REG - Afentra PLC - 2024 HALF YEAR RESULTS
12/09/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240912:nRSL8565Da&default-theme=true
RNS Number : 8565D Afentra PLC 12 September 2024
12 September 2024
AFENTRA PLC
2024 HALF YEAR RESULTS
Afentra plc ('Afentra' or the 'Company') (AIM: AET), the upstream oil and gas
company focused on acquiring production and development assets in Africa, is
pleased to announce its half year results for the six months ended 30 June
2024 (the 'Period' or 'H1 2024').
Financial Summary
- Pre-tax revenue of $75.7 million (H1 2023: nil)
- Adjusted EBITDAX of $40.8 million (H1 2023: loss of $0.8
million)
- Profit after tax of $22.2 million (H1 2023: loss of $3.9
million)
- Cash resources as at 30 June 2024 of $13.8 million (30 June
2023: $15.7 million)
- Debt drawdowns at 30 June 2024:
o Reserve Based Lending Facility: $47.3 million (30 June 2023: $12.8
million)
o Working Capital Facility: $13.7 million (30 June 2023 $9.1 million)
- Net debt at 30 June 2024 of $46.4 million (30 June 2023: $6.5
million)
Net debt on 30 June 2024 excludes the June crude oil sale of $37.6 million,
which is classified as a receivable as of 30 June 2024 due to timing of cash
receipt (July) post-period. Cash balance post the June and Q3 2024 liftings
estimated to be approximately $40 million, reducing net debt to around zero.
Crude oil sales
- The Company sold in aggregate 900,000 bbls of crude in the
first 6 months of 2024 (H1 2023:nil)
- The average sales price realised for H1 2024 sales was
$84.3/bbl
- Crude oil entitlement stock at 30 June 2024, post June
lifting, ~568,917 bbls
Key Indicators
H1 2024 H1 2023 FY 2023
Block 3/05 & 3/05A Gross production (bopd) 22,701 18,867 20,180
Net Working Interest (WI) Production (bopd) 6,696 785(1) 3,509(1)
Sales Volume (bbls) 900,000 - 300,000
Average sale price ($/bbl) 84.3 - 88.0
Revenue ($ million) 75.7 - 26.4
Cash and Cash equivalents ($ million) 13.8(2) 15.7(3) 19.6(3)
Debt ($ million) (60.2) (21.9) (31.7)
Net Debt ($ million) (46.4)(2) (6.5) (12.3)
Crude Oil Entitlement Stock (bbls) 568,917 245,304 301,416
(1) H1 2023 represents 4% WI for Block 3/05 and 5.33% WI for Block 3/05A. FY
2023 represents 18% WI for Block 3/05 and 5.33% WI for Block 3/05A.
(2) Cash received for the June lifting of $37.6m whilst recognised in Pre-tax
revenue, is not recognised in 30 June cash resources or net debt due to timing
of cash receipt (July) post-period.
(3) Includes restricted funds of $8.0 million (H1 2023) and $4.9 million (FY
2023).
Operational Summary
- Gross average combined production for the period to the end of
June 2024 for both Block 3/05 and 3/05A was 22,701 bopd (Net: B3/05
6,416 bopd; B3/05A 280 bopd).
- Field Operations progressed in H1 2024:
o 15 light well interventions (LWI) were completed delivering an overall
2,500 bopd increase to field production, a further campaign of up to 20 LWIs
commenced at the end of June.
o Upgrade works on the power systems are ongoing to deliver water injection
rates on a consistent basis.
o Planning for future workovers, ESP installations and selection of drilling
candidate continues.
Post Period-End
- The Company sold a further 780,000 bbls of crude oil in August
2024 at a sales price of $83.7/bbl resulting in pre-tax revenue of $65.3
million.
- Crude oil entitlement stock at 31 August 2024, post August
lifting of approximately 125,000 bbls.
- Cash balance post Q3 2024 lifting estimated to be approximately
$40 million, reducing net debt to around zero.
- The Company expects to sell its next cargo of crude
(~550,000bbls) in late Q4 2024 / early Q1 2025.
- The planned three-week shutdown on Block 3/05 facilities will
start on 13 September. The shutdown is to conduct maintenance work across all
platforms and infrastructure to enable improved field performance.
Angolan Acquisition
The period saw the successful completion of a 12% non-operating interest in
Block 3/05 and a 16% non-operating interest in Block 3/05A offshore Angola
from Azule Energy Angola Production B.V. (Azule) for a net consideration of
$28.4 million offset by the inherited crude oil stock of 480,000 barrels. This
third acquisition increased Afentra's interest in Block 3/05 to 30% and in
Block 3/05A to 21.33%.
Kwanza Onshore Licenses
Afentra made its entry into the Kwanza onshore basin with the signing of a 45%
non-operated interest in the Production Sharing Contract (PSC) for KON 19. The
PSC for KON 15 has been initialled and license award is expected Q4 2024. The
full work program for both licenses is being finalised with the respective
partnerships, however the basin wide enhanced Full Tensor Gravity Gradient
(eFTG) survey to map the geology commenced in August 2024 with early data
being available in Q4 2024.
Paul McDade, Chief Executive Officer, Afentra plc commented:
"We are pleased with the progress made during the first half of 2024, which
marks a pivotal period for Afentra as we transition into a producing company.
The successful completion of our acquisitions in Angola has provided the
financial foundation for the company, with our strong balance sheet reflecting
not only the robust cash-generating capacity of these assets but also our
commitment to disciplined and strategic value driven deal-making. We continue
to build out our position in Angola with the entry into the Kwanza onshore
basin which we consider to be a further organic value opportunity.
Our team's dedication and the strong relationships with our partners and ANPG
have been instrumental in achieving these milestones, and we remain committed
to driving further value for our shareholders. As we look ahead, we will
continue to focus on optimising our current assets while exploring new
opportunities that align with our strategy of responsible and sustainable
growth in Africa."
