Africa Oil Confirmed a Farm Down Deal with TotalEnergies for Orange Basin Block

By Abdul Rahman Bangura-

Photo Credit: Oil field

NEW AFRICA BUSINESS NEWS (NABN) Freetown, Sierra Leone- Africa Oil Corp. has disclosed the conclusion of Africa Oil SA Corp.’s (AOSAC) strategic farm down agreement with TotalEnergies EP South Africa S.A.S. and QatarEnergy International E&P LLC. for the Orange Basin Block 3B/4B, offshore South Africa, announced on March 6, 2024.

The AOSAC is a wholly-owned subsidiary of Africa Oil and mentains a direct 17.00% interest in Block 3B/4B and transferred the operatorship of the block to TotalEnergies.

Africa Oil under the transaction holds a an esteemed value of up to $46.8 million to Africa Oil and will receive, subject to attaining certain
milestones qualified in the Agreement, pegged cash payments for a total cash payment of $10.0 million of which $3.3 million is now due,
and the remaining balance in two successive payments conditional upon achievement of key operational and regulatory milestones.

Africa Oil will same receive a full carry of its 17.00% retained share of all JV costs, up to a cap, repayable to TotalEnergies and QatarEnergy
from production in case of exploration success and development, which is anticipated to be able to support the Company’s share of drilling for up to two wells on the license.

On a separate pact between Africa Oil, AOSAC, Eco (Atlantic) Oil & Gas Limited (Eco) and Eco’s subsidiary, Azinam Limited autographed in July 2024, AOSAC will attain an additional 1.00% in Block 3B/4B from Azinam subject to the tune of customary conditions precedent,
encircling approvals from the Administration of South Africa.

Africa Oil Chief Executive Officer -Dr. Roger Tucker, says: “Africa Oil has an unrivalled position amongst its Independent E&P peer group
in the world-class Orange Basin. This includes our interest in the Venus discovery and the follow-on appraisal and exploration upside on Block 2913B, offshore Namibia. This farm down with TotalEnergies and QatarEnergy, two companies with deep geological knowledge of
the basin, will facilitate exploration activities on Block 3B/4B, and extends our near-term scope for testing significant upside potential in our portfolio.”

The Block 3B/4B laminates an area of 17,581 km2 within the Orange Basin offshore South Africa in water depths ranging between 300m and 2,500m. This block lies to the southeast and on trend with number of oil discoveries encompassing the Venus discovery. There is roughly 14,000 km2 of 2D seismic and 10,800 km2 of 3D seismic over Block 3B/4B and a large alternative set of exploration hopes has been noticed.

The AOSAC has a 17.00% interest in Block 3B/4B (26.25% prior to completion of the Agreement) with TotalEnergies holding a 33.00%
operated interest; QatarEnergy holding 24.00%, Ricocure (Proprietary) Ltd holding 19.75%, and Azinam holding 6.25%.

On the conclusion of the Eco Agreement, that is subject to the satisfaction of customary conditions precedent, including approvals from the government of South Africa, the interests in Block 3B/4B will be comprised of: 18.00 held by AOSAC; 33.00% held by TotalEnergies; 24.00% held by QatarEnergy; 19.75% held by Ricocure; and 5.25% held by Azinam.

In 2024 July, Africa Oil and AOSAC autographed the Eco Agreement with Azinam, pursuant to which Azinam has sealed to sell and assign
a 1.00% interest in Block 3B/4B to AOSAC in exchange for the cancellation of all common shares in Eco and warrants over Eco common shares held by Africa Oil.

The Company holds 54,941,744 Eco shares and 4,864,865 in Eco warrants, computing roughly 16% of the total securities in Eco and same, calculating the whole security holding of Africa Oil in Eco. Through its new shareholding in Eco, Africa Oil has an indirect 0.93% interest in Block 3B/4B.

For New Africa Business News (NABN) Abdul Rahman Bangura Reports, Africa Correspondent