Africa Oil Corp

TSX:AOI

Earnings Call Transcript 2023-Q1

[Operator]

Hello everyone. My name is Nadia, and I will be your conference operator today. At this time, I would like to welcome everyone to the Africa Oil First Quarter 2023 Results Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be the question-and-answer session. [Operator Instructions] Please note that this event is being recorded. The recording will be available for playback on the company's website.

I would now like to pass the meeting to Mr. Shahin Amini, Africa Oil's Investor Relations and Commercial Manager. Please go ahead, Mr. Amini.

[Shahin Amini, Investor Relations and Commercial Manager]

Thank you, operator. On behalf of management, I thank you for joining us today for our first quarter 2023 results call. I'm joined today with our President and Chief Executive Officer, Mr. Keith Hill; and our Chief Financial Officer, Mr. Pascal Nicodeme. Keith and Pascal will present the quarter's highlights and the business outlook before we go into the Q&A session.

I would like to remind everyone that remarks made during this session are subject to forward-looking statements, which involve significant risk factors and assumptions and have been fully described in the company's continuous disclosure reports. The information discussed is made as of today's date and time, and Africa Oil assumes no obligation to update or revise this information to reflect new events or circumstances, except as required by law. The company's complete financial statements and related MD&A are available on the company's website and on SEDAR.

Keith, we're ready for you. Please, go ahead.

[Keith Hill, President and Chief Executive Officer]

All right. Thanks everyone for dialing in. It's been another good quarter for us. We start these some things out saying good news and bad news. Unfortunately, we haven't seen any bad news yet. It's been mostly good news. So I think the most exciting thing is that we are now drilling in both Namibia and Nigeria. So we don't have a lot of results from that drilling to report yet, but the fact that it's taken us some time to get off and drilling, and we are now drilling, I think is a very, very good achievement. Obviously Venus-12 is not only being invested by our shareholders, but by the whole world. And I think it's probably one of the top wells being drilled in the world this year. So I think that's getting a lot of buzz around it.

If people are calling in to try to find if we are going to give any updates on this that isn't in public domain, I'm afraid we may have to disappoint you that's more for the operator and our partner to do them than ourselves. We'll certainly talk about what we can and then tell you why we're so interested. The OML-130 drilling infill program is something we've been working on for a long time to get up and running. It took us about a year longer than we wanted, but it's now up and going. And we're hoping to see by the end of the next quarter see some results of that campaign. From a financial standpoint, we did declare and pay our dividend last quarter. So this means that in just over a year we've returned more than $80 million to shareholders through dividends and share buybacks.

And we will be looking to continue that share buyback going forward blackout permitted – blackout periods from Venus drilling permitted. So as far as the – where our balance sheet is, again, we're almost zero debt, our consolidated net debt of only $3.5 million. When you look at the cash we have in the bank of $158 million versus the net debt position we've got at Prime of $161 million, so again very good standing on the balance sheet.

And then we are – of course the main difference between our money in the bank the last quarter and this quarter is we have invested another $31 million in the Impact drilling program. We're going to be paying that in two trenches, and we'll ultimately increase our interest slightly to 31.1%.

Again, Venus is probably the most exciting well I have ever drilled. And I think if you read all of the things coming in from Upstream magazine Orange Basin probably stands just behind Guyana as probably the highest exploration play on earth.

Again, I will leave it to the operator and to our, partner Impact, to disclose any details. I'll only talk about what's already in the press today. I think one of our biggest promoters is Patrick Pouyanné of – the CEO of Total who has called Vista golden block, kind of referencing to their golden block in Angola. And I think everybody is very excited about this block. I think you don't find prospects this size very often. So we are doing an appraisal well 12 kilometers to the north, and we hope to see the results of that within the next 30 to 60 days. That's being drill by the Tungsten Explorer. We’ve got a second rig coming the DeepSea Mira, well, it should be in Namibia in the next few days, and it will undertake a testing program. Think it's still be determined whether that test would be on the original well, or this appraisal well, the 1A. I think that's one of the critical missing pieces is a test rig.

