Afentra Share Discussion Threads

[onedayrodders] 24/4/2024 11:01

That would be another cherry on the top to an already exciting future

[mount teide] 23/4/2024 15:54

Neighbour Namibia - a whale discovery, comparable to the collective size of Guyana's offshore discoveries to date( and more than three times the STOllP of Block 3/05), sees shares of operator Galp Energia surge after the company announced the first phase of its exploration in the Mopane field in offshore Namibia could contain at least 10 billion barrels of oil.


Namibia Racks Up Another Major Offshore Oil Discovery - Oilprice.com - today

'Shares of Portuguese integrated energy operator Galp Energia have popped more than 20% in Monday’s early trading session after the company announced that the first phase of its exploration in the Mopane field in offshore Namibia could contain at least 10B barrels of oil.

Galp says it conducted testing operations at the Mopane-1X well in January and the Mopane-2X well in March, with, "significant light oil columns discovered in high-quality reservoir sands." The Mopane field is located in the Orange Basin, where Shell Plc and TotalEnergies SE have made several oil and gas discoveries. Galp produced an average of just over 122,000 barrels of oil-equivalent per day in 2023.

According to Galp, flows achieved during the tests reached the maximum allowed limit of 14k bbl/day, "potentially positioning Mopane as an important commercial discovery." Citi is bullish on Galp’s discovery, saying the test results are close to a best-case scenario, and has labeled the discovery as "totally transformational" to the company.

From some perspective, Galp’s discovery is comparable to the more than 11 billion barrels of recoverable oil and gas contained in Guyana’s Stabroek block, an 6.6 million acre (26,800 square kilometers) area owned by U.S. oil majors Exxon Mobil Corp and Hess Corp, as well as China’s CNOOC Ltd. However, Chevron Corp could end up partaking in Guyana’s prized asset if it succeeds in its planned $53 billion merger with Hess. Exxon is the main operator of the block with a 45% stake while Hess and CNOOC own 30% and 25%, respectively.

Galp has launched the sale of half of its 80% stake in Petroleum Exploration Licence 83 (PEL 83), which covers almost 10,000 square kilometers in the Orange Basin. Namibia’s national oil company NAMCOR and independent exploration group Custos each holding a 10% stake apiece.

Galp plans to cede control of the development of the project to the potential buyer, likely to be a major international energy company with a strong track record in project management. Galp has hired Bank of America to run the sale process, with proceeds likely to be in the billions of dollars.

The Mopane discovery--one the largest made in the nascent basin following successful exploration campaigns by rivals TotalEnergies and Shell--could help kickstart the southern African country’s oil industry. In recent years, Namibia has attracted huge interest from international oil companies seeking to grow their production..

Despite the ongoing clean energy transition, most energy analysts have predicted that oil demand will continue growing for years, if not decades. The U.S. Energy Information Administration (EIA) is the most bullish on long-term oil demand, and has predicted a demand peak will not come before 2050, while the OPEC Secretariat sees it coming in 2045.

According to StanChart, a structural long-term peak is very unlikely within 10 years despite a high probability of cyclical downturns over the period. StanChart has argued that the current gulf between demand views creates significant investment uncertainty which that’s likely to force longer-term prices higher.'

[onedayrodders] 22/4/2024 11:44

I'll be happy with a steady upward climb in the oil price over the next few years ... can you imagine the chaos of a quick doubling oil price shock

[mount teide] 20/4/2024 11:20

Chart many have been waiting for Bloomberg to publish for years - Oil Price Adjusted for inflation from 1970 - 2024.

Confirming that the oil price today in real terms would have to nearly double to reach the level it averaged for 4 years between 2011 and 2014, and would have to go up by 122% to reach its all time inflation adjusted 2008 high price.

[tim000] 19/4/2024 21:48

AET’s assets do seem like the proverbial gold mine. It will just take a little time to get each field up to peak efficiency. As non-operator, AET management have the time to focus on M&A to replicate this business model. The potential of the company looks amazing.

[mount teide] 19/4/2024 20:57

xxnjr - 'There's nothing marginal about 48K bopd from 2 wells!'

