine-month period: $438.0 million).

  • Exploration success continued with the Luiperd discovery on Block 11B/12B, offshore South Africa and the farmout of Transkei/Algoa blocks to Shell. 

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