For further information contact:
Afentra plc +44 (0)20 7405 4133
Paul McDade, CEO
Anastasia Deulina, CFO
Burson Buchanan (Financial PR) +44 (0)20 7466 5000
Ben Romney
Barry Archer
George Pope
Peel Hunt LLP (Nominated Advisor and Joint Broker) +44 (0)20 7418 8900
Richard Crichton
David McKeown
Emily Bhasin
Tennyson Securities (Joint Broker) +44 (0)20 7186 9033
Peter Krens
About Afentra
Afentra plc (AIM:AET) is an upstream oil and gas company focused on
opportunities in Africa. The Company's purpose is to support a responsible
energy transition in Africa by establishing itself as a credible partner for
divesting IOCs and Host Governments. Offshore Angola Afentra has a 30%
non-operated interest in the producing Block 3/05 and a 21.33% non-operated
interest in the adjacent development Block 3/05A in the Lower Congo Basin and
a 40% non-operating interest in the exploration Block 23 in the Kwanza Basin.
Onshore Angola Afentra has a 45% non-operated interest in the prospective
Block KON 19 located in the western part of the Onshore Kwanza Basin. Afentra
also has a 34% carried interest in the Odewayne Block onshore southwestern
Somaliland.
Inside Information
This announcement contains inside information for the purposes of article 7 of
Regulation 2014/596/EU (which forms part of domestic UK law pursuant to the
European Union (Withdrawal) Act 2018) and as subsequently amended by the
Financial Services Act 2021 ('UK MAR'). Upon publication of this announcement,
this inside information (as defined in UK MAR) is now considered to be in the
public domain. For the purposes of UK MAR, the person responsible for
arranging for the release of this announcement on behalf of Afentra is Paul
McDade, Chief Executive Officer.
CEO Statement
The year to date has been an active period for Afentra as we have adopted a
more operational focus given the completion of the Sonangol transaction in
December 2023 and the subsequent completion in May of Afentra's acquisition of
Azule's interest in Blocks 3/05 and 3/05A, which took our interest in these
two quality blocks to 30% and 21.33% respectively.
The completion of the final transaction in the period was a watershed moment
for Afentra following several years of diligent work to deliver these highly
value accretive acquisitions. It also enabled the Company to establish a
strong foothold in a core target market in Angola that is rich in
opportunity. The completion of the Azule transaction presented the
appropriate platform for us to highlight to the market our value driven
approach, as we provided a detailed presentation in June that set out the
organic growth opportunities across the portfolio that we have assembled for
an effective outlay of less than $10m, when factoring in the asset cash flow
adjustments and stock entitlement at completion of these three acquisitions.
The Company sold an aggregate 900,000 bbls of crude in the period across two
liftings in February and June, with an average sales price realised of
$84.3/bbl, inclusive of the Brent premium differential. Post-Period, in
August 2024, the Company sold a further 780,000 bbls of crude oil for pre-tax
revenue of $65.3 million, whilst still holding a crude oil entitlement stock
at 31 August 2024 of ~125,000 bbls. The Company expects to sell its next cargo
of crude of ~550,000bbls (stock entitlement plus net accrued production) in
late Q4 2024 or early Q1 2025 and has placed hedges to protect the downside in
line with the Company's commitment to sound financial and risk management.
Through the period, we have made strong operational progress with our JV
partners on Block 3/05 with the field responding well to the ongoing work
programme consisting of two LWI campaigns of up to 35 wells, upgrades to the
power systems to support on-going improvements to the water injection system
and a comprehensive facility reliability project. Gross combined Block 3/05
and 3/05A production averaged 22,701 bopd (Net: B3/05 6,416 bopd; B3/05A 280
bopd) for the period to the end of June 2024. As set out in the market
presentation in June, the Blocks 3/05 and 3/05A present significant organic
growth opportunities for Afentra given the material resource base and upside
potential. The planned investment programme will be achieved through a phased
approach to control capital requirements, Afentra management believes there is
potential to deliver a step-change in production to in excess of 30,000 bopd
gross - underlying the strategic and technical rationale for targeting Block
3/05 and 3/05A as the initial assets from which to drive Afentra's longer-term
growth ambitions.
As referenced previously, the Angolan market continues to evolve positively in
terms of a progressive fiscal environment that encourages investment and
recognises the important role of technically proficient independents such as
Afentra. Following initial entry into the country, we have progressed
further opportunities, and in January Afentra submitted proposals for Blocks
KON 15 (1,000 km(2)) and KON 19 (900 km(2)) located in the Onshore Kwanza
Basin as a non-operating partner. We are pleased to confirm that we have
signed the KON 19 license and expect to sign the KON 15 license in Q4 2024.
The rapid progress being made on this new area of strategic focus for Afentra
demonstrates the benefit of the strong relations and reputation that Afentra
has established in Angola. We look forward to providing the market with
further updates through the remainder of the year on our strategy to
capitalise on the long-term onshore Angola potential.
In summary, it has been a positive period for Afentra as the Company realises
the benefits of the highly value accretive transactions progressed to
completion through the prior years. The Company's strategic focus on value
driven growth remains unabated as we balance our exciting organic growth story
in Angola with a continued value-driven strategy in Angola and other core
target markets.
Operations Summary
Block 3/05 (30%)
Strong operational progress has been made on Block 3/05 in H1 2024 and with
the fields responding well to the ongoing work programme designed to both
improve the reliability of the facilities and optimise production. Gross
average Block 3/05 production of 22,701 bopd (Net 6,416 bopd) for the period
to the end of June 2024 was within expectations. During the period, 15 LWI's
were completed delivering an overall 2,500 bopd increase in production, and a
further campaign of up to 20 LWI's commenced at the end of June. In parallel
an upgrade program to the water injection systems is ongoing with works to the
power systems in order to maintain higher water injection rates on a
consistent basis, the aim is to sustain and improve upon the peak injection
rate of circa 60,000 bwipd achieved in April. The water injection and power
systems will be two of the focus areas for the comprehensive shutdown that
will commence on 13 September alongside installation of new gas flare meters
to enable an accurate baseline emissions profile.
