Africa Oil Corp

TSX:AOI

Earnings Call Transcript 2021-Q4

[Operator]

Hello,

everyone.

My

name

is

Melinda.

I

will

be

your

conference

operator

today.

At

this

time,

I'd

like

to

welcome

everyone

to

the

Africa

Oil

Fourth

Quarter

2021

Results

Call

and

Webcast.

All

lines

have

been

placed

on

mute

to

prevent

any

background

noise.

After

the

speakers'

remarks,

there

will

be

a

question-and-answer

session.

[Operator Instructions]



Please

note

at

any

time,

participants

on

the

website

can

submit

their

questions

using

the

Q&A

option

on

the

webcast

interface.

Please

note

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]

Thank

you,

Melinda.

On behalf

of management,

I

thank you

for

joining

us

today

for

our

fourth

quarter

2021

results

call.

I'm

joined

today

by

our

President

and

CEO,

Keith

Hill;

our

Chief

Financial

Officer,

Mr.

Pascal

Nicodème;

and

they

will

both

present

the

quarter's

highlights

and

the

business

outlook

before

we

got

into

a

question-and-answer

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

of 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

SEDAR.

I

will

now

hand

you

over

to

our

CEO,

Keith.

Keith,

please

go

ahead.

[Keith Charles Hill]

Thanks, everybody,

for

joining

us.

Obviously,

we

were

slightly

surprised

with

the

opening

of

the market

today,

but

all

the

people

calling

in,

obviously

saying we've

got

a

great

buying

opportunity

ahead of

us.

I

think

we

actually

were

quite

pleased to

announce

the

results,

and

I

think

we've

actually

made

pretty

good

progress

on

all

the

fronts

that

we've

been

talking

about

for

some

time.

I

think starting

with

the

financials,

we

had

a

record

full

year

net

income

of

almost

$300

million

(sic) [almost $200 million] (00:02:42) or

$0.40

a

share.

We've

made

a

huge

amount

of

progress

on

our

net

debt

reduction

initiatives

where

we

ended

debt

free

and

with

cash

of

$60

million

at

the

AOI

level.

But

we've

also

reduced

Prime's

debt

significantly,

so

we're

down

to

a

debt

to

EBITDAX

ratio

of

0.4

times.

And

again,

we've

announced

our

share

dividend,

our

first

implementation

of

our

shareholder

return

program

which

seems

to

be

maybe

some

of

the

cause of

consolidation

among

some

of

the

investors,

and

we'll

have

a

good, wholesome

talk

about

that.

Again,

from

a

debt

standpoint,

we

refinanced

our

debt

that

we

have

taken

on

to

do

the Prime

acquisition,

much

lower

cost

with an

extended

term.

So,

right

now,

we

have

an

undrawn $100

million

facility

which

we

can

use

till

the

end

of

the

year,

and it

gives

us

some

liquidity

headroom. Also,

I

think

we

find

it

very

good

in

today's

environment

that

we've

got

very

good

support

from

our

banks

and

from

oil

traders

to

move

not

only

this

project

forward,

but

looking

forward

to

other

projects

we

may

do.

Perhaps

the

biggest

announcements

we

did,

and

I

think

for

a

lot

of

the

movement

in

our

share

price

last

week,

was

we've

opened

a

new

basin

in

the

Orange

Basin

with

the

Venus

discovery.

Early

days yet

on

Venus,

but

it

looks

to

be

a

very

major

discovery,

that

not

only

are

we

positioned

well

at

this

block,

but

we

have

other

blocks

in

the

region

that

could

benefit

from

this

as

well.

So,

quite

happy

with

the

results

of

that

well.

I

think

we

had

two

big

risks

going

in;

did

we

have

good

quality

reservoirs

and

was

it

oil

or

gas?

And

we

proved

that we

have a

very

good

reservoir

section

and

we

had

–

and

it's

light

oil,

not

gas.

So,

I

think

we'll

talk

a

little

bit

more

about

that,

but

I

think

that's one

of

our

real

highlights

for

the

quarter.

And

again,

production-wise,

Nigeria

seems

to

be

just

rolling

along.

We've

hit

the

top

end

of

our

guidance,

both

in

working

interest

and

entitlement

interest.

And

we've

had,

for

the

second

year

in

a

row,

over

100%

reserve

replacement.

Essentially, we've

had

the

same

reserves

in

these

fields

as the day

we

bought

them

two

years

ago.

So,

I

think

if

you

look

at

the

true

measure

of

performance

of

Nigeria,

as

we

keep

saying,

it's

the gift

that

keeps

on

giving.

The

orange

line

you

see

is

our

dividends,

and

you

can

see we've

had

a

very

good,

steady

dividend

yield, $400

million

since

we

bought

the

field

almost

two

years

ago.

But

also

want

to

take,

pay

some

attention

to

that

gray

bar

as

well.

So,

compared

to

the

slightly

under

$100

million

we

had

when

we

bought

the company

in

the

bank

there,

we

now

have

an

additional

$189

million.

So, if

you

take into

account

that,

we've

actually

– you add

that

to

what

we

receive,

the

dividends

would

more

than

pay

for

our

acquisition

cost

in

less

than

two

years.

So, again,

I

think

this has

been

a

really

good

acquisition

for

us

and

I

think

it's,

again,

going

to

be

our

core

producing

project

moving

forward, with

no

signs

of

waning.

Again,

I

think

much

of

the

chat

we've

seen

since

we

announced our

dividend

policy

today

was

that

perhaps

it's

a

little

on

the

low

side

at

2.5%,

so

I

guess

I

want

to make

a

few

comments

on

that.

Number

one,

we

actually

decided

on

this

dividend

amount

back

in

December,

and

it

was

about

a

4.5%

dividend

at

that

time.

So,

fortunately

for

us,

our

share

price

has

gone

up

55%

since

the

beginning of

the

year,

so

it

actually

looks

like

a

smaller

dividend even

though

the

actual

amount

of

the dividend

was

the

same. But

I

think

the

second

comment

I'll

make

is

we

see

this

as

kind

of

a

baseline

dividend,

this

$0.05

a

share.

Obviously,

as

we

talked

about,

we've got

a

lot

of

money

tied

up

still

in

Nigeria,

both

in

cash

on

the

balance

sheet

but

also,

we

have

a

$305

million

securitization

agreement

payment

that's sitting

in

the

bank

there.

We

hope

to

liberate

quite

a

bit

of

that

cash

out

of

Nigeria

the

second

half

of

this

year.

So,

we'll

be

looking

at

that

dividend

policy,

and

I

think

there's

a

good

chance

we

will

be looking

to

increase

that

as

more

free

cash

comes

through.

But

I

think

the

other,

the

last

point

I

want

to make

is

that

this

is

a

decision

to pay a

dividend,

but

it

is

not

a

decision

to

stop

growing

the

company.

We

do

purposely

keep

some

of

our

cash

back

because

we

do

still

feel

that

even

in

this

$100

oil

environment,

there

are

some

really

good acquisitions

out

there,

and

we

are

involved

in

that

and

evaluating

and

even bidding

out

some

of

those

now.

So,

I

think

we

want

to keep

our

powder

dry

to

do

some

accretive

acquisitions,

primarily

production,

primarily

West

Africa,

primarily

[ph]



oil majors (00:07:50). And

obviously,

we

would

like

to

raise

as

little

equity

as

possible,

so

keeping

cash

on

the

balance

sheet,

combined

with

the

traditional

debt,

combined

with

some

trade

financing,

I

think

we

can probably

buy

things

without

having

to

go

back

into

the

equity

market.

