Africa Oil Corp. (OTCPK:AOIFF) Third Quarter 2022 Results Conference Call November 15, 2022 9:00 AMm. ET
Participating companies
Shahin Amini – Sales & IR Manager
Keith Hill – President and Chief Executive Officer
Pascal Nicodeme – Chief Financial Officer
Conference Call Participants
Teodor Sveen Nilsen – SpareBank 1 Markets
James Hosie – Barclays
Matt Cooper – Peel Game
Operator
[The call starts abruptly] Call and webcast on third quarter 2022 oil results. All lines have been muted to avoid any background noise. After the speaker’s comments, there will be a question and answer session. [Operator Instructions]. Note that this event is logged. The recording can be played on the company’s website.
I would now like to speak with Mr. Shahin Amini, Chief Commercial and Investor Relations Officer at Africa Oil. Please continue, Mr. Amini.
Shahin Amini
[Technical difficulty] for our third quarter 2022 earnings call.
With me are our president and CEO, Keith Hill; and our CFO, Pascal Nicodeme. Keith and Pascal will provide quarter highlights and business prospects before moving on to the Q&A session.
I would like to remind everyone that comments made at this meeting are subject to forward-looking statements involving vital assumptions and threat points and have been fully described in the Company’s ongoing disclosure reports. The disputed data is made as of today and today and Africa Oil assumes no legal responsibility to update or revise such data to reflect new occasions or circumstances, unless required by law. The Company’s complete financial statements and similar Management Discussion and Analysis are located on the Company’s online page and on SEDAR.
So, Keith, we’re in a position for you. Please continue.
Keith Hill
Well, thank you, Shahin. And thank you all for logging in.
Obviously, smart neighborhood for us. I believe we met or exceeded the maximum of our monetary targets this year. We still have some catalysts left this year as well. So I think it will be an attractive year.
I think most of you have noticed this slide here, where I think we’re showing that we’ve become a full-cycle oil company, not just production and exploration, but also coins and returning coins to shareholders for the first time, which I think has been very well earned through the market.
So I think there are some highlights on the right side of this slide. We ended the quarter with a significant amount of liquidity, more than $200 million in money in the bank. A situation of high liquidity.
I also sought to highlight the carbon fairness target we set earlier. We have committed to being carbon neutral until 2025, some 25 years earlier than the industry has signed in maximum agreements. And I should point out that we had EcoVadis do a review for our largest shareholder. And we are in the top sensible 1% of companies among more than 80,000 companies.
Therefore, we are quite proud to be the highest ranked oil company in the ESG framework. And I think that’s something we’re going to continue to do. They are components of the solution, I still think you can invest in oil and fuel for the foreseeable future.
So if we move on to the next slide, let’s communicate what we did this quarter and the first nine months of the year, obviously, the finances are pretty solid, Pascal will give you a more detailed account. But, as I said, we are debt-free. When you look at the money on the balance sheet compared to our percentage of debt.
As a bonus, we actually have a net money of $42 million. And again, that’s after we made our statements to shareholders. So, again, a very hot net debt/EBITDAX ratio of 0. 3. And look right, we have begun our shareholder returns. We continued to pay the dividend, but we also introduced the 10% buyback that we discussed at our last meeting. And so far, we’ve spent $35. 7 million to buy back 15. 8 million shares. to continue this program the year.
So again, the overall shareholder returns $59. 5 million, I think it’s a testament to the amount of coins we’re generating and also our commitment to returning coins to shareholders.
Again, all of this is generated through Prime and Prime dividends. We’ve already had $250 million this year, compared to the $200 million we received in 2020 and 2021. And we expect more this year, the amount of the additional dividend this year will have the extension of our license in Nigeria, but anyway, there will be more dividends this year.
So, again, I think the barometer of this acquisition, we’ve already taken $650 million off the table after paying only $519 million. So I think it’s a wonderful acquisition for us.
We’ve also had very clever exploration successes, led through Venus. Now, Venus appears not to be the greatest discovery ever made in sub-Saharan Africa. And in its early days, we only drilled one well, yet the well we drilled had a very smart reservoir 84 meters thick, much thicker than we thought, the water-oil contact is particularly less than we thought. So it looks like it may be quite big, again, at first, but we’re preparing to drill appraisal wells there. And if that happens, it can be incredibly vital to the business.
So, again, the other thing is that we opened a new oil province with that, and with the well that drilled the shell next to it, so we also have a position in that province.
Then the next slide. And again, we’re going to get into production performance, all our guidance for this year, we’re going to be at the upper or middle end of the forecast, whether it’s direct interest production and stock output, we’ll be way above. the money and end-of-division forecasts received. So I think everything turns out to be fine at that. And we will propose steerage in the year-end forecast. To give.