Blocks 3/05 presents significant organic growth opportunities for Afentra
given the material resource base and upside potential. The partnership
continue to work on its plans for workovers and ESP installations in late 2025
as well as the selection of potential drilling candidates for future years.
The Block 3/05 assets have substantial potential to replace reserves, increase
production and reduce the emissions profile by optimising operational wells
and infrastructure, completing workover activity as well as drilling infill
wells.
Block 3/05A (21.33%)
Production has continued at the Gazela field and through June 2024 was 1,313
bopd (Net 280 bopd). This extended test continues to help to define the
long-term resource potential and appropriate development strategy. Potential
future activities may include further development wells and infrastructure
enhancements to develop these significant discoveries. We are currently
evaluating various strategies to optimise these future field developments and
manage associated gas.
H1 2024 production from Blocks 3/05 and 3/05
Production
Gross Net
Block 3/05 21,388 6,416
Block 3/05A 1,313 280
Total 22,701 6,696
Onshore Kwanza Basin
In January, Afentra submitted proposals for a Blocks KON 15 (1,000 km(2)) and
KON 19 (900 km(2)) located in the Onshore Kwanza Basin as a non-operating
partner. We were pleased to sign the first of these licenses, KON 19 in July
with Afentra being assigned a 45% non-operated interest alongside two local
Angolan companies ACREP and Enagol. We have initialled the KON 15 license,
where we have also been assigned a 45% non-operating interest alongside
Sonangol, we expect this license to be awarded in Q4 2024. Our technical
assessment of the Kwanza basin is highly compelling and we consider it
presents a low-cost entry with significant upside potential given the historic
evidence of a working petroleum system and the proximity of KON 15 and KON 19
to legacy oil fields. As the first phase of an integrated work program Afentra
has taken part in an eFTG survey covering the entire onshore basin which
commenced acquisition in August with early results available from Q4 2024.
Block 23 (40%):
Block 23 is a 5,000 km2 exploration and appraisal block located in the
offshore Kwanza Basin in water depths from 600 to 1,600 meters and has a
working petroleum system. Whilst this large block is covered by modern 3D and
2D seismic data sets, with no outstanding work commitments remaining, the
majority of the block remains under-explored. The block contains the Azul oil
discovery, the first deepwater pre-salt discovery in the Kwanza basin. This
discovery made in carbonate reservoirs has oil in place of approx. 150 mmbbls
and tested at flow rates of approx. 3,000 - 4,000 bbl/d of light oil. During
the period Total announced its final investment decision on the 80,000 bopd
Kaminho project in Blocks 20 and 21 just to the north of Block 23.
Afentra holds a 40% non-operated interest, while Sonangol holds the remaining
60% equity in Block 23.
Somaliland
Somaliland offers one of the last opportunities to target an undrilled onshore
rift basin in Africa. The Odewayne block covers 22,840 km2, and with access to
Berbera deepwater port less than a 100km to the north, it is ideally located
to commercialise any discovered hydrocarbons.
Odewayne Block (34%)
In H1 the operator progressed with further geological and geophysical studies,
planning a stratigraphic borehole as well as an eFTG feasibility and planning
study.
The Company's 34% working interest in the PSA is fully carried by Genel Energy
Somaliland Limited for its share of the costs of all exploration activities
during the Third and Fourth Periods of the PSA.
Financial Review
The first half of 2024 continued to reflect the momentum built during 2023
with the completion of our third asset transaction (Azule) in May. This
momentum is reflected in our financial results for the first half of 2024 with
an adjusted EBITDAX of $40.8m, circa 3.5 times higher than our year end 2023
comparator, clearly demonstrating the cash generative nature of the assets.
The cash and cash equivalents reported at $13.8m, does not include the
proceeds received post period (in July) from our June oil sale, which when
adjusted would give a cash and cash equivalents balance in excess of $50m.
Post period, in August, we have sold our third cargo of crude oil of
780,000bbls at a sales price of $83.7/bbl resulting in pre-tax revenue of
$65.3m. With the proceeds from this sale and after making the requisite
principal and interest payments on the RBL facility, and after satisfying the
projected cash calls to the end of September we estimate our cash balance to
be ~$40m, completely netting off our debt balance.
On price protection, we will be looking to build out the oil hedge program we
have successfully put in place for our February, June and August liftings. In
respect of our projected Q4 2024 lifting we have placed a combination of puts
(230,000 bbls at $70/bbl floor) and zero cost collars (170,000 bbls, $70/bbl
floor / $90.40/bbl ceiling). We are currently planning further hedges for
2025/26 which will be put in place in due course in line with our Group
hedging policy.
Our debt financing continues to be managed successfully following the
initiation of the RBL in May 2023 (5-year tenor) on the acquisition of the INA
assets in Angola in Blocks 3/05 and 3/05A. Since then, further drawdowns on
the facility have been made to support two further acquisitions in Angola on
the same Blocks purchasing assets from Sonangol (Dec 2023) and Azule (May
2024). Post a Q3 2024 RBL repayment, we anticipate the total drawdown to
reduce to ~ $40m. Our debt arrangement also consists of a $30m revolving
working capital facility (5-year tenor effective from May 2023) that has also
been successfully utilised, and which was paid down to zero in the post period
(July).
In respect of Asset operations we continue to provide support to the operator
in a number of finance and commercially related matters, and regarding
M&A, we remain committed to and are pursuing additional value accretive
opportunities both in Angola and the wider West Africa Region.
