Afentra Share Discussion Threads

[extrader] 05/5/2024 19:42

The Cubans were instrumental in Angola gaining independence, see

and



Battle of Cuito Cuanavale from 1987 to 1988 was the largest land battle in Africa since World War II, where some of the bloodiest clashes of the Angolan Civil War took place.

On the one hand, the FAPLA, the armed forces of the MPLA, at the height of power fought, supported by the Cuban army, and on the other, the FALA, armed forces of UNITA, supported by the South African Army.

Thousands of combatants died on both sides. At the end of the battle of Cuito Cuanavale, both UNITA and the MPLA declared themselves victorious.

The biggest consequence of this conflict was the withdrawal of Cuban and South African forces from Angolan territory, and the consequent independence of Namibia.

With the ostensible 'rollback' of the Communist menace - its historic justification - South Africa acknowledged political reality and the apartheid regime negotiated a peaceful transition of power to the African majority.

Angola owes/owed Cuba big-time...

ATB

[tim000] 05/5/2024 18:10

Sonangol has farmed in to a major exploration and development project in Cuba with ASX listed Melbana Energy. Seems strange that they are reducing investment at home in favour of helping to develop Cuba’s nascent O&G industry, but no doubt the two countries have fairly close longstanding ties.

[mount teide] 05/5/2024 17:46

Energy Transition - Just as many here predicted, the European supermajor pivot to renewables collapses due to unacceptable financial returns.

The O&G supermajor is dead long live the O&G supermajor!

Grandstanding by European and UK 'eco' politicians anxious to burnish their 'green' credentials, has enabled the US O&G supermajors, who correctly forecasted the appalling real world economics of renewables, to steal an oil production growth march on their European peers!

'While the U.S. supermajors continue to raise their oil production, including via major acquisitions, their European peers have only recently pivoted back to boosting oil and gas production after several years of trying to convince shareholders that spending on renewables would pay off—and failing. After the energy crisis, Shell, BP, and TotalEnergies are back to raising oil and gas output, but the U.S. supermajors are far ahead in oil production growth and plans, thanks to the Permian and Guyana.'


The U.S. Supermajors Double Down on World's Top Oil Basins - Oilprice.com today

'Profits at ExxonMobil and Chevron have dropped compared to the record-highs of the past two years, but the U.S. supermajors are doubling down on oil production from the two most prolific growth basins, the Permian shale patch and a top-performing block offshore Guyana.

Both Exxon and Chevron plan to further boost their footprint and oil production in the U.S. and the South American country. Until a few months ago, the key growth driver was higher drilling activity and improved efficiency in the Permian. Now, major acquisitions worth more than $50 billion for each of the two supermajors are set to add to organic growth and further boost their oil production from the world's premier growth basins.

Thanks to the Permian and other advantaged assets such as Guyana, Exxon has almost doubled its upstream unit profitability at constant prices from $5 per oil-equivalent barrel in 2019 to $9 as of the first quarter of 2024. The supermajor expects unit profitability to jump further to $13 per oil-equivalent barrel by 2027.

Unit earnings from the 'advantaged assets' are expected to be $9 per barrel higher than the base portfolio by 2027 at constant prices.

The growth in advantaged assets is a real key driver in terms of overall growth in Exxon's upstream business and a key driver of earnings growth.

Exxon is set to become the top Permian producer soon, as it continues to expect that the U.S. antitrust authority will give the green light to its proposed $60-billion all-stock acquisition of Pioneer Natural Resources by the end of the second quarter.

Announcing the acquisition of Pioneer, Exxon said in October 2023 that the proposed transaction "transforms ExxonMobil's upstream portfolio, more than doubling the company's Permian footprint and creating an industry-leading, high-quality, high-return undeveloped U.S. unconventional inventory position." At close, ExxonMobil's Permian production volume would more than double to 1.3 million barrels of oil equivalent per day, based on 2023 volumes, and is expected to increase to approximately 2 million boepd in 2027.

The Permian has been a key driver of production growth at Chevron, too. The supermajor booked slightly higher earnings for the first quarter than analysts had expected, thanks to higher oil and gas production that offset part of the weaker refined product margins and low natural gas prices.

