Afentra Share Discussion Threads

[highly geared] 13/3/2024 19:18

Indeed. I think the CEO mentioned $40m - $50m FCF from the end of this year. So about £35m. I’d value on about 5x FCF, which doubles the current share price.

[catsick] 13/3/2024 15:35

The oil isn't zero cost or zero tax to get out the ground, the best way to value the company is that the transaction which was very cheap was at around 30k EV per flowing barrel, mid tier oil cos probably worth 50-70k , majors like xom 150k , once the dust has settled here aet shoul re rate from 15-20k to 50k or well north of a pound

[someuwin] 13/3/2024 12:57

SP Angel...

"Afentra (AET LN) 39.3p, Market Cap £86m: Strong operational start to year

• Afentra announced average 2M24 gross production of 23.7kb/d for Blocks 3/05 and 3/05A (~7kb/d net postdeal), with further well interventions planned to support current production levels.

• The Company sold its first 2024 cargo last month, selling 0.45mb of crude oil at $85/bbl to generate pre-tax sales of $38.2m that is now subject to Angolan Petroleum Income Tax (PIT) of roughly 7%.

• Afentra commented that it expects the acquisition of a 12% interest in Block 3/05 and a 16% interest in Block 3/05A from Azule Energy to receive Government approval in the coming weeks and close in 2Q24.

While completion has slipped again into 2Q24, Afentra continues to move closer to completing its transformative Angolan acquisitions that will give it a material equity position in both Block 3/05 (30%) and Block 3/05A (21.33%). Despite the delays, the Company continues to benefit financially from the effective dates of the transactions, which generated $67.4m of cash flow from ~6kb/d in 2023, based on its post-completion equity interest. The business environment in Angola has improved in recent years and we believe that both Sonangol and ANPG (the Angolan oil & gas regulator) are eager to see these transactions complete, believing that the entry of independent E&Ps will attract a new wave of investment in the Angolan oil and gas sector to boost production and extend the life of its fields. For Afentra, while the drag on timelines has been frustrating, investors will hope they are nearing the end of the process and management will finally be able to get on with optimising the production, reserves and value of the acquired assets."

[kevjones2] 13/3/2024 09:15

Nice update. Wouldn't be too uncomfortable if it ran later. African countries go very much at their own pace.

[highly geared] 13/3/2024 08:43

7000 BOPD. X 350 x 85 = $208,250,000 per annum or thereabouts, hence will be throwing off serious free cash flow. Significantly undervalued.

[apotheki] 13/3/2024 07:43

Company update


Afentra plc ('Afentra' or the 'Company') (AIM: AET), the upstream oil and gas company focused on acquiring production and development assets in Africa, provides the following update on its operations:

Operational Update

Production performance on both Block 3/05 and 3/05A has been strong year to date with combined gross average production of ~23,700 bopd (Net: ~6,995 bopd1) for the period to the end of February 2024. The next program of Light Well Interventions is underway and we expect these to support current production levels.

The Company sold its first 2024 cargo of 450,000 bbls of crude oil in February 2024. The sales price inclusive of the Brent premium was $85/bbl, generating pre-tax sales2 of $38.2 million to Afentra.

Onshore License Round

Following the announcement by ANPG, which confirmed Afentra as preferred bidder for a 45% non-operated interest in both KON 15 and KON 19 onshore Angola, the Company is now reviewing the license documentation which will be negotiated over the coming months.

Government Approval of Azule Acquisition

Afentra has received approval from the Angolan Competition Authority for the acquisition from Azule Energy Angola Production B.V. ('Azule') of a 12% non-operating interest in Block 3/05 and a 16.33% non-operating interest in Block 3/05A, offshore Angola (the 'Azule Acquisition') pursuant to a sale and purchase agreement between Azule and Afentra's wholly-owned subsidiary, Afentra (Angola) Ltd, dated 19 July 2023.

The Company awaits approval from the Minister of Mineral Resources, Petroleum and Gas and it is therefore now expected that the transaction will be completed in 2Q 2024. Afentra continues to benefit from the asset cashflow from the effective date of October 2022 and upon the completion of the transaction Afentra will provide details on the financing of the final completion payment, which will be positively impacted by the asset cashflow.

Commenting on the update, CEO Paul McDade said:

"The strong performance of the Block 3/05 and 3/05A assets has continued into 2024 and highlights the significant upside potential of these assets. We expect the Angolan government's approval of the Azule Acquisition to be given in the coming weeks, and this will enable us to proceed with the completion of our third transaction in the country, providing Afentra with meaningful exposure to both of these quality assets. In the meantime, we continue to benefit from the strong asset cashflows from both our existing interests and the Azule interests and this will be reflected in the final payment upon completion of Azule Acquisition."

[lauders] 13/3/2024 07:10

Government Approval of Azule Acquisition

Afentra has received approval from the Angolan Competition Authority for the acquisition from Azule Energy Angola Production B.V. ('Azule') of a 12% non-operating interest in Block 3/05 and a 16.33% non-operating interest in Block 3/05A, offshore Angola (the 'Azule Acquisition') pursuant to a sale and purchase agreement between Azule and Afentra's wholly-owned subsidiary, Afentra (Angola) Ltd, dated 19 July 2023.