Selected financial data
H1 2024 H1 2023 FY 2023
Cash and cash equivalents ($m) 13.8 7.7 14.7
Restricted Funds - 8.0 4.9
Adjusted EBITDAX(1) ($m) 40.8 (0.8) 11.1
Profit/(loss) after tax ($m) 22.2 (3.9) (2.7)
Debt facilities:
Reserve Based Lending Facility ($m) 46.2 12.8 31.7
Working Capital Facility ($m) 13.9 9.1 -
Share price (at period end) (GBP pence) 52.2 24.5 37.0
(1)Adjusted EBITDAX is calculated
as earnings before interest, taxation, depreciation, total depletion and
amortisation, impairment, pre-licence expenditure, provisions and
non-cash share-based payments. Total depletion is the depletion charged to
profit and loss and absorbed in inventory.
Revenue
Currently, all of the Group's production is from Block 3/05 and Block 3/05A
with net production in the period averaging c.a. 6,696 bopd (H1 2023: 785
bopd). No revenue was recognised in H1 2023, versus two liftings recognised in
H1 2024, in February and June ($75.7m).
Profit from operations
The profit from operations for H1 2024 was $34.1 million (H1 2023: loss
$3.4 million), with the switch to profitability being driven by the impact of
two liftings in the reporting period, in February and June. Also, during the
period, net administrative expenditure increased to $7.6 million (H1 2023:
$3.4 million) predominantly because of costs associated with cash settled
employee share-based plans ($3.1m) and increased headcount and costs relating
to the Angolan Acquisitions and its associated workstreams. Costs associated
with new business (Pre-license costs) for H1 2024 were $1.2 million (H1 2022:
$2.2 million).
Adjusted EBITDAX and Profit after Tax
EBITDAX Totaled a profit of $40.8 million (H1 2023: loss $0.8 million)
and the Profit after Tax totalled $22.2 million (H1 2023: loss $3.9 million),
driven by the impact of the Revenues generated in the period.
EBITDAX (Adjusted) H1 2024 $M H1 2023 $M FY 2023 $M
Profit after Tax 22.2 (3.9) (2.7)
Add back:
Net Finance costs 7.4 0.4 3.3
Depletion and depreciation 5.7 0.5 2.9
Pre-licence costs 1.2 2.2 4.8
Non cash share Based Payment charge 0.2 - 1.0
Non cash share Based Payment credit (0.4) - -
Taxation 4.5 - 1.8
Total EBITDAX (Adjusted) 40.8 (0.8) 11.1
Basic EPS 9.9 cents (1.8) cents (1.2) cents
Diluted EPS 9.4 cents (1.8) cents (1.2) cents
No dividend is proposed to be paid for the six months to 30 June 2024 (30 June
2023: nil).
Cash flow
Cash and cash equivalents at the end of the period totalled $13.8m (H1 2023:
$7.7m) and comprised of the following components:
· Net cash inflow from operating activities (pre-working capital
movements) totalled $39.7 million (H1 2023: outflow $2.9 million), due to the
impact of oil revenues generated during the period.
· Net cash inflow from operating activities (post working capital
movements) totalled $12.2million (H1 2023: outflow $5.8 million), reflecting
the cash received from oil revenues, as well as an increase in payables,
during the period, offset by the receivable relating to the June oil sale
($37.6m).
· Net cash used in investing activities totalled $36.9 million (H1
2023: $25.1 million) primally due to the acquisitions on Block 3/05 and Block
3/05A, offset by a reduction in the restricted funds (payable on closing of
the Azule transaction, detailed in Note 10).
· Net cash generated in financing activities totalled $23.8 million
(H1 2023: $18.3 million) primally as a result of the drawdowns on debt
facilities of $35.7 million offset by repayment of debt principle of $8.4m,
interest of $3.5m.
Statement of financial position
As of 30 June 2024, the Statement of Financial position comprised of the
following balances:
· Non-current assets were $269.2 million (30 June 2023: $62.6
million), the increase relating to the acquisition of further interests in
Block 3/05 and Block 3/05A.
· Current assets stood at $76.0 million (30 June 2023: $34.5
million) including; oil inventories of $15.7 million (30 June 2023: $9.7
million), cash and cash equivalents of $13.8 million (30 June 2023: $7.7
million), restricted funds of $ nil (30 June 2023: $8.0 million) and trade and
other receivables of $46.4 million (30 June 2023: $9.0 million). The increase
in trade and other receivables related primarily to the cargo of 450,000
barrels that was lifted in June with cash received in July.
· Current liabilities were $97.0 million (30 June 2023: $23.5
million) including borrowings of $25.7 million (30 June 2023: $11.5 million),
contingent consideration of $16.3 million (30 June 2023: $1.4 million) and
trade and other payables of $55.0 million (30 June 2023: $10.6 million). The
increase in trade and other payables relates to Joint Venture working capital
items (Block 3/05 and Block 3/05A).
· Non-current liabilities were $178.1 million (30 June 2023:
$27.6million) including borrowings of $34.5 million (30 June 2023: $10.5
million), contingent consideration of $12.7 million (30 June 2023: $4.2
million) and provisions of $130.9 million (30 June 2023: $12.8 million).
· Group net assets of 30 June 2024 were $70.1 million (30 June 2023
were $45.9 million), The increase in Group net assets is driven entirely by
the impact on the balance sheet of the addition of acquired assets from both
Sonangol and Azule on B3/05 & 3/05A compared to acquired assets from INA
in in H1 2023.
Going Concern
The Group's business activities, together with the factors likely to affect
its future development, performance and position is set out above (pages 1
and 2) and within the CEO Statement, Operations Summary and Financial
Review. The financial position of the Group is described in the Financial
Review.
The Group has sufficient cash resources for its working capital needs and its
committed capital expenditure programme at least for the next 12 months.
Consequently, the Directors believe that the Group is well placed to manage
its business risks successfully.
The Group has adequate cash resources based on existing cash on balance
sheet, proceeds from future oil sales, a conventional RBL arrangement, and a
revolving working capital facility, in place with Trafigura and Mauritius
Commercial Bank to meet its liabilities as they fall due for a period of at
least 12 months notwithstanding the situation in Ukraine and the Middle East,
and the potential impact on commodity prices and exchange rates.