Again,

first

dividend

maybe

slightly

lower

than

some

people

might

like,

but

I

think

we

thought

it

was

important

to

show

the

market

we

have

that

capital

discipline,

that

we

will

start

returning

cash

to

shareholders,

and

we

would

hope

to

see

that

dividend

grow

throughout

the

year

as

we

particularly

start

freeing-up

some cash

from

Nigeria.

So,

the promises

we

made

last

time,

last

year

this

time

was

our

first

promise

was

de-leveraging,

and

I

think

we've

definitely

done

that.

I

think

we've

not

only

cut

our

debt

down

to

zero

at

the

AOC

level, but

we've

cut

the

RBL

debt

down to

about

$0.8

billion. So,

we've

paid

down

just

about

$1

billion

[indiscernible]



(00:08:55)

over

the

past

two

years.

I

haven't

closed

on

a

new

acquisition

opportunity.

I've

tried

on

a

few

and,

as

we

said,

we still

got

a few

more.

I think

that's

a

real

goal

for

us

for

rest

of

this

year,

is

to

do an

accretive,

find

other

Nigeria-type

acquisition.

And

I

do

think

they're

out there. I

think

there's more

sellers

than

buyers,

and

I

do

think

it's

still

a

buyer's

market

out

there

even

at

$100 oil.

We

may

have

to

craft

our

bid

a

little

more

intelligently

and

maybe

a

little

upside

back

to

the

seller.

I

do

think

we

can

still

make

deals

at

[ph]



$50 (00:09:27)

oil

price

and

still

have a

possibility of

closing.

And

again,

we

have

instituted

our

shareholder

return

program. I

think

we

see

this

as

kind

of

first

step.

We

look

to

increase

that

or

even

potentially

look

at

share

buybacks

in

the

future.

Again, just

to

show

the

entitlement

production,

working

interest

production

for

this

year.

Again,

strong

performance. We're at

the

upper

end

of

the

range

both in

working interest

production and

entitlement

production.

We

are

also

well

over

the

top

of

the

range

on

our

free

cash

flow

from operations.

The

big orange, darker orange bar you

see

on

the

left, that's the

securitization

payment

we

got

from

Equinor

on

the

redetermination

of Block OML 127.

So,

again,

that

money

is

a

little

bit

locked

up

right

now.

We

still

have

to

have

some

discussions

with

our

friends

at Petrobras, but

we

hope

to

unlock

that

money

by

the

middle

of

the

year

and

have

it

available

for

dividend.

So,

again,

we

were

above

our

guidance

on

2021.

We

expect

an

equally

strong

guidance

on

cash

flow

from

operations

in

2022

– or

2023.

So,

CapEx,

we're

slightly

below,

and

we

have

been

kind

of

putting

CapEx

back

for

the

last

couple

of

years.

I

think

you'll

see

when

we

go

to the

next

slide,

we

are

going

to start

spending

some of

that

CapEx,

doing

deals,

doing

some

care

and

maintenance,

and

we

will get

back

to

drilling

some

wells.

In Egina,

we

will

be

getting

back

to

drilling

some

wells on

some

of

the

satellite

fields.

And

even in Agbami,

we'll

be

looking

to

drill

some wells

either late

next

year

or

early

the

following year.

So,

I

think

again,

these

fields

are

great

fields,

but

they

do

need

a

little

bit

of investment

to

keep

them

going at the level they are.

So,

our

guidance

for

next

year,

working

interest

production,

we

have

a

range

from

22,500 to 25,500 boe/d;

entitlement

production

from

23,000

to

27,000 boe/d.

That's

slightly

down

from

this

year

as

we

saw

some

of

the

fields

decline.

But

again,

I

think

with

the

capital

investment,

we're

hoping

to

kind of arrest

that

decline

or even in

some

fields

actually

raise

that.

Cash

flow,

again,

similar

to

last

year.

If

you

take

out

that

securitization

payment, we'll have

roughly

the

same cash

flow as

last

year.

And

I think

our

CapEx

will

go

up

a

bit

next

year,

and

we

still have

a

pretty

strong

debt

repayment

program

that

we

will

see

coming

this

year.

That is

one

thing

we

hope

to

put

off

by

doing

a

license

renewal,

a

really nice

license

renewal

especially

on OML

130.

And

if

possible,

we'd

like

to

get

our

debt

redone

once that

license

is

renewed

and

essentially

push all

of

this net debt

repayment

into

the

future.

So,

again,

fairly

modest

budget

for

the

company;

a

little

bit

of

money

in

Kenya,

which

we'll

talk

about.

But

we

try

to

keep

a

fairly

low

G&A

profile,

and

we

do

see

a

bit

of

equity

investment in

some

of

our

companies,

particularly

following up

on

the Venus

discovery.

So,

again,

the

financial

highlights.

At

this point,

I'll turn it

over

to

Pascal, let him walk

through

the

next

few

slides.

[Pascal Nicodème, Chief Financial Officer, Africa Oil Corp.]

Thank

you,

Keith. No,

as

Keith just

mentioned,

I

think

it

was

a

record

year

last

year.

We

posted

$190 million

for

annual

net

income

which

is

a

great

achievement

with,

on

average,

more

than

$45

million

of

net

income

on

a

quarterly

basis. I think

the

main

achievement

last

year

has

been that we

fully

repaid

our

debt.

So,

the

acquisition

that

we

signed

when

we

did

this

Prime

acquisition

has

been

fully

repaid.

We

end

the

year

with

almost

$60

million

of

cash

balance.

Of

course,

all

these

figures

are

underpinned

by

very

strong

performance

at

Prime

level

on

a

production

and

price

basis

thanks

to our hedging policy.

And

we

booked

in

the

fourth

quarter

of

2021

profit

from

investment

in

Prime

of

$56

million.

Thank

you.

And,

yeah,

as

I

said,

so

very

strong

performance

from

Prime,

not even taking into

account the

security

deposit

that

we

received

in

June

last

year

which

is

basically

more

than

$150

million

net

to

our

share

in

Prime.

Prime

has

continued

to

deliver

in

terms

of

EBITDAX.

On

a

12-month

basis net to AOC, it's

more

than

$600 million

EBITDAX.

They've

continued

to

repay

their RBL

facility

which

is

below

$1

billion

now,

and

they

end

2021

with

a

cash

balance

of

more

than $500

million.

And

[indiscernible]



(00:14:39)

I

think

the

main

achievement

has

been,

as

I

mentioned,

the

full

repayment

of

our debt

facility.

And

on

top

of

that,

we

managed

to

increase

the

availability under

our

corporate

facility

up

to

$100 million

which

is

available

for

general

corporate

purposes,

including

acquisition,

so

we

are

really

keeping

this

line

as a

standby

line

to

be

able

to

fund

future

acquisitions.

And

at

very

competitive

terms,

we

basically

secure

that

standby line

with

our

existing

syndicate of

banks,

five

banks

which

hopefully

are

going

to

support

us

going

forward

in

our

acquisitions.

[Keith Charles Hill]

So,

if we can move

on

to

something

a

little

bit

more

exciting

now,

exploration

which

of

course

everyone

knows

is

underpinning

the

core

of

my

heart.

I

think

we've

had

an

active

exploration

program

for

the

past

few

years,

mostly

through

our

portfolio

companies.

And

we've

had

a

couple

of

nice

discoveries.

I

mean,

I

think

the Leopard

[indiscernible]



(00:15:47)

discoveries

and 11B/12B

were

phenomenal

discoveries,

and

I

think

our

friends

at

Africa Energy

are

working

to

move

those

forward.