The next slide. Once again, record oil sales since the acquisition of Prime. I need to spend a few minutes talking about coverage. Coverage is something that has been talked about a lot in the past, it is. . . Let me go back to what I have seen.
The selling price compared to dated Brent, in 2020 we were kind of heroes, we had covered all our production and when COVID hit and the price of oil fell to $20. 30 per barrel, we were still getting $60. 70 to $80 per barrel for our crude. So, essentially, he saved the company in 2020 by having a physically very powerful hedging program.
Since then, we’ve paid back a little bit in 2021. And then in 2022, we did our best to get to the bottom of some of those hedgerows and find a new form of coverage that necessarily allows us to take full merit. of existing higher oil costs. And I think we’ve completed that, if you look at the progression from the first quarter to the third quarter, we’re really getting to the point now in the third quarter where we’re getting that we’re doing Brent costs above the date for our crude.
And the way we do that, if you go to the next slide, is a somewhat strange but very effective hedging mechanism where we take 50% to 70% of the carpasses over the next 12 months. And we’ve sent a cause in which shipments to 80% of what Brent is negotiating. And it’s essentially a flat, it’s a 3rd floor, we don’t pay for it.
So what’s going down is what’s happening, and if we never have a significant value drop event, we’re just promoting in the spot market, which of course we did in November, we only sold two crudes, two shipments of crude. Over $100 each, triggers never hit.
But I think what it does is it gives us that challenge cover if things happen, if there’s a new wave of COVID, or some of the economic challenges with inflation as the overall global economy starts to pass. We still have this cushion that essentially helps to prevent us from going below unit thresholds. So, right now, most of our triggers are in the $70 diversity for the early part of next year. So, that shouldn’t be a big challenge for us. My purpose is that none of those triggers are affected.
I think we are still positive about oil prices. So, I think it’s a pretty attractive strategy that allows us to keep the rise but protect the fall and not have to pay for it. So, so far, it works very well.
The next slide. Again, Nigeria is actually the center of business. I think when you look at the assessments, I think most of our assessment is still done in Nigeria. These are the 3 largest deposits in Nigeria, they all work quite well. They are going to be within the forecasts, they have low operating costs, but large operators and Chevron and Total. And we see them as our money in the future, which actually underpins the price of this business in the future.
But they want investment. If you move on to the next slide, I think something we’re going to do is invest quite a bit of time and cash reinvesting in those oil fields, the most important thing we want to do is drill some progression wells in Aegina and ACPO.
Unfortunately, we had a bit of a delay in rigging. Therefore, we expect the platform to appear in December or January at the earliest. We have a platform known as through approval procedures in Nigeria. We located the drilling of nine wells in Aegina and ACPO, which will be the key to stimulate, boost production and prevent us from seeing a bit of decline, and specifically Aegina that needs progression wells to consolidate it.
We will also be drilling some exploration assessment wells, there are a number of smart targets around our FPSOs that we need to start bringing online. And, of course, pray outside the fields, it’s a position essentially in a position for punishment. When we get a license extension, we also hope to have sanctioned it quickly.
So I think it’s a wonderful asset for us. But this requires some investment. And I think in 2022, 2023 and 2024, we’re going to give money back to those fields to make sure they continue to produce at the same levels.
The next slide. So now I pass it on to Pascal and let it go through some of the financial highlights.
Paschal Nicodemus
Thank you, Keith. I think, as you said, it’s a very smart culture. We posted $70 million on a net income source this quarter, which is above the average decline since acquiring Prime.
This is also a buildup compared to the second trimester. We were in the quarter at the time, we had been impacted by a significant accumulation in the net operating position. And this quarter, we saw just the opposite. There was a low in the sales charge due to network movement in this position of around $73 million, which explains this very smart quarter.
And yes, as Keith mentioned, we still have $207 million in money funding, despite the $35 million we’ve gotten rid of since we started this buyback program.
Next slide, please. So, like I said, I mean, that functionality backed through some other smart offshore prime quarter, however, it’s at Prime $78 million this quarter, and a very strong EBITDAX of $210 million, I’ll represent a $6 trillion percentage in operating cash flow.
The value is still in a very large money balance, more than $600 million, of course. And today net to Africa Oil, Prime has paid off its net debt at around $165 million. It is Prime that continues to deleverage. And our blank shell there is shrinking.
I’m curious. So I think, as Keith mentioned, since we made the acquisition, we’ve more than paid for the care for the original care. We have earned the $650 million dividend since we made the acquisition, representing a $520 million money acquisition charge. Meanwhile, the net counterweight for us within Prime has also exceeded $85 million. Therefore, this is something to keep in mind in this acquisition. And, as mentioned, net debt has continued to decline to $450 million since we made the acquisition.
