Afentra reports progress with acquisitions in Angola
By Josh White
Date: Wednesday 14 Dec 2022
(Sharecast News) - Afentra updated the market on its previously-announced Angolan acquisitions on Wednesday, reporting "good progress" with the Sonangol transaction.
The AIM-traded firm announced on 28 April that its wholly-owned subsidiary Afentra Angola had signed a sale-and-purchase agreement with Sonangol Pesquisa e Producao to purchase non-operating interests in Block 3/05 of 20%, and Block 23 of 40%, offshore Angola.
As it set out in its admission document on 10 August, the Sonangol acquisition remained subject to a number of conditions, including governmental approvals and the extension of the Block 3/05 production sharing agreement until at least the end of 2040.
"The company remains in discussion with all relevant parties and is continuing to make good progress on the transaction," the board said in its statement.
"An important condition precedent for the transaction is the production sharing agreement extension process - ANPG and the Block 3/05 contractor group continue to progress this matter.
"Nevertheless, the extension is now unlikely to be finalised before 31 December 2022, and the company together with Sonangol are working on extending the long-stop date for the Sonangol acquisition in order to facilitate satisfaction of the remaining conditions precedent, to enable completion in the first quarter of 2023.
The INA acquisition was meanwhile announced on 19 July, when Afentra Angola signed a sale-and-purchase agreement with Industrija Nafte (INA) to purchase a 4% interest in Block 3/05 and an up to 5.33% interest in Block 3/05A, offshore Angola.
In its admission document, Afentra said the INA acquisition also remained subject to a number of conditions.
"Good progress has been made with INA and the relevant authorities," the board explained.
"The transaction is now with the ministry awaiting government approval, and formal completion is anticipated to occur in early 2023.
"Given the progress made to date, there is not considered to be any requirement to extend the long-stop date pursuant to the INA acquisition at this time."
Finally, Afentra said production at block 3/05 for the first nine months of 2022 was "stable", and in line with expectation at 19,160 gross barrels of oil per day.
That was equivalent to around 4,600 barrels per day net to Afentra on completion of the Sonangol and INA acquisitions.
"We expect governmental approval of the INA acquisition shortly. which will allow us to complete this acquisition, marking our entry into Angola in early 2023 and the inception of our partnership with Sonangol in Blocks 3/05 and 3/05A with whom we intend to work closely with to optimise production and to extend the life of this quality, long-life asset," said chief executive officer Paul McDade.
"We are pleased that significant progress has been made on the award of the licence extension and look forward to this being completed so that we can proceed with the Sonangol Acquisition in the near future."
At 1556 GMT, shares in Afentra were down 4.89% at 25.3p.
Reporting by Josh White for Sharecast.com.
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