The Board has also looked at downside scenarios including a production
shortfall and lower than anticipated oil prices. The impact of the downside
scenarios can be mitigated by the implementation of hedges for 70% of the
remaining 2024 cargos. Further scenarios associated with additional
acquisitions (KON15 and KON19) have also been reviewed and the Board believe
that liquidity is sufficient to pursue these opportunities and cover all
financial covenants. The Board also notes the implementation of the hedging
policy and is confident in the utilisation of commodity-based derivatives to
manage downside risk. Thus the Board believes it's appropriate to continue to
adopt the going concern basis of accounting in preparation of the financial
statements.
Disclaimer
This document contains certain forward-looking statements that are subject to
the usual risk factors and uncertainties associated with the oil and gas
exploration and production business. Whilst the Group believes the expectation
reflected herein to be reasonable in light of the information available to it
at this time, the actual outcome may be materially different owing to factors
either beyond the Group's control or otherwise within the Group's control but
where, for example, the Group decides on a change of plan or strategy.
Accordingly, no reliance may be placed on the figures contained in such
forward-looking statements.
Glossary
$ US Dollars
2D two dimensional
3D three dimensional
Adjusted EBITDAX earnings before interest, taxation, depreciation, total depletion and
amortisation, impairment, pre- licence expenditure, provisions and share based
payments
AIM Alternative Investment Market of the London Stock Exchange
ANPG Agência Nacional de Petróleo, Gás e Biocombustíveis (holder of the mining
rights of Exploration, Development and Production of liquid and gaseous
hydrocarbons in Angola)
Azule an incorporated Joint Venture between Eni and bp
Block 3/05 the contract area described in and covered by the Block 3/05 PSA
Block 3/05A the contract area described in the Block 3/05A PSA
Block 23 the contract area described in and covered by the Block 23 PSA
bbl/d barrels of oil per day ('k-' / 'mm-' for thousand / million)
bopd barrels of oil per day
CPR Competent Persons Report
CSI China Sonangol International
eFTG enhanced Full Tensor Gravity Gradiometry
ERCe Independent and qualified Reserves and Resources evaluator (CPR)
Group Afentra plc, together with its subsidiary undertakings (the 'Group')
INA Industrija Nafte, d.d
IOCs international oil company
JV joint venture
Km kilometre
km(2) square kilometre
Mmbo million Barrels of Oil
Petrosoma Petrosoma Limited (JV partner in Somaliland)
PSA production sharing agreement
RBL Reserve-Based Lending
Reserves reserves are those quantities of petroleum anticipated to be commercially
recoverable by application of development projects to known accumulations from
a given date forward under defined conditions. Reserves must satisfy four
criteria; they must be discovered, recoverable, commercial and remaining based
on the development projects applied. Reserves are further categorised in
accordance with the level of certainty associated with the estimates and may
be sub-classified based on project maturity and/or characterised by
development and production status
RTO reverse takeover (pursuant to Rule 14 of the AIM Rules)
Seismic Geophysical investigation method that uses seismic energy to interpret the
geometry of rocks in the subsurface
SOFR Secured Overnight Financing Rate
SPA Sale and Purchase Agreements
Sonangol Sonangol Pesquisa e Produção S.A.
Trafigura Trafigura PTE
WI working interest
Condensed consolidated income statement for the six months to 30 June 2024
Six months to Six months to Year ended
Note 30 June 2024 30 June 2023 31 December 2023
$000 $000 $000
Revenue 75,667 - 26,390
Cost of sales (33,894) - (12,571)
Gross profit 41,773 - 13,819
Other administrative expenses 3 (6,442) (1,278) (6,647)
Pre-licence costs (1,203) (2,155) (4,810)
Total administrative expenses (7,645) (3,433) (11,457)
Profit/(loss) from operations 34,128 (3,433) 2,362
Finance income 4 - 135 240
Finance expense 4 (7,405) (575) (3,508)
Profit/(loss) before tax 26,723 (3,873) (906)
Tax (4,514) - (1,799)
Profit/(loss) for the period attributable to the owners of the parent 22,209 (3,873) (2,705)
Other comprehensive income/(expense) - items to be reclassified to the income
statement in
subsequent periods
Currency translation adjustments 4 (9) (96)
Total other comprehensive income/(expense) for the period 4 (9) (96)
Total comprehensive income /(expense) for the year attributable to the owners
of
the parent 22,213 (3,882) (2,801)
Basic earnings/(loss) per share (US cents) 5 9.9 (1.8) (1.2)
Diluted earnings/(loss) per share (US cents) 5 9.4 (1.8) (1.2)
Condensed consolidated statement of financial position as at 30 June 2024
As at As at As at
Note 30 June 2024 30 June 2023 31 December 2023
$000 $000 $000
Non-current assets
Intangible exploration and evaluation assets 6 21,919 21,346 21,867
Property, plant and equipment 7 116,363 28,531 75,131
Other non-current assets 8 130,882 12,718 76,973
269,164 62,595 173,971
Current assets
Inventories 15,697 9,735 13,441
Trade and other receivables 46,443 9,008 3,640
Cash and cash equivalents 13,818 7,725 14,729
Restricted Funds - 8,000 4,850
75,958 34,468 36,660
Total assets 345,122 97,063 210,631
Equity
Share capital 28,907 28,143 28,143
Currency translation reserve (294) (211) (298)
Share option reserve 87 - 965
Retained earnings 41,371 17,994 19,162
Total equity 70,071 45,926 47,972
Current liabilities
Borrowings 9 25,669 11,465 6,752
Trade and other payables 54,941 10,579 27,307
Contingent consideration 10 16,307 1,378 4,621
Lease liability 47 114 155
96,964 23,536 38,835
Non-current liabilities
Borrowings 9 34,516 10,473 24,951
Contingent consideration 10 12,652 4,228 21,863
Provisions 11 130,919 12,754 77,010
Lease liability - 146 -
178,087 27,601 123,824
Total liabilities 275,051 51,137 162,659
Total equity and liabilities 345,122 97,063 210,631