Chevron's worldwide production was up 12% from a year ago, primarily due to the acquisition of PDC, strong operational performance in the Permian and DJ Basins in the U.S., and the Tengizchevroil affiliate in Kazakhstan.

This year, Chevron expects its Permian production to rise by another 10%, following 10% growth last year, it said in its 2024 production outlook.

Chevron is also looking to gain exposure to another hot oil production area—offshore Guyana, via the proposed acquisition of Hess Corporation, which is Exxon's partner in the offshore Stabroek block that pumps about 600,000 bpd of crude oil.

Apart from regulatory clearance, Chevron and Exxon are in an arbitration case over whether Exxon has the right to first refusal of Hess's stake in Stabroek.

"It's remarkable to think that within eight years of first oil, Guyana will have a production capacity of more than 1.3 million barrels per day," Exxon's CEO Darren Woods said, adding, "I believe Guyana will go down as one of the most successful deepwater developments in the history of the industry."

While the U.S. supermajors continue to raise their oil production, including via major acquisitions, their European peers have only recently pivoted back to boosting oil and gas production after several years of trying to convince shareholders that spending on renewables would pay off—and failing. After the energy crisis, Shell, BP, and TotalEnergies are back to raising oil and gas output, but the U.S. supermajors are far ahead in production growth and plans, thanks to the Permian and Guyana.'

ps:
Angola - ExxonMobil, is looking to invest as much as $15 billion into the development of hydrocarbon reserves in Angola’s offshore Namibe Basin by 2030.

Improved fiscal terms for Exxon's Blocks 30, 44, and 45 secured last year from Angola’s national concessionaire and regulatory body(ANPG); has made exploration in offshore Angola so competitive it's enticed Exxon back to Africa.

According to Exxon the investment is largely based on the success of major commercial oil discoveries in the southern African country and follows the improvement of fiscal terms in the basin by the Government of Angola.

Exxon expects to make up to $200 million of investment this year into further seismic studies and the drilling of an exploratory well - and estimates the development of a large commercial discovery could result in revenue of between $20 billion and $40 billion for the country – at an average oil price of $55/bbl.

[mount teide] 05/5/2024 12:29

Update to a post made earlier in the year.

RE: Divestment of high quality, mature O&G assets in fiscally attractive / low taxed Angola.

The operating partner of all our Angolan offshore and onshore assets, Sonangol, the NOC, is currently enacting a huge privatisation scheme, which includes the disposal of a material segment of its O&G assets.

This is likely to provide further high quality acquisition opportunities as it's consistent with Afentra's MO and positioning as a key stakeholder to Sonangol:

'Afentra’s entry into Angola in May 2023 saw the Company establish a foothold in a key target geography with a wealth of future growth opportunities. Afentra is acquiring interests in quality assets with scope to enhance and extend production alongside improving environmental performance, while positioning itself as a key stakeholder to support state-owned Sonangol with its transition strategy.

Afentra’s strategy is to build a material diverse portfolio of mid-life producing assets that no longer fit the portfolio of major companies. We seek to optimise, redevelop and extend their lives in a safe, responsible manner whilst reducing harmful emissions. These production assets underpin the business with LOW-RISK cash flow. Over time, Afentra aims to build a portfolio of operated positions, levering the extensive technical operating experience possessed by the team. We will also acquire non-operated positions alongside quality operators and credible JV partners with a shared alignment to operational excellence and environmental stewardship.'


Angola - Sonangol Asset Divestment Programme

In June 2022, Sonangol began a process to hunt for partners in blocks 3/05, 4/05, 5/06, 15/06, 18, 23, 27 and 31 in an effort to attract new investors to boost oil and gas production and also reduce its financial obligations.

Ten years ago and more, a barrel-load of bidders would have battled to enter these blocks, which offer exploration, development and production opportunities aplenty in a country once considered the oil world’s El Dorado.... Upstream 2021

'Admittedly, under the regime of former president Jose Eduardo dos Santos, few companies apart from incumbent supermajors — or those close to Sonangol, the ruling clan and its running dogs — would have had a realistic chance of acquiring these assets.

Many deals would have been agreed behind closed doors, with only those in the know and with strong Angolan relationships standing a chance of being successful.