I

think we

had

a

couple

of

discoveries

in

Guyana that

are

pretty

good, and

then

they

turned

out

to

be

a

little

bit

heavy and

sulfur-rich.

But

we

still

think Guyana

and Suriname

is

a

great

place

to

look for

hydrocarbons.

Obviously, it's

the

best

place

people

have

had

in

the

last

two

decades

to

find

oil

and

gas,

so

we

still have

a

position

there and

our

sister

company,

Eco

Atlantic,

is

working on

improving

that

position.

But

the big

one

of

course

is

Venus

where

we

finally

drilled

our

well

there,

and

looks

like

we've

made

a

real

world-class

discovery.

So,

again,

it's

a

huge

structure;

the

whole

structure

is

about

600

square

kilometers.

The

heart

of

the vein

itself

is

about

400

square

kilometers.

The

very

strongest

reflectivity

right

in

the

middle

is

about

150 square

kilometers,

so

it's

a

beautiful

discovery.

Again,

the

two

risks

we

had

was

was

it

gas

or

oil,

and

it's

now

confirmed

to

be

light

oil

with

associated

gas.

And

the

reservoir

quality

is

much

better

than

we

expected.

Not

only

is

it

about

twice

as

thick

as

we

expected,

but

it's actually

better

quality

than we expected.

So,

I

think

the

–

we

only

have

a

6.2%

indirect

interest

on

this,

but

we're

not

in

a

position

to

talk

about

resources.

We'll

leave

that

for

the

operator

and

for

Impact

to

do.

But

obviously,

you've

all probably

seen

some

pretty

big

numbers

being

bandied

about

in

the

press,

and

I

think that our

feeling is

those

are

not

unreasonable

numbers

per

what

we've

seen

so

far.

But I

think

for

what

–

what

we

like

about

it

is

there's also,

right

next

to

us, 40

kilometers

away, the

Graff

discovery

by

Shell.

So,

again,

they

found

what

we

think

is

a

very

large

oil

field.

And

kind

of to

underpin

that,

they

actually

took

a

rig,

resupplied

it,

and

brought

it

back.

And

they're

drilling

an

appraisal

well

which

is

8

kilometers

away

from

the

discovery

well,

so

that

gives

you

a

bit

of

an

idea

on

how

big

this

thing

could

be.

We

also

have

quite

a

nice

block

called

3B/4B

which

Africa

Oil

is

actually

the

operator

and

our

partner, Eco

Atlantic,

has

a

20%

working

interest.

We

see

a

lot

of

the

same

type

of

things

on that

that

they

saw

at

the –

in

the

Graff

discovery.

I

do

think

it's

interesting.

If

you

look

at

that little

inset

map down

on the

bottom

left,

that's

actually the

Guyana-Suriname

basin

at

the

same

scale

as

the

Orange

Basin.

I

think

it

kind of

shows you

just

how

big

the

Orange

Basin

is.

You

can

fit

the

entire Guyana and

Suriname

[indiscernible]



(00:18:25)

inside

of

Block

3B/4B.

So,

how

do

we

de-risk

this

delta?

This

is

one

of

the

big

five

deltas

of

West

Africa

and

the

only

one

that

really

hasn't

been

explored

yet.

And I

think

now,

we're

seeing

that

it's

got

a

huge

potential

now

that we

confirmed

the

petroleum

system.

You

also

see

on

that

there's

a

block

in

the

far

right,

Block

2B

which

is

again

an Africa

Oil

– sorry,

Africa

Energy,

and

an

Eco

block.

Eco

has

just

recently

taken

over

a

company

called Azinam,

so they

have

50%

interest

in

the operator.

And

of

course,

Africa

Oil

has

the

– sorry,

Africa

Energy

has

a

13%

working

interest,

so

we

have

a

very

good

interest

in

this.

We

will

be

drilling

a

well

there and

hopefully

spudding

in

the

third

quarter.

And

this

is

not

related

to

the

Venus

discovery

or

Graff

discovery;

this

is

actually

a

rift

basin

which

actually

looks

a

lot

more

like Kenya.

And

it

already

has

a

well

that's

proven

a petroleum

system

there

so,

again,

we're

quite

keen

on

that

well.

And

I

think

it's

not

as

big

as

some

of

the stuff

offshore,

but it

has

great

economics

[indiscernible]



(00:19:36) and

shallow

water

with

good

terms.

So,

again,

we

still

remain

very

keen

on

exploration and

I

think

you'll

see

us

following-up

our

investment

in

Venus

and

staying

on

that,

so

I

think we're quite keen on

that.

All right,

on

Kenya.

Kenya

seems

to

be

the

forgotten

child

here

in

Africa

Oil. I

kind of

don't blame

investors

on

that.

We've

been

[ph]



at this

(00:20:09)

a

long

time.

I

keep

telling

everybody

here,

it's

a

great

project

and

that

we

are

moving

forward

on

this. We

have pretty

good

chance

of

moving

this

forward.

I

can't

blame

people

for not

believing

me

after

all

these

years

of

making those

promises,

but

I

can

tell

you

we

are

quite

engaged

on

this. I

was

in

Kenya

last

week.

We

have

a

couple

of

interested,

very

interested

parties,

and

I

think

the

chances

of

getting a

strategic

partner

we've

been

looking

at

for

the

past

few

years

is

getting

closer

and

closer.

I

can't

make any

promises.

I

can't

disclose who

it

is,

but

I

think

we're

actually

getting

pretty

excited

that

we're

finally

going

to get

over

the hump

on

this and

actually

move

this

project

forward.

So,

again,

the

proof

is

in

the

pudding. If

we

have

a

partner,

we're

hoping

to

announce

sometime

in

the

second

quarter.

But

the

stars,

seem

like

they're

finally

aligning

[ph]



on

this (00:20:59),

and

I

think we've

got

a

good chance

of

actually

putting

some

value

into

the

company

on

this. I

can

tell

you

right

now

there

is

no

value

for

Kenya

in

our

share

prices.

But

if we're

able

to pull

this off,

I

think

this

is going

to

be

worth

[ph]



a

piece

to (00:21:11)

dollar,

probably

more,

shares

to

the

company.

So,

I

think,

when

we

talk

about

Africa

Oil,

you

probably

saw

our

reserve

report.

Right

now,

the

Nigeria

project

[indiscernible]



(00:21:23)

is

worth

about

$1.4

billion,

just

based

on $50

oil.

And

I

think

if

you

take

the

debt

off

that

we

have,

which

does

not

only

cover

net

debt

[indiscernible]



(00:21:35),

you

get

about

$1.2

billion

valuation

just

for

Nigeria

which,

of

course,

is

significantly

above

our

share

price

to-date,

about

$900 million.

So,

I

think,

I

believe

I've

said

this

before,

you

kind

of have

the

ability

to

buy

Africa

Oil

for

Nigeria,

have

a

good

and

stable

investment

which

is

now

our

cash

flow

and

dividend

paying

projects.

But

you get

the

rest

of

this

all

for

free.

So,

not only

our

exploration

portfolio

of companies,

which

[ph]



first now (00:22:11)

there's

probably

a

pretty

big

value

associated

to

our

Venus

discovery.

But

you

also

get

Kenya

for

free.

I

mean

I

think

that's – if I'm

looking

to

buy

Africa

Oil

shares,

I

think

that's

the

way

I

think

about

it. This

business

is

somewhat

of

a

risk-free

investment

on

Nigeria,

and

you

get

all

the

other

stuff

at

no

cost.