Condensed consolidated statement of changes in equity for the six months ended
30 June 2024
Currency Share
Share translation option Retained
capital reserve reserve earnings Total
$000 $000 $000 $000 $000
At 1 January 2023 28,143 (202) - 21,867 49,808
Loss for the period - - - (3,873) (3,873)
Currency translation adjustments - (9) - - (9)
Total comprehensive expense for the period attributable to the owners of the - (9) - (3,873) (3,882)
parent
At 30 June 2023 28,143 (211) - 17,994 45,926
Profit for the period - - - 1,168 1,168
Currency translation adjustments - (87) - - (87)
Total comprehensive income for the period attributable to the owners of the - (87) - 1,168 1,081
parent
Share option charge for the period - - 965 - 965
At 31 December 2023 28,143 (298) 965 19,162 47,972
Profit for the period - - - 22,209 22,209
Currency translation adjustments - 4 - - 4
Total comprehensive income for the period attributable to the owners of the - 4 - 22,209 22,213
parent
Issue of ordinary share capital 764 - (764) - -
Transferred cash settled share option charge to liability - - (351) - (351)
Share option charge for the period - - 237 - 237
At 30 June 2024 28,907 (294) 87 41,371 70,071
Condensed consolidated statement of cash flows for the six months ended 30
June 2024
Note Six months to Six months to Year ended
30 June 2024 30 June 2023 31 December 2023
Operating activities: $000 $000 $000
Profit/(loss) before tax 26,723 (3,873) (906)
Depreciation, depletion & amortisation 7 5,683 491 2,880
Share-based payment charge 237 - 965
Share-based payment credit - cash settlement (351) - -
Finance income and gains - (135) (240)
Finance expense and losses 4 7,405 575 3,508
Operating cash flow prior to working capital movements 39,697 (2,942) 6,207
Decrease/(increase) in inventories (from acquisition date) 9,209 (1,690) 4,789
(Increase)/decrease in trade and other receivables (from acquisition date) (42,803) 175 5,809
Increase/(decrease) in trade and other payables (from acquisition date) 8,395 (1,371) (2,688)
Increase in provisions - 2 3
Cash flow generated from/(used in) operating activities 14,498 (5,826) 14,120
Petroleum income tax paid (2,301) - (1,799)
Net cash flow generated from/(used in) operating activities 12,197 (5,826) 12,321
Investing activities
Corporate acquisitions 12 (28,428) (26,995) (48,126)
Interest received 4 - 135 240
Purchase of property, plant and equipment 7 (8,627) (457) (3,316)
Exploration and evaluation costs 6 (52) (22) (43)
Cash inflow from restricted funds 4,850 2,200 5,350
Contingent consideration paid 10 (4,622) - -
Net cash used in investing activities (36,879) (25,139) (45,895)
Financing activities
Drawdown on loan facilities net of transaction costs 9 35,749 19,000 45,066
Principal repayments on loan facilities 9 (8,364) - (14,367)
Interest paid 4 (3,506) (531) (2,504)
Principal and interest paid on lease liability (112) (127) (245)
Net cash generated from financing activities 23,767 18,342 27,950
Net decrease in cash and cash equivalents (915) (12,623) (5,624)
Cash and cash equivalents at beginning of year 14,729 20,384 20,384
Effect of foreign exchange rate changes 4 (36) (31)
Cash and cash equivalents at end of year 13,818 7,725 14,729
Notes to the consolidated results for the six months ended 30 June 2023
1. Basis of preparation
The financial information contained in this announcement does not constitute
statutory financial statements within the meaning of Section 435 of the
Companies Act 2006.
The financial information for the six months ended 30 June 2024 is unaudited.
In the opinion of the Directors, the financial information for this period
fairly represents the financial position of the Group. Results of operations
and cash flows for the period are in compliance with UK adopted International
Accountings Standards.
The accounting policies, estimates and judgements applied are consistent with
those disclosed in the annual financial statements for the year ended 31
December 2023, and are also consistent with additional policies, estimates and
judgements as noted below.
Critical Accounting Judgements and Estimates
In the application of the Group's accounting policies, the Directors are
required to make judgements, estimates and assumptions about the carrying
value of assets and liabilities that are not readily available from other
sources. The estimates and associated assumptions are based on historical
experience and other factors that are relevant. Actual results may differ from
these estimates.
Business Combinations and Asset Acquisitions
The Group has acquired an additional working interest in the producing oil
blocks Block 3/05 and 3/05A in Angola during the period (note 10). It was the
judgement of the Directors that this further acquisition should be accounted
for as an asset acquisition, consistent with the judgement in respect of the
initial acquisition transactions in 2023 for the same assets. The Group
assessed joint control, as determined under IFRS11, does not exist among the
contractor partners to the arrangement because there are several combinations
of partners who can combine to meet the passmark vote for strategic and
financial decisions.
Consistent with how the 2023 acquisitions were treated, management have
determined that the acquisition will be accounted for as an asset acquisition
under IFRS 3 and requires an allocation of the consideration across the
identified assets and liabilities based on their relative fair values.
These financial statements should be read in conjunction with the annual
financial statements for the year ended 31 December 2023. All financial
information is presented in USD, unless otherwise disclosed.
An unqualified audit opinion was expressed for the year ended 31 December
2023, as delivered to the Registrar. The Directors of the Company approved the
financial information included in the results on 11th September 2024.
2. Results & dividends
The Group has retained earnings at the end of the period of $41.4 million (30
June 2023: $18.0 million retained earnings) to be carried forward. The
Directors do not recommend the payment of a dividend (H1 2023: nil).