So today we’re sitting on those very giant balances of money. We have this laundry under a commercial facility in place. With full banks, we have agreed with all banks to increase the facility to $200 million as soon as we download an OML130 license in Nigeria. So this is evidence of the banks that are supporting us right now. And we expect to achieve great dividends from Prime, as soon as we have this license extension.
They will also refinance their RBL facilities at the same time. And we will be refinancing as soon as this license is granted. I think Keith, you. Thank you.
Keith Hill
So, yes, we still have a number of catalysts on the way and I look forward to reporting on them today. Unfortunately, everything in Africa is taking a little longer than we would like, especially Kenya’s oil allocation well, we expected to see this quarter, but we have made additional progress, but we hope to have the ones that are literally in an agreement in the coming weeks.
Therefore, probably the maximum will be the Venus evaluation drilling program that will be carried out next year. Again, we expected to have that here this year. But it turned out to be a lucky rig, it made a wonderful discovery and in Cyprus, so they are drilling and testing on this rig now. And as soon as they are completed, it will be successful for us in mid-February, and we will start drilling the first appraisal well on Venus.
The operator of Totality said it was looking to bring some other platform. So I think it’s possible that we’ll have two well drilling systems until the current quarter of next year. And I think, obviously, the industry interest of our partners is very wonderful for the Venus Basin and Orange region.
We take a look at a number of strategic assets that produce assets. So I think our criteria are very simple. We need to produce money flow assets, we are. We don’t need things that are going to inject a lot of money, we need things that are going to produce money.
We’re going to do some exploration, however, it will be a follow-up to the exploration we have, we don’t see ourselves doing much exploration of new frontiers there, the most common thing was to take credit from the portfolio. that we have built. AndArray if we buy things, it will concentrate on Africa and basically West African production assets.
Another big hashish like renewing your license, as Pascal mentioned, once we have that renewal, we can refinance the RBL. And PXF services lose a lot of cash so we can do things with forward-looking returns for shareholders, prospective acquisitions. So I think we’re very close to the fact that we all deserve to have something about it until the end of this month. And keep an eye on that because it’s a very important thing for us to get the license renewal.
And then we are also looking to mine our block 3B/4B, I will show you a small map where it is located. But it is at the center of this organizational trend. And we’ve had a little bit of interest from the industry about it.
The next slide. So again, exploration. While it may not be the mantra of the industry, we still see the price of the building. We need to make sure we’re doing it the right way, what we like to call exploration of benefits, we’re probably not passing through. and doing the kind of thing in the onshore drilling basin that takes 8 to 10 years to develop, what we’re seeing is in spaces that can also be mined very quickly, take advantage of barrels that are close to infrastructure or offshore, where we think we may also have accelerated a progression similar to what they did in Guyana.
Again, the 3 corporations we invest in in Africa, Energy Impact and ECO Atlantic, have a very active drilling program in South Africa and a number of very well placed maturity boxes. So I think there’s a lot of price here. I think our purpose for next year is to find a way to get that shareholder price. And I think at some point we want to consolidate that position where we don’t have those holding companies that are absorbed, sold or advanced.
The next slide. Orange Basins continues to be, I think it’s now the warmest basin on Earth. Not only like the Venus discoveries we made, but Gaff’s discovery made through Shell, Shell will also bring Regan. There will potentially be two or 3 platforms running full-time here for the foreseeable future. We drilled there and Block 2B is a slightly different frame. It is really a fault basin that is not a component of the Orange Basin delta proper. We expect to see effects. Well, we’ll have effects on that before the year is out.
The drilling was a bit slower than we would have liked, but the smart news is that we were able to make the rig and well bigger and keep it moving. And I think we did a smart job in our ESG compliance, to make sure we weren’t locked down through environmental equipment there. So I think as long as you do it right, and do your query, your ESIA, and it turns out you’re a smart operator, I think it can still work. almost anywhere in the world. If you do it right.
I need to highlight block 3B before we do. We care a lot about this block, this block has a number of perspectives that we think are very similar to the discoveries of Graff and even Venus. And we are in a modification procedure to incorporate a partner. And I like to highlight this little medallion map, on the back left, we have a domain that is about seven times the length of the Guyanese trend. So we drilled two wells and discovered 2 billion barrels. It’s only as smart as you get it from an exploration standpoint.
The next slide. No, my smart, end Kenya, I’ve been talking about Kenya for thirteen years. I know patients have warned them. And I think the market high probably won’t give us much price there. We still think it’s a very smart piece. And we still think we have a very moderate chance of getting a strategic spouse and outsourcing that. He is one of those who believes it when he sees it. But, watch out for the press, I think there’s a smart possibility that we’re going to have an announcement about our marriage before the end of the year.
