 Acquisition of shareholdings in Angolan Blocks 3/05 and 3/05A - with a 40,00 bopd gross organic production development programme announced in summer 2024(12,000 bopd net), these deals have the organic potential to generate shareholder value many, many multiples of the existing share price alone over the second half of this decade.
The headline 2022 negotiated price for the assets was circa $137m plus contingencies - the Blocks were then producing circa 4,000 bopd net for Afentra....with upside potential with investment of 7,500 bopd net.
Final price paid for 30% of Block 3/05 and 22.5% of Block 3/05A was an astonishing $9.7m after adjustment for asset cash flow contribution from the effective date of each deal.
However, six months after completion of the third and final shareholding (Azule) the assets are already producing 7,200 bopd, from a recently introduced programme of low cost LWI's, increased water injection and infrastructure remediation and planned maintenance, and according to the management in the latest shareholder video, produced an average of 6,200 bopd in 2024 which financed $150m of asset life extension/capex projects and generated $87m of FCF.
AIMHO/DYOR |
With the staggering numbers involved, anything involving AET oil production and I’m reaching for my 12-digit pocket calculator (originally purchased 15 years ago when SEY had zillions of shares in issue).
• Best forecast field(s) production: 40k BOPD
• AET share: 30%
• Assumed price of oil (GBP): £60/barrel
• AET shares in issue: 226 million
So, best case annual net receipts for AET = 40,000 x 30% x 60 x 365 ≈ £263 million
Divided by the shares in issue = 116p
To cater for all the stuff I don’t understand, say the net amount available for shareholder funds is only a third of this, 39p
…and assuming a typical share yield of 6%, suggests an indicated share price of 650p
Yet the current share price languishes at 48p? |
"what we can tell you is that there's a lot of deal activity happening in Angola and also in West Africa and we're very actively reviewing a number of different opportunities, some of them are very sizeable." |
For those that missed the meeting its up now to view |
Very upbeat Investor Meet Company session. Next acquisition could be a biggie. |
Maurel & Prom - 'Activity for the year 2024' - announced 30th Jan 2024
Angola
Post field Shutdown for planned maintenance:
'Production gradually resumed in early October following the end of scheduled maintenance operations that had affected production in the third quarter of 2024. The production level is currently at its highest, with M&P’s working interest production reaching 4,809 bopd for the months of November and December.'
Afentra reported an average production of 7,205 bopd for December 2024 - against annual production for 2024 of 6,229 bopd.
M&A's average production figure for Nov-Dec 2024 is equivalent to 7,085 bopd for Afentra
This suggests production post the restart continues to ramp-up from the ongoing field production development operations and shutdown maintenance work.
M&A reported P2 Reserves
20.8 mmbbls - 2P / end 2023
-1.6 mmbbls - Production
+2.3 mmbbls - Revison
21.5 mmbbls - 2P - end 2024
17.0 mmbbls - (79%) - 1P reserves as a % of 2P |
Investor Meet Company session in around 45 minutes if anyone is unaware and would like to attend. Will be recorded and available tomorrow if not. |
M&P showing 2P reserves addition of 0.7m barrels. Read across is 1.05m barrels for AET - this is after production. Not too shabby |
Around the total number of shares outstanding (226m) have been traded over the last 9.5 months.
Suspect much of the share price consolidation between 45p and 60p is the result of shareholders sitting on 3-4 baggers following the announcement that Afentra had been selected as the preferred bidder for the Angolan 3/05 assets by the Angolan Regulator and completion of the three deals and, decided to take some profit off the table.
Like all good deals, these share price transactions are being conducted at a level pitched to attract buyers in decent volume. |
"They didn’t use rocket emoji in their RNS and didn’t say they have a monster deal ready for next week so holding for more than 7 days triggers a criminal offence on AIM."
So true, that made me smile.
"To the moon" lol. |
They didn't use rocket emoji in their RNS and didn't say they have a monster deal ready for next week so holding for more than 7 days triggers a criminal offence on AIM. |
Why so much selling after strong results? |
Angolan O&G Industry - Deal Closure Times
Afentra averaged 1 year 6 months to secure Government Approvals and complete the three deals signed to purchase shareholdings in Block 3/05 and Block 3/05A from Sonangol, INA and Azule.