You may have seen an upstream magazine there is some reports from the nearby shale graph, well that the test rates there were quite high and we are hopeful from looking at the rigs more engineering standpoint that we see some high tests on [indiscernible]. So I think that's something we need to confirm. The Tungsten Explorer will move over to the Nara-1 well, when they've completed operations in the Venus drilling program. And that is the large westerly extension of Venus, which I think, will also be a very big catalyst and a very important well for us to understand how this accumulation is developing.

In Nigeria, again it took us about a year longer than we were hoping to get our rig on the station, but we've got it on there now, and they are doing a drilling program of up to nine wells on Egina and Akpo. It's a combination of production wells and injection wells. And by next quarter, we should be able to report where we are on the drilling of those, as well as what the results of those are on the daily production. So we're also shooting a 4D seismic program over Egina to get a better idea of how we've been draining the reservoir so far to guide us in future production wells.

But, so far the guidance looks good within – I would say within the upper range – upper part of the guidance range, and we are quite confident that if the wells that we're drilling at Egina come in as expected we'll be able to stay within that guidance or possibly on the upper end of that guidance.

We still are working on Pray Away. I think people – I have seen questions already about people asking about the license extension. I think Pray Away it's important to get the license extension, but we are moving forward on that as we speak. So you may have seen reports in the press that most of the issues surrounding the extension have been agreed which appears to be the case. But I think obviously working in Africa or say working anywhere in the oil industry until we have everything buttoned up, we're not in a position to say where we are on that license extension part. I think we're confident that there is a very high chance that's going be done possibly even before the end of this month.

Again, on guidance, in the first quarter we are in the upper end of that range. And I think we're feeling pretty comfortable that both on the working interest and entitlement production, we will be able to stay there. It will require some of the wells that we're drilling Egina to help us stay in the upper end of the range. But I think particularly Agbami is performing very well this year. So I think we're fairly confident that we're going to go be to deliver as we stated.

So I'll turn over to Pascal now and let him go through our oil sales. I, we've had a fairly revolutionary change since we put our treating mechanism in place. So, I'll turn over to you, Pascal.

[Pascal Nicodeme, Chief Financial Officer]

Thank you, Keith. I think it's been another good quarter in terms of average sales price. So, this quarter we sold on average $81.5 per barrel, which is almost equal to the Brent average for the quarter. And as Keith said, I mean, in the last three quarters, we've seen a significant improvement in the sales price we were getting, thanks to the new marketing strategy. But before Q2 2022, we were basically selling all our oil forward a few months before the actual [indiscernible] date. So when the old price was increasing, of course, the crude price we were securing was much lower than the actual Brent price. So, which has changed since Q2 2022, as you can see on this chart, the improvement is quite dramatic. We are now selling consistently ask Brent or oil Brent thanks to the quality premium on the original.

So post period we also sold two cargoes at $89 per barrel on average. And one more cargo is due to the sales of Q2. And going forward in the second half of the year, we have six cargos planned for uptake, which are not sold yet, but they have this average trigger price of $66 per balance. So unless the actual spot price goes below the triggers these barrels will be sold spot.

So, next slide is on the capital expenditures. We've incurred $10 million of capital expenditures last year, mainly at prime level of course, and we have a guidance between $80 million to $100 million for 2023, which reflects the activity we are incurring in prime at the moment, this campaign. And this is to be compared to $24 million last year so a pretty busy year in terms of capital expenditures, which is good news.

So in terms of financials of course you will see this red bar in Q4 2022, which were the actual impairment we took. On Kenya, we had one-off impairments around $70 million on our Kenya asset. Prime has also book an impairment due to the – hedging our reserve of $14 million last year. So normal quarter it is positive. We have $22 million net income which is comparable to the other quarter without impairments. And of course, the main contributor for this quarter profit is our share of profit coming from Prime, which was $37.5 million. And we are ending up the quarter with a very strong balance – very strong cash on balance sheet around $58 million.