The next slide. Again, I think I probably noticed this slide before. I mean, to me, that’s why you buy African oil. I think you buy it because you have Nigeria as your main cost and you get Nigeria with a pretty big drawdown, depending on the value of the oil you need to use. If you use today’s oil value, you get it with a reduction of more than 50%, but you use a longer-term value $60 $70 You still get a pretty big reduction only in the Nigerian component and you get everything else for free.
Now, not everything is going to be fine on the right side of this slide. But Venus itself has almost the same price as our market capitalization, if that happens if the valuation wells turn out, they work. The price of Kenya is at least $100 million, up to $500 million for us in the long run.
And then we have this investment portfolio, ECO Atlantic has only drilled one well now, yet they have created a small large portfolio, they have attractive things in Guyana on the other side of the water. And I think ECO is very attractive to me, because I think it has a lot of exploration potential.
Obviously, the discoveries we made in South Africa with Africa Energy. Total are putting a lot of effort into advancing and monetizing them, they also have a lot in the undrilled parts of the basin and potentially even in oil.
So I think Venus is probably the most attractive thing on the right side of this slide. But I think there are some other things that are just as appealing. And I think at the end of the day, why am I a big shareholder of Africa Oil?And why would I buy more? That’s because I think the optionality you get from everything on the right side. And the very low threat you were given of everything on the left side, the left aspect makes it a very investment thesis.
So I think that’s all we have to say in the presentation. I think we let them read the reviews however they want and I think we are in a position to answer some questions.
Q&A session
Operator
[Operator Instructions] Now we will answer the first matrix and the first comes from the lineage of Teodor Sveen Nilsen of SpareBank 1 Markets. Your line is open, ask your matrix
Theodore Sveen Nilsen
Guys, good afternoon. Thank you for answering my questions. And congratulations on my solid series of third-quarter numbers. There are many questions that I think I will limit myself to two three. And the first is just a production trend and some will also decrease the year in production this third quarter or particularly less than the outputs of the first quarter. So, I wonder if we deserve to expect this trend to continue in 2023?Or do we deserve to hope that the new Aegina wells will compensate for some of the decline we have noticed recently?
Second consultation on an exciting Proway. Development, when do we deserve to expect Proway to start production?And then my third query relates exactly to the global design of Africa Oil, Africa Energy with an equivalent impact, of course, is right. to save a little or directly or several days in companies. Do you think this design is also moving forward or do you deserve to be waiting for some kind of key in the next design?Thank you.
Keith Hill
When does production start at Proway a bit?
Theodore Sveen Nilsen
Is Proway’s timeline moving forward?And when will we be waiting for Proway’s production?
Keith Hill
Okay, I’ll take them in order. Yes, to deny is that we hate this graph. And the only explanation for why it’s going down is that, normally, we would have been there drilling wells in March of this year to consolidate that production, a remnant of the fall, of course, and have a very small decline and hopefully even have a buildup in production.
So it all came down to the platform we knew: the operator couldn’t come to an agreement with a local spouse for that platform to work. So they had to go to the market and buy the platform. So we have a well-known platform that’s already under contract with Total, and we’re only going through approvals.
If we get that and drill, I think we can stop that decline and stabilize it, maybe even increasing existing production. So the story of those fields, all 3, especially the two oldest ACPO and Agbami fields, is that every 18 months, they drill 3 to 5 progressive wells. And that’s what helps keep the stagnation going.
So, unfortunately, we haven’t had a chance to do so. So, I think once we do, I’m pretty confident we’ll be able to stop that decline, because the box is working quite a bit like we expect it to be in the models under the tank. And there are stalls in the boxes that have unexploded vaults that don’t even have progression pits yet, the ones that are reserved for the first program.
So, be sure of yourself about it. Proway is waiting for the renewal of this license, although the license renewal is automatic in Nigeria, there has never been a license that has not been renewed. Once you have fulfilled your professional commitments and paid your taxes, which we did. The license automatically renews. But I think since we’re going to invest particularly in the fact that we may not see production until the license extension date, I think the partnership is more comfortable going out and spending cash on Proway after getting the license extension.
As I said in my presentation, I think there’s a smart chance we’ll be done until the end of the month. But nothing is done until it is done. So I think if you see that, if you see this announcement about the license extension, I think we also see ourselves moving very aggressively on Proway. So we’ve developed a progression plan in the field, we’ve done all the engineering studies, we’re pretty much in a position to pull the trigger, you just need to see this license extension before we do.
Once we pull the trigger, there are between 2 and 2. 5 years left for the first production.