Exactly - took the information in good faith since it was published in a well regarded O&G industry journal. Unable to corroborate it elsewhere, but I did recall that each of the early wells on a previously retired oil field that Advance Energy once planned to re-open had flowed at between 25,000 and 30,000 bopd.

'2 wells in a sweet spot could equate to Afentra's CPR'

All for a low cost, high graded, initial development of the Punja field provided it doesn't materially impact the longer term reserves recovery.

Block 3/05 - Interesting to note in the CPR that of the 108 mmbbls (gross) of 2P reserves, 35.9 mmbbls is attributed to water injection restoration....$3.1bn of gross future revenue at $85 Brent potentially generated from restoration of water injection.

A huge incentive to the field partners to make further progress on this relatively low cost production development initiative, since the peak water injection target calculated to deliver the P2 figure is just 50% of the design capacity of the existing equipment/infrastructure, at which it consistently performed for many years, before the impact of a lack of planned maintenance and failure to carry out machinery repairs, extracted its toll.


AIMHO/DYOR

[xxnjr] 19/4/2024 09:40

Mount Teide - Impressive numbers. Have to say I'm slightly surprised by those. There's nothing marginal about 48K bopd from 2 wells! If that is what the suggestion is.

Digging around a bit I found this linkedin CV


"PUNJA
jun. de 2012 - ago. de 2012
FEED project for PUNJA oil field located within Block 3-05A in Angola. Production facilities include two remote wellhead platforms with a Total of 16 Wells and a Processing platform with Gas compression capabilities. Was involved into the Process Design of the Processing Platform at Technip Office in Luanda, from full HYSYS simulation to PFD production of the main processes."

If the two marry up then 16 wells for 48K gross = 3K bopd per well

2 wells in a sweet spot could equate to Afentra's CPR

"contingent consideration of US$7.5 million is payable to Azule in respect of the Block 3/05A Acquisition if [amongst other conditions]: average daily oil production from the Punja Development Area over the 'relevant period' exceeds 5,000 boe per day."

Maybe project has been scaled back as economics now considered 'marginal'?
Who know? Hopefully we'll get more info after Azule deal closes and Afentra host their upcoming presentation.

[mount teide] 18/4/2024 21:35

Punja Development Area Block 3/05A - outrageous good fortune that Punja has been approved by the Angolan Government as a Marginal field for tax purposes, when considering that peak production is estimated at 48,372 bopd of oil and condensate, with 203 million bbls of recoverable reserves.......from two production wells, tied back to Block 3/05. Estimated Capex: $125m-$175m?

Post closure of the Azule deal Afentra will have a 21.33% working interest in an asset considered to have the potential to produce 10,318 bopd(Net) at estimated peak production. Average production during the first 10 years is estimated at 34,000 bopd gross, 7,252 bopd net.

This suggests AET's production target of 30,000 bopd(Gross) for Blocks 3/05 and 3/05A combined, has the potential to prove the understatement of the decade.


Punja Conventional Oil Field, Angola - Offshore Technology - April 2022

'Punja is a conventional oil development located in shallow water in Angola and is operated by Sonangol P&P. Discovered in 1982, Punja lies in block Block 3, with water depth of around 167 feet.

The project is currently in approval stage and is expected to start commercial production in 2024. The Punja conventional oil development will involve the drilling of approximately two wells and includes subsea tree.

Production from the Punja conventional oil development project is expected to begin in 2024 and is forecast to peak in 2025, to approximately 48,372 bpd of crude oil and condensate. Based on economic assumptions, the production will continue until the field reaches its economic limit in 2062.

Recoverable reserves - The field is expected to recover 203.9 Mmboe of crude oil & condensate.'

[xxnjr] 18/4/2024 15:46

Anybody happen to know if a relevant gov.dept in Angola publishes monthly production data by field?

[mount teide] 18/4/2024 11:15

M&P - Block 3/05 and 3/05A Q1 Production - a 34% uplift on Q1/23, at an average Brent price of $83 versus $78 in Q1/23.

And an average Brent price to date of $90 in Q2/24, compared to $77 in Q2/23.

Azule deal completion - since the Angolan Government has already approved the sale of a material working interest to Afentra of the same asset from Sonangol, the National Oil Company, it's hardly likely they're going to prevent Afentra from acquiring the Azule working interest, particularly when Azule, owned by two oil majors, is the largest producing independent O&G company operating in Angola and, is currently investing heavily to materially raise production further from its Angolan offshore sector assets.