But times have changed. Angola’s President Joao Lourenco genuinely seems to want things done by the book, with increased transparency the order of the day — as reflected in the formal bid agenda for this Sonangol farm-out process covering deep-water and shallow-water blocks.

While these "open book" efforts are laudable, they coincide with the energy transition, so it will be a challenging time for any competitive acreage bid process.

Jersing, currently business development advisor to privately owned exploration start-up Eburon Resources, described the three offshore blocks as “heartlandR21; plays with significant producing fields plus development and exploration upside. “They will go for hundreds of $millions because they are extraordinary assets,” he said.

Another block with promise is 3/05, where operator Sonangol wants to reduce its 50% stake. A non-operating stake in this asset could be in the sweet spot for acquisitive Afentra, the investment vehicle of former Tullow Oil chief executive Paul McDade, and also Vaalco Energy, Jersing said....."The exercise will attract interest from new companies,” but warned, “we’re not in the golden age of the oil industry......suggested bids could be based on future oil prices of $55 to $60 per barrel." '


Interesting to note that Sonangol elected to choose preferred bidders for the offshore acreage farm-out of these first eight assets put up for divestment.

Afentra was one of six initial bidders on shallow water block 3/05, which proved one of the most highly regarded and bid-on.

After the dust settled and smoke cleared on the auction process, Afentra, indigenous player Somoil, and Namibia’s state oil company Namcor were among the major winners for the various assets, while 10 bidders failed to get selected to make the grade.

The successful bids and financial return projections for the eight assets up for auction would, without question, have been based/heavily influenced by the $57.28/bbl average oil price during the seven year period prior to the announcement of the auction.

Afentra's Q1/2023 Presentation of the Valuation Summary of the Block 3/05 Deal, confirms this view:

* $70-80/bbl oil has potential to deliver >50% value increase
* Afentra Investment case/Upside potential provides an additional 30% value increase
* Robust asset economics with a breakeven of $35/bbl
* Potential to improve and maintain Opex @ $20/bbl'
* Every 1% increase in recovery from OIIP of 3 billion bbls delivers 30 mmbbl
* Minimal Capex required to realise 2P case of 115.2 mmbbl
* Significant upside from 2C & 3C resources with potential for further upgrades


With a consensus 2024/25 Brent forecast of $80-$90/bbl, the 3/05 working interest has the potential, after adjustment for the financial benefit accrued from the effective economic date of the deal, to annually throw off free cash equivalent to multiples of the final price paid for the asset,

AIMHO/DYOR

[tim000] 05/5/2024 10:39

The Azule website shows that the company has widespread interests in Angola, although there’s no detail on production levels per block. As you say though xxnjr, it seems quite likely that this sale to AET is a harbinger of a disinvestment strategy from Angola, to focus on larger projects such as Namibia.

[xxnjr] 03/5/2024 19:31

I see Azule have farmed into Rhino's block in Namibia's Orange Basin. Can't say I'm familiar with Azule's other assets in Angola but if they have success in Namibia it could possibly herald further Angolan mature asset sales, assuming there are more mature Azule assets to sell.....

[someuwin] 03/5/2024 15:16

Lots of buys all of a sudden.

[onedayrodders] 01/5/2024 07:30

Thanks Tim ... but I accept it was sort of inevitable!

[billy two cocks] 30/4/2024 17:17

Exciting times.

[mount teide] 30/4/2024 16:51

t000 - Guru indeed - 'into the 50's by mid May' ....... gets there before the last closing bell in April!

[roks] 30/4/2024 16:33

Same tomorrow? Nice....

[tim000] 30/4/2024 15:15

Well done to the guru, ODR!

[roks] 30/4/2024 15:02

Are we breaking out?

[mount teide] 30/4/2024 11:52

Some interesting research and opinions from posters Templeton and My Rhino on Twitter in connection with publication of a recent broker note and Government approval of the acquisition of the Azule working interest in Block 3/05 and 3/05A.