And then the last one, that I think this portfolio technique that we have with our exploration companies is unsustainable. I think we set it up for convenience to get into some really smart exploration pieces. And it worked, we’re in some of the rooms, and indeed in southern Africa, and even Guyana, however, I think at some point we have to put that aside, get it up and running regularly. We are not a holding company, we are an oil company. So I think the drilling of key wells right now is Gazania, it’s owned by ECO and Africa Energy, between them they have 87. 5%.
So I think we want to see the effects on that before we see what we want to do, whether we have an ongoing progression assignment or a power assessment assignment or even Gazania. But I think we can have an equation. If we are unlucky, in Gazania, I think there would possibly be a way.
But I think my board has told me that by the end of next year, we want to figure this out and avoid being a corporate holding company and having those blocks. So, as I said, I think there are 3 options, or absorb them, that we would look at for those 3 companies, buying the interests, we don’t have to sell them, promoting them to others, in the case of projects that have been discovered and developed, like Brulpadda Luiperd, and possibly even Venus once we drill the appraisal wells, a direct sale of those prospective projects.
Or we’ve even turned some of them into an exploration vehicle. So I think it’s too early to make that judgment until we see what’s going on on Venus. What is happening with progression assignment in Luiperd-Brulpadda?
What’s in Gazania? But once we have that information, I think the goal is that, until the end of next year, those investments are no longer portfolio investments in Africa Oil.
Theodore Sveen Nilsen
Fine thank you. And just if I can ask the room here, the timing or the announcement of Graff Oil?Is it as if your shortlist is waiting for something this week?
Keith Hill
I’m not sure, we’re still drilling. So I think it probably will be, probably will be this week.
Theodore Sveen Nilsen
It is ok. Heard. Perfect. Thank you.
Operator
Now we’ll move on to our next Array The next one comes from James Hosie, Barclays. Your line is open, ask your Array
James Hosie
Hello everyone. Hi, I would like to know if you can tell us a little more about OML 130 conversion renewals. And can you quantify the magnitude of the investment accumulation so that they can stick to that conversion?Guess what they gave you drilling Aegina until the whales plus the transparent trail and also discussed exploration, just looking to get a concept of how much is going to be spent on that asset over the next two years.
Keith Hill
Yes, I think renewal in one segment, which is the rates. So, I mean, there are fees that we’re willing to pay and there are fees that the government is willing to charge. And there is still a small hole between the two. But I hope it will be finished before the end of the month. And we’re getting there.
In terms of our resolve to invest, I would say in the core areas, you don’t count on that. So, all the wells, we’re going to drill them, all the evaluation, all the progression wells in Aegina, ACPO. All the evaluation / Exploration wells will be drilled, even in the nearby field, whether or not we obtain an extension, the only thing that depends is Proway. And even in that, I believe we will continue to advance this task as much as possible.
So I think if we spent the huge dollar amount on it, we probably wouldn’t do it until the expansion. But I think we’ve invested very little capital in those projects since we bought them. And you have to take care of those fields. So I think drilling 8 to 9 progressive wells is critical. So this will be done as soon as we can get Arabic. And possibly we would even have expanded this program to maintain production. But I think when it comes to license extension, one you trust is Proway.
James Hosie
It is ok. And I guess you can tell us about the fact that I guess rates are a notable problem. Have tariffs been decided through formulas and I assume you are negotiating around some of the effects of that formula?Is that the case?
Keith Hill
Yes, there is, it’s pretty standard. And it has already been done in several licenses in Nigeria. So, we don’t innovate, it depends on what you use, it’s a percentage of the long-term NPV that pays for license renewal. So how do you calculate this NPV?reserves used, what oil value, you use all the parameters that are part of the negotiation.
Therefore, it is quite popular and we are not so far away to be fair to you. So I think our position of Africa Oil, let’s end this and move on. And then we can take on Proway and start exploring those fields.
James Hosie
And then just a momentary question. How we just learned the capacity of the chain of origin and I am: Have you secured all the capacity of the platform and other types, let’s say, of long-term elements that you want for what you plan to do in 2023?Are you still going to market for any of that?
Keith Hill
Yes, assuming we already have this platform under contract with Total. I think we’re fine in either and then. I can’t give you a detailed answer and all the source chain stuff like the casing and the wellheads and things like that, but Total is a very smart operator and I’m sure they’ve taken care of it.
I think the momentary platform descending to Venus still needs to be taken care of a bit. I think they have candidates and they have issued a call for tenders. But this has not yet been assured.
James Hosie
Fine thank you.
Operator
[Operator Instructions] Now we will move on to our next Array And the next one comes from Peel Hunt’s Matt Cooper line, your line is open, please ask your Array
Matt Cooper
Thank you and thank you for the introduction. So, to answer a previous question, I wonder if you can quantify to what extent the suspension of drilling at Aegina had an effect on its production in 2022. And how much is compensated with the 4 good ones?, interventions? That’s my first question.
