Q4 2021 Africa Oil Corp Earnings Call
Please standby.
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.
If you'd like to ask a question. During this time simply press Star One and then the number Star then the number one on your telephone keypad, if you'd like to withdraw your question. Please press star two places.
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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. Shocking Mimi Africa oils Investor Relations and commercial manager. Please go ahead Mr. Mimi.
Thank you Melissa on behalf of the management.
Thank you for joining us today for fourth quarter 2021 results cool.
Joined today by Bill.
President and CEO of <unk>, our Chief Financial Officer, Mr Cross selling you for them.
And it will present, a closer for advice on the business before we go into our questions and answer session.
I would like to remind everyone that the most majority of this session are subject to change.
Thanks, Matt.
Which involved.
Risk factors and assumptions and have been fully described in the company's continuous disclosure of recalls.
The information discussed is made as of today's.
Today's date and time on optical assumes no.
The games operation provides this information to reflect new events or circumstances, except as required by law.
Concrete is complete financial statements and related MD&A are available on the company's website.
I will now hand, you over to our CEO .
Please go ahead.
Thanks, everybody for joining us.
Obviously, we were pleasantly surprised with the opening of the market today.
Okay.
We've got a great buying opportunity ahead of us.
Yeah, we actually were.
I'm pleased to announce the results.
We've made pretty good progress on all of the funds that we've been talking about for some time starting.
Starting with the financials.
Record for them.
Full year net income of almost $300 million of 40 cents per share.
We've made a huge amount of progress.
The debt reduction.
Our initiatives, where are we in that free cash of $60 million.
Hey, Ryan level.
It also reduced.
Prime status significantly so we're down to a debt to EBITDA.
EBITDAX ratio.
Zero point of course.
And again, we've announced our share dividend.
Our first implementation of our shareholder return program, which seems to be made.
Transformation.
Investors.
<unk>.
Again from that standpoint, we refinance our debt if we get technology to do it.
I'm acquisitions, much lower cost and extend the term right now we have an undrawn $100 million.
It used to be a good years it.
It gives us liquidity.
Also I think we find it very good in today's environment.
Very good support from our banks.
Oil traders too.
Not only this project forwards.
Sure.
Thank you.
Perhaps the biggest.
That's what we did and I think for a lot of the movement in our share price last week.
We just.
Opening a new basin in the orphan space.
Got it.
Early days, yet on being as good as it looks like.
We are very major discoveries.
How are we positioned well at this point.
Please.
Patrick purpose as well.
Great Great that's happy with.
The results of that well I think we had two big risk scoring is did we have good quality reservoir.
Oil or gas.
Very good reservoir sections, and we have to.
And then just talk.
Talk a little bit more about that.
That's one of our highlights for the quarter.
Again production wise.
<unk> seems to be just rolling along.
We've hit the top end of our guidance.
The interest in entitlement and interest.
We've had that for the second year in a row over 100% reserve replacements, essentially we had the same reserves.
These fields.
Two years ago.
So I think the.
If you look at us.
This is the true measure of performance of Nigeria.
You're saying, it's the gift that keeps on giving the Orange line you see is that our dividends.
We've got a very good steady dividend yield $400 million since we bought this year.
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.
Thanks.
We now have an additional $189 million. So if you take the talent that we've actually.
You add that to what we received a dividend more than paid for our acquisition cost.
In less than two years.
Yes, I think this has been a really good acquisition for us.
It's again.
You're going to be here.
Towards producing product.
Moving.
No signs.
Again I think.
Much of the trend we've seen since we announced our dividend policy today, perhaps as others on the low side of two 5%.
I guess I want to make a few comments on that number one.
We actually decided on this dividend amount packet December .
And it was about four 5% dividend at that time.
Fortunately for us our share price was down.
55%.
A year or so.
Actually it looks like a smaller dividend, even though the actual level of dividend.
I think the second comment I made is we see this as kind of a baseline dividend five cents a share.
Obviously as we've talked about we've got a lot of money tied up.
Nigeria, both in cash on the balance sheet, but also we have a three.
$305 million securitization agreement with citizens Bank.
We hope to.
Liberate quite a bit of that cash out of Nigeria. The second half of this year.