In terms of performance at Prime, it's been effective, slower production and overall price secure. But we still have very strong EBITDAX and cash flow EBITDAX had $113 million for the quarter and almost $60 million of cash flow from operations. Prime has ended the quarter with almost $200 million of cash on the balance sheet, net worth, and $360 million of debt, net worth as well. So translating this into net debt position I think it's important to see how this has improved over the past since we completed the acquisition of Prime June, 2021, where at that time you will remember that we had $2 million Prime at level plus Prime since we've booked $300 million at Prime level. But we have continued to repay consistency of the Agbami facility, and we are now since Q2 2022 at almost zero consolidation net position, i.e. 50% of Prime plus cash on the balance sheet. So that's very good news. And of course, we are waiting for this license to be extended in Nigeria in order to complete the refinancing both the Prime, PIA and also the corporate facility we have at [indiscernible]. Keith, how about you?

[Keith Hill, President and Chief Executive Officer]

Yes, I think in combination with this, I think we are quite proud of the significant decrease in flaring, we've had. I think if you look at this chart, maybe concentrate a little bit on the dark blue bars for a moment or look dark gray on the side that's the Agbami Field. So you can see when before we bought, it was flaring almost 100 million cubic feet a day. Since we bought it, we've actually been very vocal with the operator trying to bring this down. I think we're finally seeing the results in that. You can see in – between 2021 and 2022, there was a significant decrease, but in 2023, we've cut those flaring volumes at Agbami down to about a quarter of what they were.

So we did have a little flaring at Egina this year. This is not a normal thing that happens. It has to do with some of the LNG off-take requirements and associated with some of the drilling that we've been doing. So we don't expect to be at or near that have recurring thing so always been some troublesome one was at Agbami, I think the operator of Chevron has under control now.

[Shahin Amini, Investor Relations and Commercial Manager]

So I think again, we are a catalyst risk company. The biggest catalyst we've got is Venus, we will be putting results out alongside the operator. I think the timing of those, and the amount of release that still to be determined. But I think we see a very catalyst rich drilling environment in the Venus area this summer with two rigs working full-time as of the end of this month. I think within that, the Nara is really the biggest one of those wells that is the exponentially Western extension of the Venus discovery, which has a chance to really increase the volume significantly successful. We are still looking at doing strategic assets acquiring production assets very specific in what we’re looking for.

We’re looking for producing assets that have current cash flow and we’ll have take advantage what we still think is a very Brent oil market for the next three years to five years. So there still are a number of producing assets on the – that are for sale. We’ve been participating in some of these processes, but we will be careful about making sure we pay the right amount price for those.

But also we compare these acquisitions with returning money to our shareholders, primarily in the form of buybacks. Again, OML 130, I think we’re all feeling quite much more comfortable than we did, I’d say a quarter ago, that we’ve got all the things resolved and having been in this business for some years until we actually have everything finished. I think I don’t make any promises, but I think we’re getting more and more confident that we’ll have something done, hopefully by the end of this month.

And when that happens, then we’ll be able to refinance the RBL and PXF facilities both at the prime level and at the Africa Oil corporate level. And we still are working. We’re working on the farm of Block 3B/4B you also from solid we picked up two new blocks in Equatorial Guinea. We’re out looking for partners on those as well.

So I think our goal is to have a partner secured on both of those blocks by the end of the year with 3B/4B possibly coming first, because there’s obviously a lot of industry interest with everything that’s been going on in the Orange Basin.

So with that, I will leave you to carefully read the reader advisory and the forward-looking statements. And just say thank you again for dialing in to express interest in the company. And I do feel we’re in a very good spot right now, and I think it’s going to be a very interesting summer as we work through not only they Venus drilling the farm outs, but also hopefully get licensed extension, which will free up a lot of cash at the prime level.

[Shahin Amini, Investor Relations and Commercial Manager]

Okay. Thank you, Keith, and now [indiscernible] remind participants and we’re ready for the Q&A session.

[Operator]

Thank you so much. [Operator Instructions] Now, we’re going to take our first question, and the question comes from line of James Hosie from Barclays. Your line is open. Please ask your question.

[James Hosie, Barclays]

Hi there, thanks for the call. I guess let’s start with Namibia. And I was wondering, what would you consider to be a high flow rate for Venus and just what are the capacity constraints in the rig that will limit your testing capacity for that?