The Company awaits approval from the Minister of Mineral Resources, Petroleum and Gas and it is therefore now expected that the transaction will be completed in 2Q 2024. Afentra continues to benefit from the asset cashflow from the effective date of October 2022 and upon the completion of the transaction Afentra will provide details on the financing of the final completion payment, which will be positively impacted by the asset cashflow.

So still not quite over the line but the update is still bullish from what I see. If we drop today it will be a buying opp IMHO. We may however, end positive.

[onedayrodders] 12/3/2024 16:51

From the other thread.

"We will probably be debt free by end of 2024, and then throwing off $50-60m free cash per annum from thereon and sustainable for 7-10 years"

That's without further growth and onshore opportunities.

You cannot help but be impressed by Paul McDade

ODR

[onedayrodders] 12/3/2024 13:16

win / win :o)

[mount teide] 12/3/2024 12:06

Closure of third Angolan deal - Time/Trend is our friend - every day longer means paying less!

[lauders] 12/3/2024 01:35

Itchy feet re: delay in completing Azule deal again? Paul McDade seemed pretty confident it would be completed this month at around 26 minutes into this February presentation:

[mount teide] 11/3/2024 19:46

Chart - As the market patiently waits for deal completion news a visit to the 50 DMA for the first time in nearly 6 months was always likely - to test the resolve of the momentum traders with tight trailing stop losses.

[highly geared] 11/3/2024 17:31

Two steps forward , one step back (as far as the share price is concerned)

[roghart1] 11/3/2024 17:08

Paul McDade, Afentra CEO, is delighted to be on the West Africa Energy Summit Advisory Board, 3rd - 5th September 2024, Accra. We will be shaping future roadmaps for regional energy security as well as showcasing the most compelling oil, gas and energy projects in West Africa.

[dcarn] 08/3/2024 09:17

The Diamondway is currently alongside in Saldanha after arriving yesterday at 09:03.

I would expect unloading to be completed over the weekend.

[tim000] 07/3/2024 16:33

Of course we are, we’re importing a Third World population who are increasingly exerting political pressure on a Third World political party. Strange though that the “Conservative” government thinks there is political advantage in copying those policies.

[onedayrodders] 07/3/2024 16:28

UK is broke .. Councils lining up to declare bankruptcy ... NI tax budget break will be eaten up by Council Tax rises .. all a load of nonsense and depressing

We are slowly but surely transitioning into a 3rd world country .. might take a few decades but it's coming

Certainly not pressuring my kids for grandchildren .. in fact the complete opposite

[mount teide] 07/3/2024 16:13

UK Government's O&G Windfall Tax is a racket worthy of the Mafia!

Less than 24 hrs after the UK Chancellor extended the UK O&G Windfall 75% tax take by a further year to 2029, Harbour Energy, the North Sea's largest O&G producer, reported its 2023 Results:

* Profit before Tax of $0.6bn (2022: $2.5bn)

* Profit after Tax of $32m (2022: $8m)

* Reflecting an EFFECTIVE 2023 tax rate of 95% (2022: 100%)

Unsurprisingly, Harbour Energy's investment cash is now targeting areas of the world which offer far more competitive fiscal rates/operating terms. In this respect Harbour Energy will find themselves spoilt for choice, since some O&G producers like Angola and Malaysia have already gone in the opposite direction, by slashing the Government fiscal take and/or materially improving the operating terms, to attract more investment, to prevent the assets from becoming 'stranded'.

[mount teide] 06/3/2024 11:31

This reads well.

Angola - New Board of the ANPG, the National Concessionaire and Regulator of the O&G Industry, expected to further sweeten the operating environment(fiscal arrangements) to a level more competitive than its global peers to accelerate investment in the O&G sector, in an effort to target a near doubling of production to 2.0m bopd over the med-long term.


'A new Board of Administrators was recently appointed at the ANPG, national concessionaire and industry regulator, the National Oil, Gas & Biofuels Agency following the end of the previous board’s mandate.....

....The new board is expected to double down on efforts to improve the operating environment for investors making Angola more competitive when compared to its peers globally. The ANPG’s primary focus will remain on accelerating exploration in Angola towards increased production......

....Angola plans to increase oil production to 1.18m bpd this year with the goal of reaching previous heights of close to 2m bpd in the mid- to long-term, following an expected boom in new exploration.

....To this effect, Angola is inviting global E&P companies to invest in exploration to achieve this goal. The country concluded its most recent oil licensing round – a 12-block tender featuring blocks in the Lower Congo and Kwanza basins saw 53 bids submitted – in January 2024, with the next round scheduled for 2025. '....Angola O&G 5th March

[kevjones2] 06/3/2024 11:26

I was invested in a few companies based in Africa. They very much go at their own pace. Time and time again, just when I thought an RNS was coming, the news was delayed. So I have no problems waiting here. It'll happen when it happens.

[lauders] 06/3/2024 01:25

Should be an update on the Diamondway shipment and Azule deal soon surely. Perhaps a combined one? That should really do wonders for the share price if it becomes reality. Anyway, not much of Q1 to go so perhaps some FOMO buying may be on the horizon?

[highly geared] 04/3/2024 16:45

Hopefully this starts to motor once Azule becomes official.

[mount teide] 03/3/2024 13:31

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:

'Sustained current oil price environment($70-80/bbl) has potential to deliver >50% value increase'
'Afentra Investment case and 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'
'Multiple low-cost opportunities to increase future production'
'Significant upside from 2C & 3C resources with potential for further upgrades'


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

AIMHO/DYOR