We'll be looking at that dividend policy and I think there's a good chance.
Looking to <unk>.
Increase that as far as free cash comes true but.
I think the other the last point I would make is that this is a decision to pay.
Pay a dividend, but it is not a decision to stop growing.
We do purposely keeps all of our cashback, because we do still feel that even in this $100 oil environment. There are some really good acquisitions.
And we are involved in that and evaluating bidding out some of those now.
We want to keep our powder dry to do some.
Accretive acquisitions, primarily production, primarily West Africa, primarily majors.
Obviously, what we would like to raise as little equity as possible. So keeping cash on the balance sheets combined with traditional debt.
So I'm Craig financing I think we can probably buy things.
And I could go back into the year.
So again, the first dividend may be slightly lower than some people might like.
I think we thought it was important to show the market, where we have that capital discipline that we will start returning cash to shareholders.
We hope to see that dividend grow.
Throughout the year as we particularly start freeing up some cash from Nigeria.
So.
<unk>.
Yeah.
The promises we made last time last year at this time. This was our first promise was deleveraging I think we've definitely done that.
Yeah.
<unk> cut our.
That down to zero at the ALC.
The RVO desktop to us.
0.8, because we paid off just about $1 billion of exposed our EBV debt over the past two years.
I haven't closed the new acquisition opportunity I've tried a few in.
As I said, we still got a few more I think that's a real goal for us for the rest of this year is to give us a good accretive.
Nigeria type acquisitions.
The acquisition and I do think there I think there's more sellers than buyers.
Still a buyer's market out there even at a $100 oil we may have to craft are being a little more intelligently and maybe get a little of that upside back to the seller.
I do think we can still make deals $60 oil price.
I'll have a possibility of course.
And again, we have a we have instituted our shareholder return programs I think we see this as kind of a 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 were at the upper end of the range both the working interest production.
Gotcha.
Also well over the top of the range.
Our free cash flow from operations.
The big Orange darker Orange bar, you see on the left that sense securitization payments.
On the Redetermination Blackhawk T.
So again that money is a little bit locked up right now we still have two outcomes discussion to have.
Our friends with Petrobras we have.
To unlock that money by the middle of the year and have it available for dividend.
So again, we were at.
Our guidance on.
2021, and we expect it.
Really strong guidance on cash flow from operations in 2022.
For 2023, so capex were slightly below and we haven't.
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. This year.
Care and maintenance.
We will get back to drilling some wells.
Gena, we will be getting back to drilling some wells.
Right.
EBITDA.
The drill some wells.
Late next year early the following.
So I think.
Again these fields are a great field, so they do need a little bit.
At the level they are.
So our guidance for next year are.
Our working interest production.
A range from 22 five.
Firefighters entitlement production from 23% to 27.
Uh huh.
That's slightly down from this year as we saw some of the fields decline, but again I think both capital investments.
Our restaurant decline agreements some fields actually raise that.
Cash flow again.
Similar to last year.
If you take out that AR securitization roughly the same cash flows last year.
I think our Capex will go up a bit next year.
We still have a pretty strong debt repayment program.
This year that is one thing we hope to put off by doing a license renewal early nice places, especially in all of our thirties.
If possible, we'd like to get our debt redone on site licenses renewed.
Essentially pushed all of this net debt repayment in the future.
So again fairly modest budget for R&D for our.
For the company.
A little bit of money in Kenya, which we'll talk about.
You can try to keep.
No G&A.
Profile, we do see a bit of equity investments.
Our company is particularly following up on me here.
Stuart.
So again the financial highlights.
At this point I'll turn it over to Pat commented and walk through the next few slides.
Yes, Thank you Keith.
As mentioned I think this was a record year last year.
<unk> posted $190 million for annual net income, which is a great achievements.
More than four 5 million net income on a quarterly basis.
And the main achievement last year and that was pretty repaid.
So the acquisition debt.
Sign when we did this prime acquisition is fully repaid.
We ended the year with almost $60 million kind of finance.
Of course, all this should give us all underpinned by a very strong performance at prime level.
On the production and unpriced basis, thanks to our it team.
Got it.
And.
We are booking in the fourth quarter of 2021.
Cautious.
Destiny.
$6 million.
Thank you.