[Keith Hill, President and Chief Executive Officer]

Yes, James, I always happy to talk to you. You always seem to be the first one on the line, so I appreciate your eagerness. But yes, I think that getting into that realm of I think that’s something the operator should be talking about as opposed to myself. I mean I think obviously the higher flow rate the better. You’ll see the descriptive thing of flowing like freight train and upstream magazine on the graph well. I think we haven’t seen any hard numbers out of that, but the flow rates will be very instrumental in the economics. But again, I think I would defer to the operator to talk about those the upcoming program and the rigs.

[James Hosie, Barclays]

Okay. So you can’t even comment on what the testing capacity limits are in the rig.

[Keith Hill, President and Chief Executive Officer]

I think that’s my place. I think that’s probably better for…

[James Hosie, Barclays]

Okay. Right. One very much for you guys that is the buyback and just what needs to happen to restart the buyback. I mean, you mentioned blackout periods linked to Venus drilling. I’m just wondering if that means you’re going to have blackout periods almost through the rest of this year with the drilling campaign continuing in Namibia.

[Keith Hill, President and Chief Executive Officer]

Well, we believe – so we’re just coming out of our – obviously our quarterly blackout. We’ve been in blackout for the release of our financials, but we anticipate that we’ll be going back into blackout as we start getting results out of Venus. We believe there will be breaks in that blackout, because the – as well results are announced and as test results are announced, I think there will be the ability to cleanse the market. And we do look at taking advantage of that and trying to recommence the buybacks. We bought about half of the shares back that we can under the 10% program, and we still have significant budget to continue that. But I think we’re being selective of when we do that and we’re being constrained by when we can restart the process with the blackout conditions.

[James Hosie, Barclays]

Okay. Thank you.

[Operator]

Thank you. [Operator Instructions] Now we’re going take our next question. And the question comes from line of Teodor Sveen Nilsen from SB1 Markets. Your line is open. Please ask your question.

[Teodor Sveen Nilsen, SB1 Markets]

Good afternoon, gentlemen. Thanks for taking my questions. I have two questions. First one is just on the 3B/4B farm down process. Did you say that you expected to conclude that during year and what kind of structure will that should expect the farm down to be only carrier or carrier plus cash anymore information there would be useful. And then on the outlook for dividend from Prime, I notice, there hasn’t been any dividend for first quarter. Do you have any kind expectations for the level of dividends received from Prime the next few quarters? My last question that is on potentially new investments in Africa Energy and Eco Atlantic, when do you expect to inject more equity into those entities? Thanks.

[Keith Hill, President and Chief Executive Officer]

Okay. Well, maybe taking them in order the – in reverse order, I would say, the equity requirements of both Africa Energy and Eco Atlantic are fairly small this year. So I think we will be standing in our corner in both of those companies to make sure that they continue on, obviously patients has been required in Africa Energy, but we really like the asset. We think the Brulpadda upper discoveries will be monetized at some point. And I think we want to be part of that process. You may also have heard from the Africa Energy presentations there. We tend still think there’s a lot of expression potential in the eastern part of that block as well, which I think won’t be addressed until we actually find a way to monetize the existing discoveries. But, we do like to block a lot.

So, and of course, Eco, that has not only a nice portfolio that’s with us and 3D 4B, they also have some block in Northern Namibia, which seems to be heating up. There’s a good chance and E&P will be drilling well. There’s shortly, which could change the dynamic up there. And of course, they’ve got blocks either side of the golden trend in Guyana. So I think we’re quite happy to support those companies and move forward with them. As far as the dividend from Prime, I think the – that’s all – a lot of that is tied into the license extension, as you can see from Pascal’s presentation, it’s throwing off a lot of cash. And the real question is, do we use that cash to pay dividends or do we use that cash to pay down debt? Neither one of it is a bad thing, but I think giving dividends is our preference. So I think once license extension is obtained and we refinance the RBL and Prime level we’ll have a lot more cash to free up in dividends. But I think right now we’re kind of keeping cash close to our best to make sure that we can meet our obligations for our debt repayment in the event we don’t get license extension right now. The first one was…

[Pascal Nicodeme, Chief Financial Officer]

It was on 3B/4B line.