3. Exceptional items
The following exceptional items are included within Other administrative
expenses:
Six months to Six months to Year ended
30 June 2024 30 June 2023 31 December 2023
$000 $000 $000
Cash settled share based payment including employer NIC 3,138 - -
RTO process costs - 228 1,580
During the period certain Group employees exercised share options over shares
in Afentra plc. This exercise of options resulted in a tax liability for the
recipients, which the Group is obliged to withhold and pay to the UK tax
authority. The Group elected to settle this tax liability in cash, and issued
only net, post-tax, shares to the recipients. This payment of the recipients'
tax liability from existing cash resources, rather than from the proceeds of
issuing further shares up to the gross share entitlement to cover the tax, is
a cash settlement of a share based payment obligation. Additionally, the Group
incurred employers national insurance tax on the market value of the
recipients' gross entitlement to shares.
4. Finance income and finance expense
Six months to Six months to Year ended
30 June 2024 30 June 2023 31 December 2023
$000 $000 $000
Finance income:
Interest on short-term deposits - 135 240
- 135 240
Finance expense:
Interest on borrowings 2,716 398 1,764
Finance and arrangement fees 447 98 392
Offtaker fees 2,591 - 776
Finance charges on hedge instrument - - 473
Other interest expense - 32 31
Bank charges 5 4 14
Interest accretion on contingent consideration 1,036 - -
Interest accretion on lease 4 12 18
Fair value adjustment on contingent consideration 624 - -
Exchange differences (18) 31 40
7,405 575 3,508
5. Earnings/(loss) per share (basic and diluted)
Six months to Six months to Year ended
30 June 2024 30 June 2023 31 December 2023
Profit/(loss) for the year ($000) 22,209 (3,873) (2,705)
Weighted average number of ordinary shares in issue during the year (number of 223,473,586 220,053,520 220,053,520
shares)
Basic EPS (US cents) 9.9 (1.8) (1.2)
Total possible dilutive effect of share awards outstanding 12,011,237 - 23,023,546
Fully diluted average number of ordinary shares during the year 235,484,823 220,053,520 243,077,065
Diluted EPS (US cents) 9.4 (1.8) (1.2)
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of shares outstanding
during the period. Diluted earnings per share is calculated using the weighted
average number of shares adjusted to assume the conversion of all dilutive
potential ordinary shares. Share options and awards are not included in the
dilutive calculation for loss making periods because they are anti-dilutive.
The dilutive effect of share awards outstanding is the total possible award
number and does not take into account vesting conditions potentially not met,
or the Group's expectation that these awards will be settled net of tax, that
will reduce the impact of the dilutive effect of the awards.
6. Intangible exploration and evaluation (E&E)
assets
Total
$000
Net book value at 1 January 2023 21,324
Additions during the period 22
Net book value at 30 June 2023 21,346
Acquisitions during the period 500
Additions during the period 21
Net book value at 31 December 2023 21,867
Additions during the period 52
Net book value at 30 June 2024 21,919
Group intangible assets at the year end 2023:
· Block 23 PSA, Angola: Afentra Angola Ltd 40%, and Sonangol 60%
(Operator).
· Odewayne PSA, Somaliland: Afentra (East Africa) Limited 34%,
Genel Energy Somaliland Limited 50% (Operator) and Petrosoma 16%.
7. Property, plant and equipment
Oil and gas assets Office Lease Computer and office equipment Total
$000 $000 $000 $000
Cost
At 1 January 2023 - 1,143 349 1,492
Modification during the period - 22 9 31
Acquisitions during the period 27,992 - - 27,992
Additions during the period 453 - 4 457
At 30 June 2023 28,445 1,165 362 29,972
Modification during the period - - - -
Acquisitions during the period 43,364 - - 43,364
Additions during the period 5,613 - 14 5,627
Disposals during the period - - (5) (5)
At 31 December 2023 77,422 1,165 371 78,958
Modification during the period - - - -
Acquisitions during the period 38,288 - - 38,288
Additions during the period 8,618 - 9 8,627
At 30 June 2024 124,328 1,165 380 125,873
Accumulated depreciation and impairment
At 1 January 2023 - (785) (167) (952)
Charge for the period (354) (91) (44) (489)
At 30 June 2023 (354) (876) (211) (1,441)
Charge for the period (2,246) (99) (46) (2,391)
Disposals during the period - - 5 5
At 31 December 2023 (2,600) (975) (252) (3,827)
Charge for the period (5,541) (96) (46) (5,683)
At 30 June 2024 (8,141) (1,071) (298) (9,510)
Net book value at 30 June 2024 116,187 94 82 116,363
Net book value at 31 December 2023 74,822 190 119 75,131
Net book value at 30 June 2023 28,091 289 151 28,531
Net book value at 1 January 2023 - 358 182 540
Block 3/05 PSA, Angola: Afentra Angola Ltd 30%, Sonangol (Operator) 36%,
M&P 20%, Etu Energias 10% and NIS- Naftagas 4%.
Block 3/05A PSA, Angola: Afentra Angola Ltd 21.33%, Sonangol (Operator)
33.33%, M&P 26.68%, Etu Energias 13.33% and NIS-Naftagas 5.33%.
The right of use asset (office lease) is depreciated on a straight-line basis
over the lifetime of the lease contract. The current lease term is for 8
years, ending in 2024.
8. Other non-current assets
The Group have reviewed the accounting treatment for the decommissioning fund
held by the Block 3/05 Operator and have recognised a non-current asset and an
offsetting non-current liability for $130.9 million (30 June 2023: $12.7
million; 31 December 2023: $77.0 million), which equates to the present value
of the future decommissioning liability. It is management's view that the
future liability for decommissioning is represented by the totality of the
funds held by the Operator, specifically for such purposes. The non-current
asset held for decommissioning liability is limited to the lower of the
present value of the future decommissioning liability and the amount of the
funds held by the Operator.