Yes.
Very strong performance from from Prime.
Not even taking into account the security deposit that we've received.
And in June last year, which is basically more than monitoring.
She will shine in Prime Prime has continued to deliver in terms of our EBITDAX when a 12 months basis not Trs it's in more than 600 million EBITDAX discontinued.
We have continued to repay down albeit.
Which is which had below 1 billion now and the end of 'twenty.
One of them.
Okay.
More than 500 million.
And I think Al's level I think the main achievement has been as I mentioned to you during the full repayment of our debt.
That facility is and on top of that we managed to increase the availability of Chengdu Corporate Trust.
$200 million, which is available for.
General corporate purposes, including acquisitions. So we are ready to keeping this line is a it is kind of benign.
To be able to fund future acquisitions and at very competitive terms.
We secured.
Joe that's kind of the line.
Our existing a syndicate of banks five banks with Sha.
Hopefully are going to support us going forward you know NOI physicians.
So forgive.
If we can move on to something a little bit more exciting exploration, which of course, everyone knows is that.
Underpinning the corridor by our.
I think we've had an active exploration program for the past few years, mostly through our portfolio of companies and we've had a couple of nice discoveries.
The leopard and robotic discoveries at <unk> were phenomenal discoveries.
Our friends at <unk> energy.
Those forwards.
We had a couple of discoveries in Guyana does look pretty good and then they turned out to be a little bit heavy sulfur rich, but we still think Guyana Suriname.
Places like for hydrocarbon obviously is the best place people.
The last two decades.
Oil and gas so we saw a position there.
Sister company Agco biotech is towards improving that position.
But the big one of course is Venus wherever yet, we finally had drilled a well there and it 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.
Yes.
The heart of the famous itself was about 400 square kilometers that's.
Very strongest reflective of your Incrementals are about 150 square kilometers.
Beautiful discoveries.
Again, the two risks we had was a gastro and has now confirmed to be light oil with associated gas and the reservoir quality is much better than we expected.
Twice as thick as we expected, but it is.
Actually better quality perspective.
So I think the.
We already have a $6 two indirect interest of this.
We're not in a position to talk about resources, we'll leave that for the operator in Florida impacted us, but obviously, you've probably seen some pretty big numbers being bandied about in the press.
Yes.
Our feeling is those are unreasonable numbers for what we've seen so far.
But I think what for what.
What we like about it is there is also right next door is $40 oriented graph discovery by shell. So again they found what we think is a very large oilfields.
Yes.
Kind of to underpin that they actually took the rig resupply it brought it back in their drilling.
The appraisal well, which is eight kilometers away from the discovery well. So that gives you a bit of a idea of how big this thing could be.
We also have quite a nice block <unk> 4 billion with traffic or it was actually the operator.
At.
That comes out of a 20% working interest.
We see a lot of the same type of things.
They saw it.
In the graph discovery.
I do think it's interesting if you look at that level.
On the bottom left.
Actually Guyana, Suriname basin at the same scale as the Orange basin.
It kind of shows you just how big the Orange basin as you can fit the entire Guyana, Suriname protective trends inside of block three <unk>. So.
So how do we de risk this.
So delta this is one of the big five delta or breast.
Africa the only.
That really hasnt been explored yet.
Right now we're seeing that it's got a huge potential how do we convert them.
Volume system.
You also see on that there's a block on the far right.
Two blocks to be which is again, the Africa oil, sorry Africa energies and <unk>.
<unk> block Eco has just recently taken over as announce so they have 50% interest among operators and of course Africa oil SCS Africa sorry.
<unk> energy has a 30% working interest so we have a very good interest in this we will be drilling a well there hopefully starting in the third quarter and this is this is not related to the Venus discover your graph discovery. This is actually a risk based on.
Taxi goes off tomorrow in Kenya.
It already has a well that's proven petroleum system. There. So again, we're quite we're quite keen on that.
It has it's not as big as some of the stuff offshore but.
Great economics, but it's in shallow water.
So again, we are we still remain very keen on exploration.
Youll see us following up our investments.
And Venus.
Staying on that path.
We're quite keen on that.
Okay.
Okay.
Okay.
Kenya's seems to be the forgotten trial here in the in the.