Keith Hill
Yes, we did all 4 well interventions, and 3 of them went pretty well, which helped stop some of that decline. We are doing other interventions, in addition to looking for hacerlo. no is that we are wasting production, we are only delaying production.
So without drilling the wells, the reserves remain the same, and we’re going to get the barrels, but obviously, especially in our higher oil value environment that we’ve had in the current part of 2022, we’d like to see the barrels come in sooner rather than later.
Therefore, I cannot give you a figure, from the most sensible point in my head, of what you charged us. Again, this is really more of a delay than the actual charge. And, of course, we didn’t spend CapEx, so we took credit for the money that came here with it. But, it is, those are things that keep me up at night. It’s one of my biggest, we want to put a rig on it and we want to start drilling those wells and make sure we maintain that production, because that’s the lifeblood of the industry.
I mean, what is repeating. Sorry, Matt, I just wanted to reiterate that we plan to end the year as part of our control direction for 2022.
Matt Cooper
Yes, I want you to get the valuable ECO? Sorry for the delay, I think maybe, a giant component of this production from the Aegina wells will arrive maybe at the end of this year and next. So why maybe it hasn’t had a giant have an effect on this year’s production and why are you still within the limits?Well, within the limits of orientation.
Keith Hill
An ECO box has been more efficient. Therefore, it is certain to produce around 109% of the target. And even Agbami really had a pretty smart year. much higher this year. So I think if we can get into the progression pits with this platform, we’ll get back to normal.
Matt Cooper
It is ok! Súper. Et. Me wondered if you can explain a little more why Gazania’s well reserve has decreased slightly.
Keith Hill
Yes, I have two reasons. So, I guess I shouldn’t go into too much detail. But at first there was a delay in time. And then the drilling took longer than expected. So, we’re about 15 or 20 days away from forecasts. In passing There are no serious disorders with the well, and it takes more than one night.
Matt Cooper
Okay, that’s great. Thank you.
Operator
Thank you. Presidents, there are no questions online at this time. Mrs. Amini, please continue.
Shahin Amini
Thank you so much. Yes, we have a lot of questions about online streaming that we don’t have much time for. Therefore, we will review to pass as many as possible.
Keith, Pascal, there’s been a number of things that keep repeating themselves and let’s get to that first. And this is a pile of developing money for Africa Oil. And also, what are we or what are we?Can there be an update on our business progression activities?So maybe if you just need a percentage of your perspectives on your plan?
Keith Hill
Yes, Amini, the two are a little hand in hand. I mean, we have some cash on hand and we get at least $200 million, once we have the last extension, we’ll also have $200 million of unused debt. So we have a smart stack of cash to pass the hunt.
But you know, and we have, I would say, part of a dozen, what I think are pretty attractive acquisition opportunities. As we have talked before, let’s compare them with the buyback of our own shares, I can say that when our shares were priced at $2. 30 and $2. 40, things like that, it was quite difficult to find anything better than buying our own shares.
Now that we have a little more prospect in the market, we’ve pushed our constant percentage value up to $3. 30 $3. 40. This is the case, even if it has fallen a little in recent days. But I still think it’s a smart deal in this I think I keep thinking, if you take a look at those maps, five that we set up and do your own math calculations, I still think that even what we paid our maximum value, I think it was around 338 CAD consistent with the consistent percentage, it’s still a smart deal for that price. Therefore, we are proceeding with our buyback program. And we still think it’s a smart deal for this price. But when we take a look at the acquisitions that will be, whether they are cumulative or not.
And I think that’s one thing. We should also take a look at the production assets that will be filled in the future, we are in Nigeria, on the basis of declining assets. And even with the arrival of Proway, we’d like to see long-term, physically powerful generation assets to fill.
So there are still deals to be made, there are still more distributors than buyers, I think we have to be careful and cautious in this market, we’re not going to pay 70% of the value of oil at $80 for those assets. But that’s not what the big guys are looking for.
They bring them on their $60 books, so as long as they don’t have to write down and they can get out of those non-strategic assets and have coins to use in their maximum strategic assets. I believe that agreements must be reached and that will be a top priority. So for us as a control team, if you say what are the 3 things you would drive in 2023, one is a strategic acquisition of one generating asset, two, you get the effects of Venus, and 3 continue to return coins to shareholders, if any.
Shahin Amini
Very well. And ask Pascal. Et once we have the renewal of the OML 130 license on Prime, how is it clarified?