And

I

do

think,

obviously,

now

that we

made

the

Venus

discovery,

I

think

you'll

see

us

adding

more

value

in

exploration.

So,

this

is

our

catalysts

that

we

see

in

2020.

So,

obviously,

we're

hoping

that

the

Total

goes

as

quickly

as

possible

[ph]



to

up and (00:22:52) appraise

this

discovery,

so

we

have

a

better

understanding

of

it.

[indiscernible]



(00:22:58)

program

forward

[indiscernible]



(00:22:59).

I

like

to

think

this

could

be

one

that

can

be

developed

very quickly

if

you

take the

[indiscernible]



(00:23:06).

They

were

four

years

from

the

first

discovery

well to

being

on

production.

I

think

that's

what –

we'd

love

to

see

a

similar

type

program

on

Venus.

We're

also

designing

a

well,

which

we'll

have

the

results

over

this

year,

again,

should

be

[ph]



spending (00:23:22)

sometime

in the

third

quarter.

And

then Prime, I think

the

biggest thing

in

Prime

for

us

is

converting

the

license

to

the

new

Petroleum

Investment

Act,

which

comes

automatically

with

28-year

license

renewal.

So,

once

we

do

that,

then

we

can refinance

the

RBL.

All

the money

we've

been

thinking about

paying

back

to

the

banks,

we

can

actually

keep or

use

for

either

distributions

to

shareholders

or

to

buy

assets.

So,

again,

that's

one

of

my

big

focuses

now

is

we're

looking

at

producing

assets.

Again,

I

kind

of would

prefer

to buy

things

in

the

$50

oil

market,

but

I

still

think

because

it's really

a

buyer's

market,

there's

still

a

number

of

good

assets

that

the

majors

are

selling

off

and

again,

I

think

there's

a

lot

more

sellers

than

buyers

[indiscernible]



(00:24:11).

And

then finalizing

Kenya.

I

mean

I

think

Kenya,

most

people think

I

believe

it when

I

see

it

approach,

but

I

can

tell

you

that over

the

last

year,

the

operator

Total –

myself

and our partner Total have

been

working

very

hard

on

getting

the

project

in

shape

and

working

hard

for

a

strategic

investor

to

finally

[indiscernible]



(00:24:32).

So,

that's pretty

much all

I

had

to

say. I'll

let

you

read

the

forward-looking

statements

at

your

leisure

and

I

just

want

to

thank everybody

once

again

for

dialing

in

and

I

think

we're

now

ready

for

questions.

[Shahin Amini]

So,

yes, operator,

[indiscernible]



(00:24:51)

[Operator]

Thank

you.

[Operator Instructions]



And

we

take our

first

question

from

James

Hosie

with

Barclays.

Please

go

ahead,

your

line

is

open.

[James Hosie, Analyst, Barclays Capital Securities Ltd.]

Thanks.

Good

afternoon and

good

morning,

everyone.

Yeah.

I've

just

got a

question

on

your

refinancing

plans

for

Prime.

It

certainly

sounds

like

doing

the

life

extension,

the

prerequisite

to

refinancing

the

RBL.

I

just

wondering

how

you

manage

the

needs for

your

partners

in

those

licensees

to

also

look

to

extend

the

license

and

move

to

new

fiscal

terms?

[Pascal Nicodème, Chief Financial Officer, Africa Oil Corp.]

Yeah.

So,

hi,

James.

We

are

building

[indiscernible]



(00:26:24)

in

relation

to

that

refinancing,

so

I

wouldn't

say

that

the

license

renewal

is

a

prerequisite.

We

are

thinking

about

[ph]



structure

(00:26:36) together

with

Prime

in

order

to

refinance the

RBL

before

license

renewals

and

you

probably

saw

that

we've

closed

last

year

this

pre-exposed

activity

that

already

extends

beyond

the

license

renewal

date;

so,

refinancing

the

RBL

with

other

type

of

debt

is

not

impossible

at

this

stage

and

we've

already

done

it.

So,

I

think

the

purpose

for

this

year

is

really

to

continue

to

reschedule

the

amortization

profile

of

the

RBL and

extended

it

beyond

the

license

renewal

date.

So,

I

think

this

is

a

work

in

progress. I'm

not

saying

we

are

going

to

[ph]



re-fi (00:27:19)

the

full

RBL

in

one

go,

but

at

least

we

are

going

to

continue

to

arrange

this

additional

tranches

and

move

the

debt

repayment

profile

beyond

the

license

renewal

dates.

And

as

far

as the

actual

renewal

is

concerned,

[indiscernible]

(00:27:35)

renewals

about

this,

but

the

operator

[indiscernible]



(00:27:38) are in their

OML 130

and

OML 127

and have

started

the

discussions

[indiscernible]



(00:27:44-00:27:47)

and

of

course,

it's

a

sort

of

win-win

situation

where

as

soon

as

you

extend

[indiscernible]



(00:27:54)

I

think

it's

in

the

interest

of

all

parties

to

get

earlier

renewal

of

the

licenses

and

move

as

soon

as

possible

[indiscernible]

(00:28:05).

[James Hosie, Analyst, Barclays Capital Securities Ltd.]

Okay.

Thanks

[indiscernible]

(00:28:10).

Sorry, go

ahead.

[indiscernible]

[Keith Charles Hill]

(00:28:13)

I

think extension on OML

130

we

see

is

much

easier. I

think OML

127

has

some

complications

with

the

local

partner,

so

I

think

that one

will

be

a

tougher

one.

But

I think,

as

Pascal

said,

I

think

everybody

has

incentive

to

move

forward.

For

us,

the

important

one

is

OML 130 as 80%

of

our

reserves

production

cash

flows

come

out

of OML

130,

so

that's

the

more

important

one

for

us.

[James Hosie, Analyst, Barclays Capital Securities Ltd.]

Okay.

Thank

you.

And

just

want

one

further

question

on

Kenya.

So,

it's

promising

if

you

feel

you

could

have

news

on

the

farmout

in

Q2.

I

was just

wondering

if

we

should

be

expecting

that

farmout

to

evolve

with a

cash

coming

to

Africa

Oil or is it,

essentially,

you're

looking

for

carries

through

the

initial

development

work?

[Keith Charles Hill]

Yeah,

I

think we're

kind

of

agnostic

as

to

whether

it's

cash

or

carry

on.

I

think

– but

the

interested

parties

we've

been

discussing

with

have

offered

both

and,

frankly,

it

doesn't really

matter

to

us

that

much.

I

think

the

dollar

amounts

are

the

important

thing,

whether

it's

paid-up

front

or

whether

it's

on

carries

is

less

important.

[James Hosie, Analyst, Barclays Capital Securities Ltd.]

Okay.

Thanks

very

much.

[Operator]

Next,

we

go to

the

line

of

Nik

Stefanou

with

Ren Cap.

Please

go

ahead,

your

line

is

open.

[Nikolas Stefanou, Analyst, Renaissance Capital Ltd.]

Hi.

It's

Nik

from

Ren Cap.

Thank

you

for

taking

my

questions.

I've

got

three

[indiscernible]



(00:29:39)

PIA

and

one

with

hedging.

Have

you

done

an

internal

exercise

to

see

maybe

what's

the

[ph]



migration (00:29:47) or

kind

of

like

a

free

customer

uplift

you

could

get

if

you

conform

to

PIA

terms.

And

that's

the

first

question

on

that

topic.

