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Africa Energy Reports Second Quarter 2020 Results

Source: 8/13/2020, Location: Africa

Africa Energy Corp., an oil and gas company with exploration assets offshore South Africa and Namibia, announces financial and operating results for the three and six months ended June 30, 2020.

Garrett Soden, the Company’s President and CEO, commented: “We are excited to begin the next phase of exploration drilling on Block 11B/12B offshore South Africa with spud of the Luiperd-1 well this month. Luiperd is the largest prospect in the Paddavissie Fairway and has been de-risked by the nearby Brulpadda discovery and subsequent 3D seismic work.”

Africa Energy expects to commence an extremely active and potentially transformational period with spud of the Luiperd-1 well on Block 11B/12B where the Company holds an effective 4.9% interest. The recent $25.0 million financing and farmout of Block 2B will allow the Company to participate in several high-impact exploration wells offshore South Africa overthe next 12 months. The planned wells are all targeting material prospects with relatively high chances of success.

The Block 11B/12B joint venture operated by Total has embarked on an ambitious exploration program offshore South Africa to follow-up on the large Brulpadda gas condensate and light oil discovery in February 2019. The fully-processed Polarcus 3D dataset confirms the resource potential of the Paddavissie Fairway. The expanded Shearwater 2D seismic survey is complete, and the onboard fast-track processing has identified prospectivity with encouraging seismic indicators across the new Kloofpadda Play Trend to the east. The PGS 3D seismic survey is also complete after being expanded to cover a newly identified potential northern extension to the Luiperd Prospect. The Luiperd-1 well is expected to spud in August 2020 and will target a large submarine fan prospect within the same sequence as Brulpadda.

Management looks forward to closing the Block 2B farmouts whereby the Company will be carried through the next exploration well, Gazania-1, expected to spud in the first quarter of 2021. Block 2B has significant contingent and prospective resources in shallow water close to shore and includes the A-J1 discovery from 1988 that flowed light sweet crude oil to surface. The Gazania-1 well will target two prospects in a relatively low-risk rift basin oil play up-dip from the discovery.

- Africa Energy completed a private placement in February 2020 issuing an aggregate of 104,652,174 common shares at a price of SEK 2.30 (CAD 0.32) per share for gross proceeds of $25.0 million.
- The Company executed two farmout agreements in February 2020 whereby Africa Energy will transfer operatorship and an aggregate 62.5% participating interest in Block 2B offshore South Africa in consideration for $0.5 million in cash plus a carry through the next exploration well. Africa Energy will retain a 27.5% participating interest in Block 2B. Closing of the two farmout agreements is subject to standard conditions, including approval of the South African government.
- Management continues to focus on cost control. For the second quarter of 2020, net cash used in operations was $0.3 million, 55% less than the same period in the prior year.
- At June 30, 2020, the Company had cash of $26.4 million and no debt.
- The Odfjell Deepsea Stavanger semi-submersible rig mobilized from Norway to South Africa in July 2020. The rig is currently in Cape Town, South Africa and is expected to spud the Luiperd-1 well on Block 11B/12B by the end of August 2020.
- The Block 11B/12B joint venture recently received the fast-track 2D seismic dataset from Shearwater for the 7,033 linear kilometer 2D seismic program completed this year. Initial interpretative work has confirmed the Kloofpadda Play Trend, which consists of several large and encouraging leads.
- The Block 11B/12B joint venture also recently received the fast-track 3D seismic dataset from PGS for the 2,305 square kilometer 3D seismic program completed this year. Initial interpretive work has identified a number of additional leads, including a potential northern extension to the Luiperd Prospect.

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