[Keith Hill, President and Chief Executive Officer]

Yes. I think, again, the reason I say that may have happened faster than the Equatorial Guinea is just because of all the catalysts that are coming out. So I think with the Shell results kind of partially coming out and hopefully coming out more detail not only in the Graff, but the Jonker now, with our results coming out on Venus, you may have seen the press that Graff contracted rig to come drill to the north of us. So I think this is becoming the hottest space and besides probably Guyana on Earth, and I think from the activity we’ve had in the data room, I think there’s a lot of super majors and mid-size companies that don’t want to be shut out of that process. So I believe we will have a deal to be done in the in 3B/4B. And I think we’re fairly confident, we can close that by the middle, but I’d say the end of the summer.

[Pascal Nicodeme, Chief Financial Officer]

Jim you also has an extension of that question, whether it’s going to be carry only or carry U.S. cash flow, can you comment on that?

[Keith Hill, President and Chief Executive Officer]

We’ll take the best deal we can get. But what we’ve asked partners is to actually essentially pay back our back costs in cash, but more importantly to carry us forward on one to two exploration wells.

[Teodor Sveen Nilsen, SB1 Markets]

Okay. Thank you. Just on 3B/4B again. And how much do you expect from that deal flow to give away the operatorship?

[Keith Hill, President and Chief Executive Officer]

Yes. But again, we’re talking with several different companies that have different objectives. Obviously super majors love to operate and for the right price and the right deal, we would be willing to give up operatorship. I think as far as giving up interest, I think it’s pretty much proportional. We’re not that interested in giving up too much interest. We’ve only got 20%, so I don’t think we would go below 15%. I think our two partners have other criteria particularly re-procure the interest [indiscernible] a bigger number, I think if we add up as a group giving up plus or minus 50% between us I think we stand with that goal.

[Teodor Sveen Nilsen, SB1 Markets]

Understood. Thanks.

[Operator]

Thank you. There are no further questions at this moment over the phone. And I would like now to hand the conference over to Mr. Amini for any written questions.

[Shahin Amini, Investor Relations and Commercial Manager]

Thank you very much, Nadia. Yes, we do have a number of questions through the webcast facility. It is time to turn the session to Pascal. One question is actually kind the general lot of banks are filling out oil and gas space. What are your views and what are the implications for Prime and the current syndicates.

[Pascal Nicodeme, Chief Financial Officer]

[indiscernible] announced that they were reducing their export to oil and gas to focus on the energy transition. The fact is that Prime has successfully refinanced their facility subject to license – of course, and we did the same. And most banks have stayed in the syndicate. Even some banks were announced that they would reduce their exposure. So I think endorse of the quality of the assets of Prime and the business model. And equally for us, we managed to double the size of our Corporate Facility, which [indiscernible] I decided to increase the project to the company. So, I think it’s a matter of selecting the right banks going forward, but there been very stronger appetite, especially from South African Bank under African players of many banks.

[Shahin Amini, Investor Relations and Commercial Manager]

And I think just as a general comment, so we should highlight that Pascal, you were a reserve based lender, yourself for many years.

[Pascal Nicodeme, Chief Financial Officer]

Absolutely.

[Shahin Amini, Investor Relations and Commercial Manager]

So that’s extremely, and it’s been very successful for us [indiscernible]. That was very good to have that. So know crowd and networks. There’s just following from the RBL, there’s also one about we do get license for one, can you make any comments about what the refinancing could look like in terms of concern or any particular features?

[Pascal Nicodeme, Chief Financial Officer]

Yes, the refinancing with safety refinement in the existing oil facility and the banker so also and it was $1 billion at current level, so $500 million network that will be a simple refinancing very similar to the existing month, of course, that maturity date could be five years.

[Shahin Amini, Investor Relations and Commercial Manager]

Okay. And there’s one question impact on you, Pascal to you direct. Well, I know you can’t answer this question. But perhaps you can use it.

[Pascal Nicodeme, Chief Financial Officer]

Thank you for asking me.