Paschal Nicodemus
The plan right now is to refine that, or the RBA commits and as soon as we get the license extension. And the currency, the RBL, is just below $700 million and the salary is $300. So, the plan is not to generate a lot of new money with the ISIS extension. Therefore, we will probably indicate a single RBL refinancing of a video on a live video system. So, we’re not going to generate a lot of cash. But the overall goal of this refinancing is to make the adulthood of debt bigger again. And of course postpone the total future. I’m not going to be installing RBA. Therefore, we will restore adulthood to a five-year era from the date we signal refinancing.
Today, the age of majority of those debts is May 2024.
Shahin Amini
Thanks Pascal. There are several inquiries about Kenya. And Keith can recommend that. And now the consultation is, how are the negotiations progressing in Kenya?And obviously, you talked about that earlier in the presentation. But is there a follow-up query on this FTP approval?And when is the time for that?
Keith Hill
Yes, I’m not sure I can say much more about the negotiations than I said. We had two stakeholders. We are moving forward with one of the two stakeholders. We disagree, but we feel that we are close. I think there is a – each user can put their own percentage of good fortune into that. But I think we have a pretty high chance of getting a deal there.
I think the FTP procedure is somewhat different. We are running with the government because there are elections there. So there’s a small replacement of a component of the administration there. But I don’t see it as a big problem, we presented it to FTP and they were for approval. And we are following the general course of approval of this progression plan on the ground.
Shahin Amini
So let’s move on to exploration. The factor here is the sickle bus. I’m sure there’s something you can share your views on the case.
The observation is that the article has a rapid exploration portfolio perspective, but how can Africa’s oil trends facilitate the acceleration of developments, which often seem sluggish?
Keith Hill
I’m not sure, I guess you almost have to take them one at a time. I mean, South Africa, Luiperd-Brulpadda is a negotiation about monetizing this fuel and getting fuel costs and promises and the operator is very focused on that.
CEO Patrick Lyonnais was recently in South Africa to talk about this topic, I think that’s the key to unlocking that value. At least I’m following the existing discoveries, we’re also very interested in some of the explorations on the east side of the block, which we think has oil potential, which has been less difficult to monetize than gas. So I think at some point we’d like to see wells drilled into the eastern component of that block as well.
I think for Venus, I think it can happen very quickly once we turn it off. Right now, we have one, well, that’s not proven, whereas we have at least two wells that are being tested, and that result of that not only the lateral continuity of those reservoirs, but also the producibility of those reservoirs. I think you will see Total move very temporarily to the initial phase of production.
I think for both of us, it’s a question of whether we should stay or not. And I think we’ll have to take a look at that when we review our balance sheet, check the timing of that. But I think what we’re seeing is that those two possible advances are accelerating.
If you look, what has been done in Guyana, 3 to 5 years between discovery and first production is not an unrealistic purpose for any of those projects. So I think sometimes, for Brulpadda and Luilosd, the only obstacle is to establish the whole terms of the fuel and to conclude the industry deals, I think we’re in a smart position to take them forward. And then there’s the question, how long should we stay on those projects?Or are we looking to monetize them?
Shahin Amini
Very well. There are some other express questions about the design of his work, but I don’t think it’s appropriate for us to comment on that. I am sure that the operation in Luiperd Brulpadda in due course, we will give an update on this world. . So let’s move on.
There are a number of inquiries about our percentage buyback program. And the first is the announcement that the Canadian government is trying to impose a new tax on percentage buybacks. And the query is, well, how does that transfer to our program?They make you blink, we are investigating this factor in detail, and we will give you an update if necessary in due course, of which we are aware, but at the moment we are only investigating the details. Keith, some investors are questioning the prospect of a really broad takeover bid. So, to go beyond our overall factorr offering. Do you have any perspectives on this?
Keith’s Hill
Yes, just a follow-up to this first point, the tax we are talking about would not take effect until 2024. Anyway. So, we don’t see it as a big challenge right now. The buyback tax, but, yes, I mean, we’d take a look at that. I mean, I think our sister company ITC has been very successful in doing that. . And, at the end of the day, it’s about seeing how much cash we’ve gotten that we need to spend it on, but, again, it’s on our long list of tactics for spending that cash is potentially making a larger takeover bid to buy back more shares.
But I think we also need to consider whether we have the M&A opportunities that we have and where to spend our cash is the big question.
Shahin Amini
Very well. It was really a query about the daily dynamics and schedules for percentage buybacks. And other people wondered, well, can Africa Oil replace those parameters?I just need to remind everyone that Africa Oil is in a blackout. And the blackout era, we had this automatic percentage acquisition plan, which allowed any of our agents to continue to acquire percentages on our behalf. And we can’t really replace the configurations until we get out of the blackout era and pass them on to Pascal and Keith. Once we leave the black house, what is the medium- and long-term plan for percentage buybacks?