And

the second

one

is

I

recall

when

the

bill

was

out,

it

was

supposed

to

be

effective,

so

January

1 last

year,

is

there

a

chance

they

could

make

an

argument

for

kind

of

like

fiscal

terms

actually

going

back

and

then

making

kind

of

like

a tax kind of like claim

on

that

or

it's

kind

of

like

it

would

just

be

effective

as of

when

parties

convert

to

the

new

fiscal

terms.

So,

these

are

the

PIA questions

I

will

ask

follow-up?

Thank

you.

[Keith Charles Hill]

Yeah. So,

we've

done

our

economic

analysis

of

converting

the

PIA

and

we

see

about

10%

to

15%

uplift

in our

NPVs.

Now,

one

of

the

reasons

is,

of

course,

we've

got

[indiscernible]



(00:30:47)

which

is

a

new

discovery

and

it's

still

on

royalty

holiday

and

[indiscernible]



(00:30:56)

a

new

development

which

will

have

royalty

holiday

and all

of

those

are kind

of encapsulated

in

the PIA.

But

there's

a

majority

of

good

points

coming

in

to

the

PIA

which

is

a

change

in

taxes

from

50%

down to

30%.

And I

think

there's

a

number

of

other

positive

things

that are associated

with

PIA.

I

don't believe

there's anything

worth

going

back.

In fact,

once

you

convert

to

the

PIA,

all

past

disputes

are

considered settled.

So,

I

think

that's one

thing

that

in

OML 127, I

think, they're

thinking

about

there

are

some

outstanding

disputes

that

might

have

to

be

settled

before

that

gets

converted

to

PIA.

But

in

general,

we

see

it

as a

very

positive

thing

for

us.

We

see

us

[indiscernible]



(00:31:39)

by

adopting

PIA.

[Nikolas Stefanou, Analyst, Renaissance Capital Ltd.]

Understood.

And then

on

the

hedging,

should

I

think

of

your

policy

as

you

will

sell

forward

at

whatever

the

curve

is,

say

for

[indiscernible]



(00:31:58)

for

the

following

quarter.

So,

for

example,

I

think,

[indiscernible]



(00:32:04)

the

entire

of

the

first

and

second

quarter

then

should

I

expect

following

the

second

quarter,

you

will

sell

forward

your

3Q

and

maybe

some

of

the

4Q

cargoes

at

what

the

[indiscernible]



(00:32:16)

would

be

at

that

point

in

time?

Is

that

how

the

policy

works?

[Keith Charles Hill]

Yeah.

On

the

hedging policy,

which

is

something

that

the

bank

supports

as

part

of

our

RBL,

it's

about

trying

to

maintain

a

little

financial

discipline.

Obviously,

in

the

first

half

of

this

year,

we probably

use

a

little

bit

on

our

hedging.

I

will

tell

you,

in

2020,

we

made $430

million

gains on

our

hedging.

So,

I

think

what

we

see

in

hedging

is

an

instrument

to

kind

of

smooth

out

cash

flows

a

bit

and

that's

also

something

the

banks

want

to

see.

So

the

current

policy

is

we

tend

to

hedge

between

50%

and

60%

of

our

crude

and

the

way

the

market

is

right

now,

you

can't

really

easily

hedge

on

with a

reasonable

price

too

far

out.

So,

we

tend

to

[indiscernible]



(00:33:09).

The

last

the

last

one

we

had

was

at

$88

and

I

think

we're

holding it

dry.

For

the

second

half

of

the

year,

we've

got

four

unhedged

cargoes,

and

given

what's

happened

in

the

world,

I

think

we

may

hold

off

and

try

to

get

a

better

price

for

those.

[Nikolas Stefanou, Analyst, Renaissance Capital Ltd.]

Okay.

Thank

you.

[Operator]

Next,

we

go

to

the

line

of

SpareBank

1

Markets.

Your

line

is

open,

if you'd

like

to

state

your

name

prior

to

asking

your

question,

please.

[Teodor Sveen-Nilsen, Analyst, SpareBank 1 Markets AS]

Yes.

Good

afternoon.

This

is

Teodor

Nilsen,

from

SpareBank

1

Markets.

Thanks

for

taking

my

questions,

and

congrats

on

a nice

2021.

And

three

quick

questions.

The first

one,

that

is not

actually maybe not that quick.

But

on the Venus discovery, I

know

it's

early

days

but

is

it

possible

to

discuss

some

potential

development

solutions

[indiscernible]



(00:34:04)

production

potential?

Second

question

is

on

the

dividend

policy.

[indiscernible]



(00:34:08),

Keith,

you

said

that

you're

looking

for

a

[indiscernible]



(00:34:13) dividend

throughout

the

year

and

then

how

should

we interpret

that?

Will

you

get

dividend

as

a

percentage

of

cash

flow

or

EPS

or

how

should

[indiscernible]



(00:34:24)?

And

last

question

is on

operating

cash

flow

and

guidance

you

provided

for

Prime

[indiscernible]



(00:34:29).

What

is

the

underlying

oil

price

assumptions

or

hedging

assumption

[indiscernible]

(00:34:35)

that

guidance?

Thank

you.

[indiscernible]

[Keith Charles Hill]

(00:34:42)

or

the

easy

one

is

the

forward

curve

on

the

cash

flow

assumptions

for

Prime,

$60 flat,

essentially

a

long-term

price.

And

then,

we

use

the

hedged

values

to

the

short

term.

So,

whatever

we've

hedged

plus

basically

[indiscernible]



(00:35:08)

long

term

$60

price

target.

[indiscernible]



(00:35:14)

question.

I'm getting

old,

Teodor.

Remind

me

again

of

the

question number

one.

[Teodor Sveen-Nilsen, Analyst, SpareBank 1 Markets AS]

Yeah.

The

first

question

was

on

Venus

discovery

and

cash

development

solutions

and

production

collection potential

and

effect also

on

dividend?

[Keith Charles Hill]

And

so, Venus

production,

I

think,

it's

way

too

early

to

talk

about

that.

We

drilled

one

well.

We

need

to –

I

think

the

plan

is

probably

to

drill

a

couple

more

appraisal

wells

and

there's

also

other

prospects

[indiscernible]



(00:35:43).

I

think

until

you've

drilled

those

wells.

Obviously,

we're

quite

happy

with

the

first

well,

but

you'll

need

a

couple

of more

wells

to

prove

that

– it's

a

huge

area. You

need

to

prove

that

[indiscernible]



(00:35:57)

over

that

whole

area

that

you

can

make your

development.

There

is a

[indiscernible]



(00:36:05) for

those

that have

access

to

it,

it

kind

of

gives

their

idea

that,

honestly,

I

think

it's

a

bit

early

to

make

those

kind

of

suppositions

around

what

we're

going

to

do.

I

actually

didn't

understand

you

on

the

second

one?

[Teodor Sveen-Nilsen, Analyst, SpareBank 1 Markets AS]

Yeah.

Well

the second

question is

just

on

the

dividend

in

the

long-term

[indiscernible]



(00:36:26)

2022.

Should

we

think

about

that

as

a

percentage

of

EPS

or

cash

flow

when

[indiscernible]



(00:36:33)?

[Keith Charles Hill]

I

think

[indiscernible]



(00:36:36) $0.05

per

share is

kind

of

the

base

dividend.

Right

now,

when

we

announced

that,

as

I

said

before,

it

was

like

4.5%

yield

on

[indiscernible]



(00:36:47)

share

price

went

up to

actually

the

yield

went

down

quite

a

bit

as

a

result

of

that.

But

when

we

see

this

kind

of

[indiscernible]



(00:36:56)

that

are

base

dividend

going

forward,

but

each

time

we

have

a

semi-annual

dividend

every

time

we

put

a

dividend

going

forward, we'll

take

a

look

at

that

and

I

think

you'll

see

that as

a

minimum,

but

we

do

want

return

excess

cash

to

shareholders.