Some 2 years and 9 months after the Tende Energy - Somoil Consortium signed an SPA with Sonangol, the NOC, to acquire interests in Angolan Offshore Blocks 18, 27 and 31 - the deals are yet to receive Government Approval never mind complete.
Hopefully, the Consortium negotiated an effective economic date for the deals such that the adjusted price paid for the assets on completion, will be at a large discount to the headline price to compensate for the extraordinary long wait for the deals to be given government approval & concluded. |
Asset acquisition or RTO? |
Why would suspension be coming? |
Suspension coming? |
Once the 5%'s are satisfied they have milked the cow, I expect a 70p handle by mid 2025 or sooner.
just IMHO |
Note that Frac spread crews in US are down 60 year on year - just 183 in total . Some of that is weather related , some is due to drilling longer 3 mile laterals and needing less crews and some is due to companies prioritising cash returns and not drilling .If crews only return to 220 by March (peak fracking season) that is 50 below 2024 and 70 below 2023 |
Strong dollar playing its part too. Can't underestimate the impact of currency on oil sales too. |
Trump's ‘drill, baby, drill’ call for an increase in American oil and gas production has found little support from US producers, including the biggest two oil firms, Exxon and Chevron.
Suspect his effort to get the Saudis and OPEC+ to increase output to lower oil prices will not be any more successful than his effort get US food prices down - as the economics no longer support materially increasing production in the US or for much of the global oil industry below $70-75/bbl after considering the impact of inflation on production development break-even costs over the last decade.
Interesting to note that tin eared Saudi Arabia today announced a significant increase in oil pricing for March delivery to China & SE Asia.
Brent Oil Price
$111/bbl - 2005-2015 / Average Inflation Adjusted Price
$75/bbl - 2015-2025 / Average Inflation Adjusted Price
$92/bbl - 2005-2025 / Average Inflation Adjusted Price
$76/bbl - today
At $75 Brent the industry has seen no increase in the average price adjusted for inflation for 10 years and, a fall of $16/bbl over 20 years.
With respect to profitability - after taking into account the impact of inflation on costs its easy to understand while the likes of Exxon and Chevron are targeting their US CAPEX mostly on generating further efficiencies from the high margin producing assets to maximise free cash flow, rather than go for production growth by developing the low margin assets.
In announcing their Capex plans for 2025 and beyond, both supermajors stressed they would seek efficiencies, including in capital allocation and maximising free cash flow.
Chevron said: “Our 2025 Permian Basin spend is lower than the 2024 budget and anticipated to be between $4.5 and $5.0 billion as production growth is reduced in favour of free cash flow.”
Exxon has announced it will prioritise “competitively advantaged, high-return, low-cost-of-supply investments." |
Trump wants lower oil price so funds are readjusting their risk and exposure to oil stocks. |
would have expected this to be ticking up with the investor report on the 30th.
At this rate will be able to average down soon.
Cash positive and much to look forward to, why would this be nose diving. ?? |
‘#aet #afentra
Each cargo sold increases cash by around 17m$ !
There are 4 planned in 2025.....
By June 25 #aet could have around 90m$ in cash to use for another acquisition
At that point you can target assets worth 200-300m$ and increase debt to around 240m$ with no need for an equity dilution !
2-300m$ assets should be an extra 7-10,000 bopd production that can hopefully be improved like 3/05
At that point you could have a multi jurisdiction producer with 15-20k bopd
What's that worth ?
My guess is 4-500m$ in EV
The market is asleep here’ |
And a little more re Congo-Brazzaville as a prospect...
hxxps://apanews.net/congo-aims-to-double-oil-production-with-new-projects-and-revitalization-efforts/
.."The Republic of Congo is poised for significant growth in oil production, with ambitious plans to double output to 500,000 barrels per day by 2025. This ambitious target is being driven by a series of new projects and revitalization efforts in existing oil fields...." etc
GLA |
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