Paschal Nicodemus
Keith, ask the question. Or I can answer.
Keith Hill
To find. Absolutely.
Paschal Nicodemus
So I think, first of all, it’s vital to know that they’re a daily limit on how much we can buy again. Therefore, we are restricted to buying back daily liquidity. I think the improvement of those parameters has proven to be very successful. And so, in fact, we’ll continue to keep that in mind in terms of shareholder return.
But I think it’s also vital to know that we need to maintain flexibility in the future, especially in mergers and acquisitions and flexible production acquisitions. And the characteristics of people open up in the future. As Keith mentioned, with $30 in cash, we have our own software installation and think it would be great, an acquisition. So, lately we’re waiting for an auction between doing more mergers and acquisitions or continuing with the percentage buyback program like we did. in September.
Shahin Amini
Thank you Pascual.
Actually, for the question, in case you need to cope with this. Can you give a little color on the spreads that Prime manages to overcome those of Brent for its production?All perspectives on this.
Keith Hill
Yes, so far we’ve had big spikes, I think it was a $9 premium to Brent on one of our shipments to Aegina. But we average $4 to $5. So the market likes those crews, ACPO and Aegina. So, overall, I think we’re making plans to get that $4 premium or so on Brent.
Shahin Amini
Very well. There are some questions about. What is the balance of your percentages?We have provided an update of the percentage of capital, can you see the press with a number on our website?
There is a query that has been bothering me since the market opened this morning and the percentage value is down 7%. Well, Keith, I’ve been discussing this for the past few hours. I don’t know if you have any comments or [indistinguishable 0:52:50].
Keith Hill
Amini, smart. Because it’s a little mysterious to me that I can post those smart numbers when the average inventory value is going down.
Paschal Nicodemus
So, obviously, I was very busy on the trading day. Therefore, it has been available since the opening of the markets. I also talked about some skillful trends in Scandinavia. And a speculation about which we read in more detail. Many investors in Scandinavia may have been looking for issued guarantees to have leveraged exposure to Africa’s functionality. Percentage price of oil, and those positions due to technical trading would possibly have begun to unwind. And that’s why in the first hour we had this frankly unreasonable irrational reaction from the interpreter.
So our effects, it’s speculation, we take a look. But it is certain that the Africa Oil control team sees nothing in our effects and nothing more to this further decrease in industry sources. And that’s our speculation for now.
So, on that note, let’s see if there are questions.
Shahin Amini
Number of queries about Prime we answered. There is a query about the Pascal tax. And the fact that the tax rate on Prime happens to be going up. Can you cover that temporarily for us?
Paschal Nicodemus
Yes, I think the main explanation for why this has tried to attract us is that we have exhausted investment tax credits in Nigeria. Therefore, we are not in a position to agree to continue with those recovered costs. So in the future, we’re going to pay a higher effective TPC rate and that’s the main explanation for why it’s gone up and that’s also translated into your loose cash flow.
Shahin Amini
Very well. And if I can mention a dot there and maybe its size is not so unusual. Is it imaginable to say conversion to the new PIA without extending the license?I guess what I’m looking for to talk to the market is what’s the option for us to take advantage of a reduced tax rate in Nigeria’s oil industry?
Paschal Nicodemus
And yes, the answer is yes. And that is certainly correct, we can convert the PIA without delay without getting the extension. But of course, we used this conversion to the new PIA as a lever to get a license extension earlier, because we want this license extension to be able to refinance the audio installation and a little bit at the Prime level. Therefore, it is a win-win scenario to get a license extension and without delay get the attention of the PIAs.
Of course, if we can’t get a license extension right away, for whatever reason, we’ll consider switching to PIA.
Keith Hill
And that’s a fraction of the change to AIP if the overall tax rate were precisely 50% to 30%, while moving to a natural corporate tax system, whereas lately we’re in that PPT system.
Shahin Amini
Very well. Well, I think I touched on most of the topics. And as we are running out of time, I also need to thank everyone for joining us. Keith, do you have any definitive comments?
Keith Hill
No, I mean, I feel very smart in the business, I think there will be exciting wells next year, especially Venus. I’m still a big oil bubble. I think the transition is moving forward, we’re going to be part of that transition. And we’re going to be the most sensible quartile or decile of ESG performance. That is our goal. But the transition will take 30 to 40 years and I think there’s still plenty of room for oil and gas, as long as you do your thing.
So thank you to everyone who is taking the time and is very excited to move forward.
Shahin Amini
And both, thank you all, and I’ll pass it on to the operator.
Operator
Dear participants, this concludes our convention today. Thank you for participating, you can now log out. Have a day.