[Shahin Amini, Investor Relations and Commercial Manager]

Well, no, because I use that as a launch to just getting reviews about the recent impact fundraising. So the question is the Africa Oil is obviously largely increase its interest, so some shareholders didn’t participate. The question is who didn’t participate? Now, I don’t whether you can answer that.

[Pascal Nicodeme, Chief Financial Officer]

Of course I can’t – any shareholder, but you can imagine that the impact on your shoulder is made of large institutions like ourselves and then other large investors, but it’s also made by individuals who are former managers and so on. So not everyone could stand their corner indeed and integrate. So that’s why we were able to get a few more shares into the equity.

[Shahin Amini, Investor Relations and Commercial Manager]

But more broadly, any comments on the successes of the fundraising and the support from the major shareholders?

[Pascal Nicodeme, Chief Financial Officer]

Yeah, of course the major shareholders, very well, yes.

[Shahin Amini, Investor Relations and Commercial Manager]

Excellent. Keith, we come back to you on some technical questions. There’s a number on 130 infield, which you’ve already touched on. And I suppose people go into a lot of detail, and as you’ve said, some of this we’ve got to the operators total. But in terms of, I mean, we keep talking about 130, any comment ones who started, but then we have act only fields.

[Keith Hill, President and Chief Executive Officer]

Yes. Has actually been producing quite well. It’s been above expectations, and again, what I’m really happy about is the reliability of the facilities has gone up from like mid-80s to mid-90s. So I think has done a very good job of kind of turning around some operational issues they had with it and turning around the flaring, the flaring, like last week there was almost no flare. So, I think that, I think there’s been a few initiatives that they’ve done to help that. But again, we look to be drilling some in wells, we need to shoot some 40 seismic again and see where the oil is being drained before we position those wells. But I think it was – it’s being considered on the budget for late 2024 or early 2025, but we really need to shoot and get the results of that 40 seismic first. Right now, I think we’re quite happy with where its performing.

[Shahin Amini, Investor Relations and Commercial Manager]

And there’s another question on the – we actually get this question on every call, quarterly call about our current thinking on the portfolio companies. And you've kind of addressed that through the question [indiscernible]? But in terms of looking at the optical organization in the past, you’ve mentioned that we may be looking at options with streamline. Do you have any color on that?

[Keith Hill, President and Chief Executive Officer]

The last quarterly call, we talked about the option of maybe spinning out some of the exploration assets into a separate vehicle. But we have other options that we’re considering now. So I don’t think anything has been decided. But I think we do realize that most people have a difficult time trying to value our investment in these portfolio companies. So I think I can say a couple of things. We’re not going to be doing portfolio company investment, again, I think anything we do on exploration going forward will be a direct investment. I think it was a thing that we did at the time because it was the only quick way we could get into some plays we thought were pretty hot. And I think that it actually worked pretty well. We were able to get ourselves into the Venus project. We were able to get ourselves in the 3B/4B project through Eco.

We were able to get into Guyana, unfortunately, we drilled five wells in Guyana. We found two nice accumulations. They turned out to be a little heavier than we would like. But we still think there’s a lot of potential in Guyana. You can’t be right next to 15 billion barrels of oil, especially the same petroleum system and not have process effectivity. So we are working with our partners and with the operators to try to come up with a plan to rejuvenate those two blocks. So – but the points taken and I think, I would say by the end of next quarter, we hope to have a resolution to that, but nothing has been decided, yet.

[Shahin Amini, Investor Relations and Commercial Manager]

Yes. Thank you. Now, here’s a question for you, Keith. This is very close to your heart, your views on short term and long term, well, medium term oil price?

[Keith Hill, President and Chief Executive Officer]

Short term is hard because it’s driven by market sentiment. You can see, when two U.S. banks fell, the market gets into panic and oil price suffers. When you look at inflation rates and people get nervous about demand. It suffers. But those are both little short-term blips in my opinion. You look at the long-term supply/demand function and you look at how long this transition is going to take us. We’re going to be at or around 100 million barrels a day with demand in 2040. There’s just physically no way around it. And right now, it’s very hard to envision that we’ve got the supply to meet that demand. The shale industry in the United States is really falling off. The big boys are still playing in the Permian, but a lot of the production of the littler guys since you can’t finance it anymore. And it’s – I mean, some of these basins are cutting old and tired.

