Africa Oil

Primary ticker: TSX:AOI; OMX:AOI
Stage of development: Exploration, Production
Project types: Oil – conventional onshore, Oil – conventional offshore, Gas – conventional onshore, Gas – conventional offshore, Deepwater drilling, Infrastructure (pipelines, refineries, terminals etc.)
Project to promote: South Lokichar – Kenya

Live financials

Africa Oil is a Canadian oil and gas company with development and exploration assets in Kenya and South Africa and equity investments in Africa Energy Corporation, Eco (Atlantic) and Impact Oil & Gas. Through these investments the company has material exposure to high impact exploration campaigns offshore Guyana, Namibia and South Africa. Africa Oil’s strategy is to leverage its strong balance sheet and portfolio of assets to become a leading Africa-focused and full-cycle E&P company.

Management Profile

Keith Hill, President and CEO

Mr. Hill has been Africa Oil’s President and CEO since 2009. He has over 35 years’ experience in the oil industry including over 20 years with the Lundin Group as well as international new venture management and senior exploration positions at Occidental Petroleum and Shell Oil Company. Mr. Hill is the former President and CEO of BlackPearl Resources Ltd., Valkyries Petroleum Corp. and ShaMaran Petroleum Corp. His education includes a Master of Science degree in Geology and Bachelor of Science degree in Geophysics from Michigan State University as well as an MBA from the University of St. Thomas in Houston.

What is your rationale for attending 121 Oil & Gas Investment?

We are delighted to join 121 Oil & Gas Investment forum in London to raise our profile with investors and to provide an update on our portfolio of development and exploration assets.

What recent news would you like to highlight to investors attending?

We would like to highlight progress on our South Lokichar project in Kenya, including the first ever oil cargo export (240,000 bbls) from the country that was supplied by the project’s Early Oil Production System. We have also had a very successful year of creating shareholder value through our investments in Africa Energy and Eco (Atlantic) with three major discoveries in 2019. These successes underpin a current mark-to-market portfolio valuation of USD ~170 million that compares to a total investment cost of USD ~70 million.

What are your key goals for the next 3,6 and 12 months?

3 Months:

Closing of the POGBV transaction to acquire deepwater producing oil assets in Nigeria. This would provide us with a material production base that will transition us into a fee cash flowing full-cycle E&P company.

6 Months:

Targeting other asset acquisition and corporate opportunities with a focus on production opportunities to grow our portfolio and footprint in Africa.

12 Months:

Final Investment Decision for Phase 1 of the South Lokichar full-field development project that is targeting plateau production (gross field) of 60,000-80,000 barrels of oil per day and possibly monetise the value in our exploration investment companies portfolio.

What do you see as the key risks and challenges facing your company at the moment and how are you overcoming these?

We believe that our most immediate challenge is to grow and maintain traction with investors against a deteriorating macroeconomic backdrop and perceived growing public opposition to the oil and gas industry. We believe in a responsible energy transition with an evolving energy mix that strikes the right balance to address the world’s future energy demands and environmental concerns. We will continue to communicate our support for strategic projects in emerging markets that can substantially improve the living standards of our local stakeholders. These include investments in community projects that bring immediate benefits in terms of training, education and services.

What do you think makes your company such a compelling investment?

We believe that our share price presents an attractive investment opportunity, with our current market cap of USD ~400 million being substantially below the aggregate cash and investment portfolio valuation of USD ~510 million. This implies that our interest in the South Lokichar project is available as a zero-cost option. Furthermore, the market is discounting the company’s potential to create shareholder value based on the efforts of our highly experienced management and technical teams. These have demonstrated successful track records of significant petroleum discoveries and value accretive corporate activities internationally.