9. Borrowings
The Group has activated elements of both the RBL Facility and Working Capital
facility in order to facilitate the completion of the INA acquisition. As of
June 30th, 2024, the Group has borrowings of $46.2 million (RBL) and $13.9
million (Working Capital) with the following key terms:
RBL Facility up to $75 million
· 5-year tenor
· 8% margin over 3-month SOFR (Secured Overnight Financing Rate)
· Semi- annual linear amortisations
· Key financial covenant of Net Debt to EBITDA < 3:1
Working Capital up to $30m revolving facility
· 5-year tenor
· 4.75% margin over1-month SOFR
· Repayable with proceeds from liftings
As at As at As at
30 June 2024 30 June 2023 31 December 2023
$000 $000 $000
Current
Reserve Based Lending Facility 11,725 2,327 6,752
Working Capital Facility 13,944 9,138 -
25,669 11,465 6,752
As at As at As at
30 June 2024 30 June 2023 31 December 2023
Non-current $000 $000 $000
Reserve Based Lending Facility 34,516 10,473 24,951
34,516 10,473 24,951
Six months to Six months to Year ended
Borrowings 30 June 2024 30 June 2023 31 December 2023
$000 $000 $000
At 1 January 31,703 - -
Loan drawdowns 35,749 21,938 48,003
Interest charge 1,912 - 1,152
Repayments (10,276) - (15,519)
Movement in unamortised debt arrangement cost 293 - (2,545)
Movement in interest accrued 804 - 612
At 31 December 60,185 21,938 31,703
A charge is placed on Afentra (Angola) Ltd shares to Mauritius Commercial Bank
Limited as required by the terms of the debt facilities.
10. Contingent consideration
Provisions include contingent consideration payable to INA, SNL and Azule on
Blocks 3/05 and 3/05A:
INA acquisition (2023):
Tranche 1: The contingent consideration for 3/05 relates to the 2023 and 2024
production levels and a realised brent price hurdle up to an annual cap of
$2.0 million;
Tranche 2: The contingent consideration for 3/05A relates to the successful
future development of the Caco Gazela and Punja development areas, with
production and oil price hurdles. The maximum payable for these development
areas is $5.0 million.
During the period the Group paid contingent consideration of $1.1 million to
INA in respect of Tranche 1.
SNL acquisition (2023):
The contingent consideration for the SNL acquisition is payable annually over
the next 10 years in each year where production exceeds 15,000 bopd, and the
realised oil price exceeds $65. The maximum annual amount payable is $3.5
million, resulting in a total maximum payment of $35 million over 10 years.
During the period the Group paid contingent consideration of $3.5 million to
Sonangol.
Azule acquisition (2024):
The contingent consideration for the Azule acquisition includes up to $21
million over 3 years subject to certain oil price and Block 3/05 production
hurdles with an annual cap of $7 million. Further contingent considerations of
up to $15 million are linked to the successful future development of certain
Block 3/05A discoveries and associated oil price and production hurdles.
During the period (as part of the completion) the Group paid contingent
consideration of $1.2 million to Azule.
Management have reviewed the contingent payments related to these
acquisitions, which are dependent upon production levels, future oil price
hurdles and future B3/05A developments. Judgement has been applied to the
probability of the circumstances occurring that would give rise to some or all
of the future payments. For each tranche of contingent consideration
Management have applied a multiple scenario approach to each tranche along
with the related weightings of probability resulting in an expected amount
payable
11. Provisions
As at As at As at
30 June 2024 30 June 2023 31 December 2023
$000 $000 $000
Non-current
Decommissioning 130,882 12,718 76,973
Other 37 36 37
130,919 12,754 77,010
The increase in the non-current decommissioning provision during the first
half of 2024 is mainly due to additional liability assumed pursuant to the
Azule transaction (note 12).
12. Acquisition
During the period the Company completed the acquisition of interests in Block
3/05 (12%) and Block 3/05A (16%) offshore Angola for a net $28.4 million
payment with a subsequent contingent payments estimated at $5.4 million.
Block 3/05 Block 3/05A Total
$000 $000 $000
Consideration
Initial consideration 47,500 1,000 48,500
Actual adjustments from effective date (15,151) (6,096) (21,247)
Contingent consideration 1,175 - 1,175
Consideration paid 33,524 (5,096) 28,428
Contingent consideration - Oil price and production linked / future 1,415 4,022 5,437
developments
Total consideration 34,939 (1,074) 33,865
Net assets
Oil and gas properties 36,051 2,237 38,288
Other non-current assets (decommissioning fund) 52,166 - 52,166
Non-current provision (decommissioning) (52,166) - (52,166)
Inventory (Oil Stock) 11,036 429 11,465
Joint Venture partner balance (4,092) 2,961 (1,131)
Joint Venture working capital (8,056) (6,701) (14,757)
Net assets acquired 34,939 (1,074) 33,865
The Group performed an assessment of the Azule acquisition to determine
whether the acquisition should be accounted for as an asset acquisition or a
business combination. Consistent with the acquisitions in 2023 from INA and
SNL, the Group established that under IFRS11, joint control does not exist,
and therefore the Group have deemed the acquisition to qualify as an
acquisition of group of assets and liabilities, not of a business.
Furthermore, the Group gave regard to guidance included under IFRS 11- Joint
Arrangements, and will account for its share of the income, expenses, assets,
and liabilities from the acquisition date.
The consideration (contingent and actual consideration paid) was allocated to
assets and liabilities based on their relative fair values.
13. Subsequent Events
Subsequent to the Balance Sheet date of June 30(th), the following business
activities occurred and are anticipated to occur:
· In July, the onshore block KON19 license was signed and a 45%
non-operated interest awarded
· In August, an eFTG airborne survey commenced over the entire
onshore Kwanza basin, with early data anticipated to be available in Q4
· In August, the onshore block KON15 was initialed and license
award is anticipated in Q4
· In August, successful cargo sale of 780,000 bbls
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR SFDFUFELSEEURecent news on Afentra
See all newsREG - Afentra PLC - Results of 2025 Annual General Meeting
AnnouncementREG - Afentra PLC - DIRECTOR / PDMR DEALINGS
AnnouncementREG - Afentra PLC - Publication of Annual Report and Notice of AGM
AnnouncementREG - Afentra PLC - Final Results
AnnouncementREG - Afentra PLC - Chair Succession and Board Changes
Announcement