'Worth noting how far estimates for FY '24 have moved since they were last updated in (November)

PAT £42.5m (Nov £13.8m)
FCF £42.9m (Nov -£7.4)
Closing cash £9.8m (Nov -£30.7m)'.......Templeton


'Run a few numbers - My prediction for Azule completion are:

$25m net payment at completion (down from $47m)
570,000 barrels as stock in tank (worth circa $50m)

Let's see if I am right. Obviously would be quite positive.'......Mr Rhino

[cf456] 30/4/2024 11:31

"#AET Afentra going to replicate Serica and Rockrose Energy returns… hopefully. Positioned for that anyway!"

[return_of_the_apeman] 30/4/2024 11:16

Have sold a trading tranche on expectations of a technical pull back. Might buy them back if support at 50 is found later but if it runs away - c'est la vie :-)

[mount teide] 30/4/2024 10:37

Good to see 50p on the ASK side of the book for the new management team at Afentra this morning - its the highest shareprice the stock has seen since 2014, when Brent had previously been averaging over $135/bbl adjusted for inflation for a four year period.

[fatfish] 29/4/2024 16:34

Had a little dabble myself today.
Also, Mount Teidi, yes long may the trolls stay away.

[zengas] 29/4/2024 16:17

Quite simply doing what it said on the tin from day one under McDade and Co.

As time progresses and the next assets are added i expect it to progress to a future 4 bagger from these levels.

A wild card for further upward momentum in the share price would be a sucessful exploration well given the licence prospects reserves potential and RF in line with the existing producing assets.

[mount teide] 29/4/2024 15:21

Considering the exceptional potential here, and the fact the stock has quietly generated over 100% capital gain in a year.........highly encouraging that AET still remains little more than a small blip on the extreme outer edge of the investment community radar, and on a thread where church mice make more noise!

Long may it continue......as it's enabling well researched investors, as the investment case continues to strengthen, to average up on pullbacks at a 'value' price,

AIMHO/DYOR

[mount teide] 29/4/2024 13:44

Encouraging to see the shareprice continuing to push further North on strong buying pressure.

Including high 5 and 6 figure trades at the full ASK price.

[onedayrodders] 27/4/2024 13:02

Baron Investments
@baroninvestment
A very encouraging meeting held with #AET. Confidence further enhanced #Afentra

[apotheki] 26/4/2024 15:20

Afentra

Afentra has provided the following update regarding the previously announced Angolan acquisition.

Government Approval of Azule Acquisition

Afentra is pleased to announce that it has received approval from the Government of Angola for the previously announced acquisition of a 12% non-operating interest in Block 3/05 and a 16% non-operating interest in Block 3/05A from Azule Energy Angola Production B.V. (‘Azule’), pursuant to a sale and purchase agreement between Azule and Afentra’s wholly-owned subsidiary, Afentra (Angola) Ltd, dated 19 July 2023.

The Company is now working with Azule to finalise the formal completion of the Azule Acquisition which is anticipated to occur within Q2 2024 as previously announced. At that time, we will provide an update on the deal completion including the asset cashflow from the 1 October 2022 effective date.

Punja Discovery Block 3/05A – Enhanced Fiscal Terms

Following a request by the Block 3/05A partnership the Government of Angola have declared the Punja Development Area located in Block 3/05A, as a marginal discovery. As a result, the applicable fiscal incentives will be applied to this discovery, significantly enhancing the commercial value of this potential development.

Commenting on the update, CEO Paul McDade said:

“The Angolan government’s approval of the Azule Acquisition allows us to proceed with the completion of our third transaction in Angola providing Afentra a material equity position in these world-class assets. The improved fiscal terms for the Punja Discovery is another clear indication of the support given by the Government of Angola to parties willing to invest in their oil and gas sector. This further encourages us to continue to work with Sonangol and our joint venture partners to grow production and reserves as we develop the vast potential of both the producing fields in Block 3/05 and the significant discoveries within Block 3/05A.”

Approval for this addition in Angola that we already knew about is fantastic news and takes the stakes in blocks 3/05 and 3/05 to 30% and 21.33% on completion if my memory is correct. In addition the news about the Punja discovery means that the Government want to make it work and shows further assistance to oil and gas industry.

Theres a very good reason that the shares are in the bucket list and why they have doubled in the last year, with a target price of 100p they remain amongst the winners in the selection box, and what’s more, there’s more to come…

[cf456] 26/4/2024 14:39

"A very encouraging meeting held with #AET. Confidence further enhanced #Afentra"