We

also

just

want

to

do

acquisitions,

so

I

think

we

need

to

keep

that

in

mind.

Now,

the

big

thing

is

that

in

the

second

half

of

the

year,

we've

probably

seen

quite

a

bit

of

money

freeing

up

from

Nigeria.

So,

we'll have

a

much

bigger

pool

of

cash

to –

and

wish

to

take

that

dividend.

So,

again,

we'd

like

to

see

a

bigger

dividend

going

forward,

but

we

do

also

want

to make

sure

that

we

take

advantage

of

acquisition

opportunities.

[Teodor Sveen-Nilsen, Analyst, SpareBank 1 Markets AS]

Okay,

understood.

Thank

you.

[indiscernible]

[Shahin Amini]

(00:38:01)

Keith,

Pascal,

there are

a

number

of

questions

submitted

through

the

webcast,

[indiscernible]



(00:38:09).

So,

I'm

just

[indiscernible]



(00:38:11)

in

order.

The

first one

submitted,

in

fact,

before

the

call

started,

has

there

still development

plan

for

Kenyan

project

[indiscernible]



(00:38:22),

and do

you

expect

any

changes,

that

are

necessary

to

be

made

[indiscernible]



(00:38:27)?

[Keith Charles Hill]

So,

[indiscernible]



(00:38:29)

we

spent

a

lot

of

time

talking

about

that

when

I

was

in

Kenya

last

week.

I

think,

in

general,

everyone

is

very

happy,

both

the

joint

venture

partners

and

the

government

with

the

overall

development

plan.

There

were

a

few

tweaks

to

be

made

[indiscernible]



(00:38:43),

and

I

think

we're

now

working

through

those

with

the

government.

The

potential

partners

that

are

coming

in,

the

people

that

are

looking

at

it,

I

think,

are

also

quite

happy

with

that

development

and

plan

and

we

would

take

it

as

it

is

going

forward.

So

I

think

the

process

is

that

by

May

5

or

certainly

the 10th,

it

was

the

deadline

for

the

government

to

approve

and

we're

working

very

hard

to

make

sure

that

we

resolve

everything.

But

right

now

I

think

we're

at

95% –

98% of the way there.

I

would

expect

it

to

be

on

track

for

approval

on

the

10th

of

May.

[Shahin Amini]

The

second

– another

question

is

on

Venus.

Can

you

discuss

appraisal

plans

for

Venus

Block,

other

prospects?

Venus

[indiscernible]



(00:39:41)

and

if

the

upside

case is

600

square

kilometers,

the

full

structure

that

it's

full

of

hydrocarbons?

[Keith Charles Hill]

Yeah.

I

think

it's best

to

let

the

operator

talk

about

that.

I

mean

frankly

don't know

what

Total's

plans as

operator is

to

do

with

them.

When

I

told

you

I

think

a

couple

of

development

or

appraisal

wells,

I

think

that's

me

talking

as

a

shareholder

of

Impact

and

even

as

a

working

interest

holder.

So

I

know

that

we've

talked

about

that there

are

similar-type

prospects

on

the

West

Venus

Block

so

I

think

–

I

would

hope

that

a

very

active

drilling

program

would

commence

sometime

later

this

year

on

both

of

those

products.

[Shahin Amini]

And

following

on

from

that

what

is

your

personal

preference;

to

go

all

the

way

to

first

oil,

whether

to

monetize

before?

[Keith Charles Hill]

As

the

great

American

philosopher

Clint

Eastwood

said,

man's

got

to

know

his limitations.

And

I

think

at

some

point

we

have

to kind of ask

ourselves

and

Impact

as

an

investment

partner

in

this,

do

we

want

to be

a

deepwater

developer

with

some

of the major

oil

companies?

I

think

the

tentative

answer

is

we

prefer

not

to

be,

but

I

think

we're

going

to

follow

the

Cove

model

and

I think Cove

did

a

good.

If

we

wanted

to

sell

this,

I

think

we

need

to

stay

in

for

a

little

while

and

drill

some

appraisal

wells

and

understand

this.

I

think

you get

one

price

if

you

drill

one

well

and

have

a

discovery;

I

think

you

get

another

price

if

you

drilled

some

appraisal

wells

and

have

kind

of a

well

thought-out

development

plan

by

the

operator

ready

to

go.

So,

I

think

that will

be

your

question

how

long

we

want

to

stay

in, but

I

think the

answer

is

we

don't

want

to

stay until

first

production

is.

That

would

be

my

guess

[indiscernible]



(00:41:31).

[Shahin Amini]

I have

a question

for

Pascal

and,

well,

congratulations,

and

the

question.

So,

we're

quite

impressed

by

the

refinancing

and

the

standby

credit

facility.

The

question

is

obviously

the

ESG narrative

and

climate

change

is

a

big

headwinds

for

banks

lending

to

oil

and

gas projects.

Do

you

see

that

as

a

problem?

[Pascal Nicodème, Chief Financial Officer, Africa Oil Corp.]

I

think

going

forward, well,

first,

we

have

the

strong

support for

five

banks

which

all

have expressed

an

interest

to

support

us

going forward

in

acquisitions. I

think

that's

a

real

positive.

I

think

for

all

these

banks,

we

ticked

all

the

boxes

for

their

strategy;

their

oil

and

gas

strategy

going

forward.

We're

trying

to

communicate

more

and

more

in

terms of

ESG. We

posted our

Sustainability

Report,

at

the

same

time as

we

posted

[ph]



EIS (00:42:24)

yesterday,

so

all

this

is

going

in

the

right

direction.

So,

I

think

in

the next

12

months

or

two

years,

I

think

we

will

discuss

even

more

with

our

banks

about

sustainability-linked

covenants

as part

of our

refinancings,

so that's

definitely

the

trend

at

the

moment.

But

I

think

as

long

as

we

continue

to

report

on

the

same ESG line

and

we

understand the

ESG

standards,

we

should

keep

the

support

of

our banks

and

that's

definitely the

intention.

[Keith Charles Hill]

I

think for the

people

that

are

good

actors

on

the

ESG

side and

especially

of

course of

the

focus

is

on

the

carbon

side.

I

think

we

will

still

be

investable.

I

think

there

are

some

OECD

banks

that

won't

be

able

to

write

loans

for

oil

and

gas

anymore. But I

think

there's

quite

a

few

that

will.

And

I

think

we

may

have

to

look

at

other

markets;

Middle

Eastern

markets,

Far

Eastern

markets

for

financing.

But

I

think

the financing

is

there.

I

think

you

have

to

be

at

the

top

quartile

or

maybe

in

the top

decile

of

ESG

performers

to

be

able

to

attract

those

type

of

investments.

[Shahin Amini]

And

there's

a

question on

the

[indiscernible]



(00:43:37) in

an

undeveloped field,

it

went up

[ph]



$130 (00:43:40),

could

you provide

an

update?

[Keith Charles Hill]

Yeah.

[indiscernible]



(00:43:42)

is

kind

of

just

waiting

for

us

to

pull

the

trigger

on

it.

Obviously,

it

wouldn't

come

onstream

until

just

before

the

license

extension.

So

I

think

at

least

one

of

the

partners

is

quite

keen

to

get

the

license

extension

before

we

pull

the trigger.

But

we've

done

all

the

groundwork.