So I have still the ultimate oil goal. I think in the next five to 10 years, we’re in good – very good runway. I think in the next three to five years, there’s zero chance we can’t be a $100 oil crude significant amounts of time. So that’s why we’re still looking at producing assets. We actually see this little downturn right now as kind of an opportunity to go buy things, because some of the prices that we looked at last year when oil ran up to $128 after the Russian invasion of Ukraine, those aren’t there anymore. So maybe people’s expectations aren’t quite so high. So haven’t changed, I’m still the most optimistic guy in the room when it comes to the oil price and the longevity in the oil market.

[Shahin Amini, Investor Relations and Commercial Manager]

Okay. What is the geologist’s perspective? We have a thank you in perspective of that scale.

[Keith Hill, President and Chief Executive Officer]

I think, we need to prepare of course for difficult scenarios. I think we are well equipped going forward. So whatever the actual realization on the other criteria in Canada [ph], we will be in a good position. So I’m not concerned about the future [indiscernible].

[Shahin Amini, Investor Relations and Commercial Manager]

Very good. One question back to Venus. And Keith, do you still expect to see some impact after the – this current campaign in 2023?

[Pascal Nicodeme, Chief Financial Officer]

Well, I think, again, I think that's an Impact question, but I think Impact's been very forthcoming with the market that, that they are keen to move forward with those sale at some point when they think they realize enough value. So I think the timing and the process will lead to impact the comment that we do – we do see that keeping up with a multi-billion-dollar deep water development might be hard for people the size with Africa Oil and Impact. So we've had good examples in the past. I think Kenya was one example where we maybe stayed a little longer than we should. And Ken [ph] if a good offer comes up, I think, we would be supportive of Impact selling sooner than later.

[Shahin Amini, Investor Relations and Commercial Manager]

Okay Pascal, you have any comments on that question or?

[Pascal Nicodeme, Chief Financial Officer]

No, nothing.

[Shahin Amini, Investor Relations and Commercial Manager]

That's good. Very good. And there are a bunch of questions on Kenya. Anything you can say?

[Keith Hill, President and Chief Executive Officer]

No. I mean we're still working hard to get a partner. We had a little setback, which are one of the two partners that we thought we were pretty close, but pulled out. But the operator Tullow is very actively engaged in replacing that. We still think it's a great project. We still think it's going to solve a lot of energy, supply problems for Kenya and East Africa. So, I think it is a challenging project. We've been here for 13 years and we still think it's a good project.

So, I can tell you Rahul Dhir is here as CEO of Tullow is very focused on getting a solution to this project to bring it to monetization. And it's really all about getting a strategic partner. Until we have a strategic partner we really can't move forward. So that's the real focus. But we are doing things in the background. We've done a lot of work on the land, water, fiscal regimes, all of those things, I think, we're making progress on, but until we get a strategic partner lined up, I'm not sure that we can move forward on.

[Shahin Amini, Investor Relations and Commercial Manager]

Okay, Keith. Thank you for that. Right, here is a question. I – all due respect to the President who [indiscernible], the question is, when you are going to get more producing assets taking a long time, I actually think that question should be changed? Are you going to get the right producing assets, because that is quite important? We've been very disciplined looking at the opportunities after?

[Keith Hill, President and Chief Executive Officer]

Yes. I think that's exactly right. I mean, there are things we could have bought, but I think we would have paid too much money for them. I think there is not that much competition, but there is competition, there is people, we are focused pretty much on West Africa and pretty much offshore. I think there are other people out there that are focusing on the same thing. So I think our opportunities will come.

I think we've come very close on a couple of opportunities, but we're not going to overpay. I said before we are always going to look and see if buying our own shares is a better bargain than buying and producing asset. So trust me, this is laser-focused to, I think it's in our information circular, how much of our compensation is focused on getting – going out and buying a new asset and buying things. So the board and the management are very focused on this, but we're not going to go out and just buy the wrong thing just to grow production wells for its own sake.