Sales value of Afentra's Q1/2024 oil production, including the Azule working interest, at the average Brent price would be in $50m-$55m range.

Maurel & Prom: Angolan assets
Block 3/05 - 20.00%
Block 3/05A - 26.67%

M&P working interest oil production of 4,634 bopd in Angola in Q1/2024, an increase of 2% from Q4/2023.

Globally, in Q1/2024 M&P achieved a positive net cash position for the first time since 2007.


AIMHO/DYOR

[onedayrodders] 18/4/2024 10:10

Such a positive dilemma !!

;o)

[catsick] 18/4/2024 09:39

Need to get this deal closed asap.... Even though the delay delivery is the best part of these deals!!!

[croasdalelfc] 18/4/2024 08:07

That's a 34% uplift on Q1 2023

[croasdalelfc] 18/4/2024 06:36

Production for M&P was 4634 bopd in Q1. That is ~ 6950 bopd at 30% stake

[xxnjr] 15/4/2024 15:10

Thanks for Punja stuff MT. I was unfamiliar with Punja. Quick look. A few snippets from 09/2023 Admission Doc/CPR

".....the Punja Development Area Licence was extended by Executive Decree 465/18 on 22 October 2018 until the date falling 20 years after first lifting (expected in 2025).

.....contingent consideration of US$7.5 million is payable to Azule in respect of the Block 3/05A Acquisition if [amongst other conditions]: average daily oil production from the Punja Development Area over the 'relevant period' exceeds 5,000 boe per day.

.....Block 3/05A, contains the undeveloped discoveries Punja, Caco and Gazela with an estimated in place resource of 0.3 billion barrels.

.....The Punja development is also being progressed and different solutions evaluated."

[mount teide] 15/4/2024 14:16

Approval of the Declaration of Marginal Discovery - Significantly improved fiscal terms/tax incentives for Punja Development area of Block 3/05-A, where Afentra has a working interest, soon to be increased to 22.5%



Courtesy of 'Bobinvest' on Investopod

[mount teide] 15/4/2024 12:30

c3 - thanks for your comments. Good to hear the thread has been of value for further investment case research.

[mount teide] 15/4/2024 12:26

d35 - My money would be on a further shallow water Angolan acquisition.....NOC Sonangol have a large number of O&G assets potentially available as part of their huge privatisation programme.

In Jan 2024, the management stated they had been working through further regional M&A opportunities for 18 months.

So, relatively soon after completion of the Azure deal, the likelihood of AET announcing another attractively priced acquisition of high quality, long life, mature assets with excellent reinvestment potential and a significantly backdated effective date, is probably quite high.

Would not be surprised if the next acquisition was similar to Block 3/05 - ie; a non-operated, significant working interest in a large oil asset being vacated by an oil major or NOC.


'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.'



AIMHO/DYOR

[dragon35] 15/4/2024 10:40

Wonder when the FCF will be put to use on a new asset? They got to have eyes on something. Anyone seen any obvious candidates?

[cardinal3] 13/4/2024 22:20

MT

I've just come across this and find it a most helpful and informative thread, and thanks are due to you. The case appears compelling if you are into O&G but having been bitten/scammed on small explorers over the years I am cautious enough to want to look at it all carefully! In this case the management seems to have good experience of success which is positive.

[croasdalelfc] 13/4/2024 07:41

- Asset level cashflow generation related to 30% equity in 2023 was $67.4 million at an average weighted sales price of $90/bbl.....Production is up 15% for 2024 vs 2023.Brent average is around $85 for 2024. They get a premium of $1/2 per barrel Capex is around $20m. Imo there is a good chance they can generate $50m FCF after capex in 2024

[yumyum] 12/4/2024 23:42

Thank you very much Mount Teide. Appreciated. I will ponder on all that and see if I can concoct an improved spreadsheet. Your share price thoughts look cautiously modest perhaps.

[mount teide] 12/4/2024 13:53

Also worth remembering the modified fiscal terms for Block 3/05 were approved in Q4/2023 and backdated to an effective date of 1/1/2023.