We've

actually done

a

re-look

at

it

this

past

year

and

then we've

been

able

to

take

three

wells

out

of

the

development

program

with

increasing

reserves

and production

and

so

I

think

we're

ready

to

pull

the

trigger

on there.

We've

already

drilled

it.

We've

already

got

a

development

plan

with

the

government.

So

I

think

the

only

thing

kind of

holding

us

up

is

we'd

like

to

see

that

license

extension

before

we

pull

the

final

investment

decision

on

that.

[Shahin Amini]

Okay. Here's

a

tough one

for you,

Pascal.

Have

you

considered

switching

the

corporation,

the

country

domicile

to UK

or

somewhere

else?

Perhaps

more

taxes, to shareholder

dividends,

et

cetera, withholding

tax?

[Pascal Nicodème, Chief Financial Officer, Africa Oil Corp.]

No,

we

haven't

talked

about

it.

I

think

in

the change

of

domicile

should

go

as

a

– together

with

a

big

milestone

production

price.

At

the

moment,

I

think

we

are

well-domiciled in

[indiscernible]



(00:44:52) Canada

and

we

see

the

same

structure

for

the

time

being.

[Shahin Amini]

Yes.

Okay.

Well,

there

is a

tough

one

on South

Africa

exploration

for

you,

Keith.

It's

specifically

about

the

court

case

and

the

question

goes

how

could

exploration

program

for

these South

African

investments

be

hindered

by

recent court

rulings

there on

seismic

data

acquisitions?

[Keith Charles Hill]

Well,

I

think

we're

all

a

bit surprised

on

this

because

so

many

seismic

acquisition

of

this

nature

has

been

going

on

for

50

to

70 years. I

think

all

of

the

studies

indicate

it has

a

fairly

minimal

impact

on

any

acquired

life and I

think

we

had

done all

of

the

necessary

environmental

impact

assessments.

So

we're

a

bit

surprised

by

this

action.

So

I

think

obviously

there

are

court

cases.

There

are

court

dates

coming

up.

We have

appealed

this

decision

and

I

think our

operator,

Shell,

will

be

aggressively

trying

to

move

this

project

forward.

I

think

certainly

from

a

overall

environmental

standpoint

of

South

Africa,

the

gas

that

we

found in Block

11B/12B

and

the

potential

oil

or

gas

found

in

the

[indiscernible]



(00:46:16) Block

where

the

seismic

was

cancelled,

we

would

potentially

be

displacing

coal-fired

power

plants

in

South

Africa,

so

having

a

very

positive

permanent

impact.

But

also from

a

social

impact,

there

are

still

a

lot

of

people in

South

Africa

who

don't

have

access

to

reliable

power.

So

I

think

ESG is

a

threefold

thing: It's

Environmental,

it's Social

and

it's

Governance.

I

think the

Social

side,

particularly in

Africa doesn't

get

enough

attention.

Less

than

2%

of

all

CO2

emissions

from

the

world

come

from

the

entire

continent

of

Africa.

So

I

think

what while

we

are

all

engaged

in

the

transition,

I

think

we

also

have

to

be

cognizant

that

the

people

in Africa

need

power,

reliable

power,

and

that

there

are

alternatives

either

burning

coal

or

deforesting

the

continent

that

are not

viable

alternatives.

We

hope

they

make the

right

decision.

[Shahin Amini]

Very

good.

And

there

is

a

question

Pascal

on

Q4

2021

cash

flow

from

operations

and

why

is

it

lower

than

the prior

quarters?

I

can answer

that

if

you

like

or...?

[Pascal Nicodème, Chief Financial Officer, Africa Oil Corp.]

Yeah.

Yeah.

[Shahin Amini]

I

mean

–

so

the

reason

our

Q4

cash

flow

was

lower

than

is

simply

due

to

the

timing

of

the

cargos.

So

there

is

a

movement

in

our

working

capital

and

so

the

cash

flow

one

of the

cargos

liftings

hasn't been received...

[Pascal Nicodème, Chief Financial Officer, Africa Oil Corp.]

Okay.

[Shahin Amini]

And

so

that's

kind of

tackle

that.

And

Keith

is

Egina

trading

at

a

premium

to

Brent

currently?

[Keith Charles Hill]

I

don't

know.

I

mean,

it

was.

At

one point, we were even

[ph]

$6,000

(00:48:00) premium

because there's

very

little

sulfur,

very

good

quality

oil.

I

think

we,

if

memory

serves,

we've

sold

about

three

or

four

cargos

from

there.

I

think

we

still

are

getting

a

slight

premium,

not

as

much

as

we

were

at one

point but

I

believe

Egina

still

does

command

a

bit

of

a

premium

to

Brent. I'm not

100% sure.

[Shahin Amini]

There

are

many,

many

questions

on

dividends

versus

share

buybacks,

and

we

had

this

experience

when

we

were

consulting

our friends

and

investors

and

there

were

camps

that

wanted

dividends;

there was

a

camp

that

wanted

buybacks.

So I supposed

I'm

going

to

have this two-way

dialogue

with

you

[indiscernible]



(00:48:37)

a

lot

of

these

questions

and

a

lot

of

people are saying,

well,

you're

telling

us you're

undervalued

[indiscernible]



(00:48:42),

why

don't

you

do

a

share

buyback?

And

I

supposed

we've

already

said,

we

haven't

dismissed

share

buybacks and

it

is

still

on

the

table.

We

are

under

promising

and

we

want

to

over-deliver

as

the

year

progresses.

[Keith Charles Hill]

Yeah.

And

I

think

we

actually

went

out

to

all

of our

largest

shareholders

and I'm

talking

about

major

shareholders and

I

think

it

depends

on

where

you're

domiciled, which

you

prefer

and

probably

personal

tax

situation.

I

think both

are

effective

and

I

think clearly

some

people

are

much

keener

on

one

than

the

other.

So that's

why

we're

kind

of

leaving

open

the

option

of

maybe

doing

both.

But

I

can

tell you that

from

our

five

largest

shareholders

were

all

of

the

opinion

we

should

do

dividends

instead

of

buybacks.

And

I

would

say

amongst

the

rest of

the

shareholders,

there

was

still

a

majority of

people

wanting

dividend

over

buybacks

but

we

certainly

hear

your

voices.

Share

buybacks,

especially

as

we

continue

to

think

our

shares

are

undervalued

are

a

viable

way

to

make

returns

to

shareholders, in

some

cases

without

incurring

personal

tax

liabilities.

So

there's

not

a

perfect

answer

to

this

and

I

think

we

may

look

at

doing

both,

but

if you

do

both

you're

not making

either

camp happy.

So

I

think

unfortunately

it's

a

bit of

a

lose-lose

situation,

but

again

I

think

the

majority

of

our

shareholders

that

we

communicate

with

were

still

in

favor

of

dividend

over

buyback.

[Shahin Amini]

As I've said there

were

a

lot

of

questions on

that,

hopefully

that tackles

that

for

today's

session.

Changing

[ph]



the

tack (00:50:24) back

towards

exploration

and

Orange

Basin,

there's

a

question

on

Block

3B/4B,

in

the

event

of

a

possible

technical

studies

on

the

back

of

Graff

and

Venus

discoveries,

is

it

feasible

to

think

about

maybe

a

well-capped well

on there

in

2024?

[Keith Charles Hill]

I

would

say

before

that.

[Shahin Amini]

Okay.

[Keith Charles Hill]

We

have

a

3D

covering

the

whole

block

of

3D that was shut

by

BHP that

covers

the

entire

block

that

has

never

had

a

well

[indiscernible]



(00:50:56). And

when

we

look

at

that

and

we

compare

it

to

what

we have

seen

over

the

Venus/Graff

discoveries,

we

see

very

similar

looking

prospects.