[Shahin Amini, Investor Relations and Commercial Manager]

Yes. And Pascal, there is a question on and the genome [indiscernible] differentials, and what was it before. I think some might say kind of getting on disaster, because that is [indiscernible] right? And I don't know if you have any views on that. My understanding is Egina is still doing well. It's kind of at a premium and at or in line with brands. Do you think in terms of long-term, those are the right assumptions if people are looking to update the models?

[Keith Hill, President and Chief Executive Officer]

Yes, I think we've seen a significant improvement in the, in the premium for Egina and there's a lot of every table in the market for Egina. Which is good. So I think we can expect it at the premiums with this table going forward. And yes always the historically has been around on grants on that. So but yes, I'm expecting the agent that premium to continue in general terms.

[Pascal Nicodeme, Chief Financial Officer]

Yes, I think we have also called the last of those phenomenal.

[Keith Hill, President and Chief Executive Officer]

Yes.

[Pascal Nicodeme, Chief Financial Officer]

It was about $10 to $11 historical rights but that was kind of shouldn't see that as I don't know.

[Keith Hill, President and Chief Executive Officer]

We've seen a big range on Egina, I mean as low as two but as high as 11. On averaging that four to five, I would say.

[Pascal Nicodeme, Chief Financial Officer]

Yes. And the reason on the on the chart as I'm showing on the RTS [indiscernible] class, the reason why in Q2, sorry, in Q3 and Q4 last year we were able to secure an average old class larger than the other grant, is because of the…

[Shahin Amini, Investor Relations and Commercial Manager]

When I watch hard to notice. There's one comment that it would be good to have a video for the Q&A session and my response, personal response is I'm putting in a lot of ways and I'm losing her. It was not to me. There would be no video feed this presentation, but we'll bear that in mind. Maybe for future events we can have this have, have a video of feel of the Pascal and Keith as well. And this is a good question, would – consider acquiring all of impacts?

[Keith Hill, President and Chief Executive Officer]

No camera.

[Shahin Amini, Investor Relations and Commercial Manager]

Okay. Here's a question about our share structure saying, well, your number of issues and [indiscernible] issues has actually gone up is because insiders are increasing their holdings. And I suppose with the PSU most well all of the directors, again best of my understanding and executive team have decided to basically take a stock. So you have the option of taking casual stock, but everyone's wants the equity offside, right?

[Pascal Nicodeme, Chief Financial Officer]

Yeah, I would say in general the appetite for equity upside is much greater than just taking cash. There is a tax consequence of getting these. So I think I would say the normal thing that people do is exercise enough of the options that they can pay their tax bill. But I think, in my particular case, I've been trying to get as many shares as I can, but if you look at my holdings over the last three years, you'll see a free market increase.

[Shahin Amini, Investor Relations and Commercial Manager]

Very good. I look there's, there's other questions I'm seeing here and there's quite a few of them are just repetitions of others. And so I'm I think this is a good time, good point to wrap this up. I don't know Keith if you have any final comments, Pascal?

[Keith Hill, President and Chief Executive Officer]

No, I can – Obviously there's going to be a very exciting summer. These are, these are some of the best wells we've ever drilled in Venus and I'm feeling pretty good that we're going to get some farm outs done and we're going to get license, license extension and that's going to free up a lot of cash to pay dividends to us and hopefully ultimately end up in the shareholders pockets through either buyback or increase dividends due to other projects that may get into it.

So I think we're in a very good shape and I do think I'm still bullish about our market and I realize the transmission is moving forward, but we are part of that if you look at our metrics, we are one of the best performing oil companies in terms of transition metrics, but we're also very dedicated to a net zero and a carbon neutral strategy moving forward, so.

[Shahin Amini, Investor Relations and Commercial Manager]

Pascal?

[Pascal Nicodeme, Chief Financial Officer]

So nothing more I just think that's going out 2023 will be very effective to us looking forward to.

[Shahin Amini, Investor Relations and Commercial Manager]

It is. Well, I'm very excited. That's for sure. Well, thank you both and Nadia, over to you to wrap this session up.

[Operator]

Thank you so much. That does conclude our conference for today. Thank you for participating. You may now all disconnect. Dear speakers, please stand by.