Africa Oil Corp.’s investee company, Impact Oil & Gas Limited, has completed the farm-down of its interests in Blocks 2912 and 2913B offshore Namibia to TotalEnergies EP Namibia B.V.
As part of the deal, Impact has also received a cash payment of approximately N$1.7 billion (US$99 million) as reimbursement for its share of costs incurred on the Blocks, net to the Farm Down interests, prior to January 1, 2024.
Impact has, however, retained a 9.5% interest in each of the Blocks and will benefit from a carry loan for all its remaining development, appraisal, and exploration costs on the Blocks until the date on which Impact receives the first sales proceeds from oil production on the Blocks.
The carry loan, according to the deal, is repayable from a share of Impact’s after-tax cash flows, net of all joint venture costs, including capital expenditures, from production on the Blocks.
“We are pleased to have received approval from the Government of Namibia for our farm-out and look forward to continuing our journey towards first oil in Namibia. This is a transformational transaction for the Company, securing Impact’s future participation in this exciting play. Additionally, this transaction, through the carry, gives Impact a funded exposure to further significant exploration opportunities in the Blocks, starting with the recently spud Tamboti-1X well,” Siraj Ahmed, Chief Executive Officer of Impact said.
“We look forward to continuing our longstanding partnership with NAMCOR, TotalEnergies and QatarEnergy, and would like to thank the TotalEnergies team for their ongoing collaboration.”
Africa Oil President and CEO Roger Tucker said, “ the Farm Down allows Africa Oil to retain a funded interest in the Venus development project that is expected to add significant reserves and production to our portfolio. We also believe there is tremendous exploration upside on the Blocks, starting with the recently spud Tamboti-1X well.”
“The Farm Down completion also satisfies a condition precedent to the amalgamation to effect the consolidation of all of Prime Oil & Gas Coöperatief U.A. in Africa Oil. We expect to close the amalgamation during the first quarter of 2025, which will then allow us, subject to customary Board approvals, to implement the enlarged shareholder returns program, as previously communicated in our Prime consolidation press release of June 24, 2024.”
Africa Oil currently has a shareholding of approximately 32.4% in Impact, with an option to increase to 39.5%, representing an effective economic interest of approximately 3.8% in the Blocks.
This development comes as planning is progressing for the first development area following the 2022 Venus-1X discovery well. Four further exploration and appraisal wells have been drilled on the Blocks to date, and of the five wells drilled, four have successfully penetrated and tested the Venus field.
The development scheme, according to Africa Oil, is expected to be finalized by the end of 2025.
Africa Oil Corp. is a Canadian oil and gas company with producing and development assets in deepwater Nigeria and an exploration/appraisal portfolio in West and Southern Africa. It is listed on the Toronto Stock Exchange and on Nasdaq Stockholm.