So

I

think

especially now

that the

basin has been

de-risked, I

think

we

are

very

keen

to

move

forward,

as

operator

towards

drilling

a

well

but I don't

think

we

need

[ph]



to shoot any more (00:51:15)

seismic.

I

think

we

actually

can

move

right

into

the

drilling

phase.

So

we

do

have

a

60%

partner, Ricocure,

which

is

our

local

[ph]



D&E (00:51:25)

company and

of

course

we

need

to

have

discussions

with

our

partner

Eco

Atlantic

of

the timing

of

the

funding

for

that.

My

guess

is

that the

basin is

going

to

become

a

much

more

competitive

place

but

there

maybe

other

people

outside

of

our

box –

outside

of

our

current

ownership

group

that

might

be

interested

in

coming

into

that

box

as

well.

[Shahin Amini]

There's

a

question

[indiscernible]

(00:51:55) about Investor

Relations

but

I'm

going

to

put

it

to

you

first,

actually

after

the

[indiscernible]

(00:51:57)

But

the question

is

what

are

your plans

for

Investor

Relations

activities

moving

forward

to

tell

the

story?

[Keith Charles Hill]

Yeah

I

think

obviously

with

COVID, we've

been

a

bit

hampered

on

going

out

and

meeting

people face-to-face.

I

think

that's

pretty

much

over

now.

I mean I just

took my

69th

commercial

flight

to

come

here

to

London

since

COVID

hit.

So

after

my

two

jabs,

my

booster

shot, it

came back

that

I

got

COVID on

New

Year's Day

this

year.

I'm

actually

feeling

quite

good

about

travel and

I

think

obviously

the

world

is

opening

up

now. I think

we

still

have

to

be

a

bit careful,

but

I

think

the

world is

ready

to

move

on.

So

I

am

on off to Oslo

tomorrow

with

the

management

team

to

go

to

the Sparebank1

Conference and to meet

with

some

individual

investors

there.

And

I

think

we're

looking to – I've been

missing

Sweden.

I'm

looking

to get

back

to Sweden

in

the

second-half

of

March. We

have

a

Town

Hall

Meeting. We

have

so

much

investors

there.

But

I

think

we

are

going to

really

start

gearing

up.

And

the

one

thing

we

hear

from

our

investors

that

we

need

to

get

out

and tell

the

story

a

little

better.

I

think

you've

got

a

lot

of

value

in

this

company

but

some

of

it is

not

that

easy

to

explain.

Our

whole

portfolio

exploration

with

[indiscernible]



(00:53:17)

just

is

a

complicated

thing on how

do we

get

value

out of

that. And

we

found

[indiscernible]



(00:53:22)

Venus

now,

what do

we

do

going

forward?

How

do we

get

value

to

the

shareholders

on that?

I

think

it

will

be

good

to

get on

the

road

and meet

people

face-to-face

and talk

these issues.

But

obviously

we've

got

a

lot

to

talk

about

now than

we

were

for

so

long

as

a single-asset

Kenyan

company. We've

go lot to talk about

in Nigeria. We've

got a

lot

to talk

about Here

I'm

talking about in

Kenya

and

hopefully

in

the

near

future

and

with

our

exploration

program

as

well.

I'm

still looking

for

acquisition.

I

think

there's

a

good

chance

in

the

first-half

of

this

year

we'll

kind

of

have

an inside

track

on

at

least one

acquisition.

So,

once

that

comes

to

fruition, we're

going

to

get on

the

road and

talk

about

that

as

well. But I

think

the bottom

line

for

Investor

Relations

is

we

need –

we've

been

a

little

bit

hampered

by

COVID

to

do

that

the

way

we

like.

But

I

think it's

time

now

to

get

out

on

the

road

and start

meeting

investments

and

explaining

our

story

a

little

bit

better.

[indiscernible]

[Shahin Amini]

(00:54:20)

is my

e-mail

address is

available

and I've had many,

many

good

calls

with

investors,

whether

institutional

or retail.

We

do

listen,

so

you

can send

your

comments. I

always

make

sure

that

they

get

through

Pascal

and Keith.

We

would

really

like

to

have

a

constructive

engagement with

all

our

investors

we

must have

[indiscernible]



(00:54:40). So please

don't

hesitate.

Please

reach

out.

And

even

what's

working for physical

or

in-person

if

you

want

to have

a

Zoom

or

Teams

Meeting

with

me

so

to explain

the

results

but

see

if

there's

any – I mean

whether

there are

facts

that are

not clear

to

you,

please

reach

out.

I'll

be

delighted

to

help

you

understand

it better.

And

so,

yes,

let's

move

to

the

next

question.

I

think

we

have...

[Keith Charles Hill]

One

more.

[Shahin Amini]

...one

more

as

we're

running

out

of

time.

It

is

on

acquisitions.

Someone

has

said

that

in

the

last

call

you

mentioned

three

deals in

the

pipeline.

Now,

you've

mentioned

two

[indiscernible]

(00:55:23)

[Keith Charles Hill]

I

would

say

having

been

doing

acquisitions for

the

last

25

years

or

so,

you

have

to

kiss

a

lot

of frogs

before

you find

a

prince.

And, yeah,

I

think

one

of

our

acquisitions

turned

out

to

be

a

frog

and

not

really

a

prince

but

we

have

a

pipeline

going

now

and

we

have

dialogue.

We

still

see

our

best

sellers

as

the

major

oil

companies,

so

pretty

much

every

major

oil

company

that

has an

interest

in

West

Africa,

we

are

in

continual

dialogue

and

we

have

two

investment

banks

working

for

us

to –

also

in

continuous

dialogue.

So

I

think

we're

well-aware

of

the

opportunities

and

I

think

the

majors

are

well-aware

of

our

desire

to

get

into

the

right

opportunities.

So,

we'll

keep

pushing

these

forward. There

will

be –

some

will

be

coming

forward and

some

will

drop-off.

But

like

I said

I

think there's

a

good

chance

to do

a

deal

even

at

today's

oil

price.

I

think

you're going

to

have

to

give

some

of

that

upside

back

to

the

sellers.

So

the

last

two

offers

we

put

in

actually

have

kickers

to

go

back

to

the

seller

that if

oil

prices

stayed

high

which

I

think

will

make

it

easier

for

them

to

do deal

in

today's

market.

But

we're

not

going to

go out

buying

things

at

$70

or

$80 oil. It's

just

not

what

we're

going

to

do.

We

still

have

$60

oil

as kind

of

our

baseline

that

we're

going

to

make

money

on

$60

oil

because while

I'm

quite

bullish

on

oil

price,

I

went

back

the last

20 years

and you

see

what

oil

price

does.

You

have to

be

[ph]

consistent (00:56:51) with oil

prices.

But

I

think

you

always

want

to have a

upside

exposure

to

them

as

well.

[Shahin Amini]

Well, thank

you,

Keith

and

Pascal

and

unfortunately

we're

running

out

of

time

but

we

have

a

[indiscernible]



(00:57:04).

Please

feel

free to

reach

out

to

me.

My

e-mail

and

telephone

number are on

the

bottom

of

every

press

release,

so

don't

hesitate

which

I

will

do

my best

to

answer

your

questions

as

soon

as

we

can.

On

that note,

I'll

hand

the

call

back

to

the

operator.

[Operator]

Thank

you.

This

concludes

today's

teleconference.

We

thank

you

for

your

participation.

You

may

disconnect

your

lines

at

this

time.