Africa oil accounted don't blame investors on that we've been at this along with the notes if you can.
Telling everybody here its a great project.
We are moving forward on this.
Cancel.
Moving this forward.
Thank you for not believing the after all these years.
Those problems.
I can tell you we are quite engaged.
Last week.
We have a couple of interested very interested parties and I think the chances of getting us the strategic partner, we've been looking at for 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.
And actually move this project forward.
So again.
The proof is in the pudding.
If we have a partner and we're hoping to announce sometime in the second quarter.
The stars seem like Theyre finally, aligning our best.
Good chance of actually.
Putting some value to the company on this I can tell you right now there is no value at Kemper tenure in our share price, but if we're able to pull this off I think it's going to be worth at least $1 probably more shares to the company.
I think.
We talked about Africa oil you probably saw our reserve report.
Right now the Nigeria project unto itself is worth about $1 $4 billion was based on $60 oil.
If you take the debt offset we have.
Yeah, which is now all needs.
Kind of a net debt and <unk>.
You get about a $1 2 billion valuation just for Nigeria, which of course is significant.
Over and above our share price today.
800 million.
Thank you.
I believe I've said this before you kind of have the.
The ability to buy Africa oil for Nigeria.
Stable at best.
Our cash flow and dividends paying projects, but you get the rest of this all for free.
Not only our exploration portfolio companies, which first nowadays so that's probably a pretty big value associated to our even as discount rates, but you also get Kenya.
I think that's I'm looking to buy Africa oil shares.
That's the way I think about it this.
Somewhat of a risk free investment on Nigeria, and you get all the other stuff.
Cost.
We do think obviously now that we've made the Venus discovery I think youll see us.
Adding more value.
Exploration.
Okay.
So this is our.
The catalysts that we see in 2020, so obviously, we're hoping that a hotel goes as quickly as possible to grow our previous.
This discovery, so we have a better understanding of it.
It puts a work program for Tetra CS.
I like to think this could be one that can be developed quickly.
<unk> analog and power.
Okay.
They were four years from the first discovery well to peak production.
We'd love to see a similar type program on Vegas.
We're also having <unk> the results of this year again, it should be spending some time in the third quarter.
And then the biggest thing in prime for Us is converting the license.
So the new petroleum.
We're.
I'm talking about it was kind of automatically with 20 year license renewal.
So once we do that then we can refinance the RVO and all the money we've been thinking about paying back to the banks, we can actually keep or use for caesars.
Distributions to shareholders or to buy assets.
So again.
That's my one of my Big focus is now is we're looking at producing assets again.
Kind of what we would prefer to buy things at $50 oil market I still think because it's really a buyer's market theres still a number of good assets with the major stores selling off.
Again.
There's a lot more buyers a lot more sellers than buyers.
And then finalizing Kenya, Kenya.
Most people say I believe it when I see it approach but.
I can tell you over the last year, the operator Tullow myself.
I've been working very hard on getting our project in shape and working hard for a strategic investor types to find these type of move this thing forward.
212.
So that's pretty much all I have to say, yes, I'll, let you read the forward looking statements.
Just wanted to thank everybody once again for dialing in and I think we're now ready for questions.
So yes.
Thank you.
Thank you if you'd like to ask a question. Please signal by pressing Star then one on your telephone keypad.
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Okay.
Okay.
And we'll take our first question from James Hosie with Barclays. Please go ahead. Your line is open.
Okay.
Thanks, Good afternoon, and good morning, everyone.
I've just got a question on your refinancing climates for prime it certainly sounds like <unk>.
During the the license extension Prereq, because it takes two refinancing their b L.
Wondering how you manage the need for your partners in those licensees to also like to extend the license and move to new physical cards.
Hi, James.
We have I think if you already have.
Well.
In relation to debt refinancing so I wouldn't say that the licensing jewelry. The prerequisite we are thinking about sub chat together with prime.
Due to refinance the <unk> licensing revenues and you probably saw that we closed last year that we explore.
Already extends beyond the.
License renewal date so.
Refinancing the LVL with other type of debt is nuts.
Impossible at this stage on what you've already done it. So I think the purpose for this year is really to continue to reschedule the amortization profile of the Albion and extended.
License.
All day so.
I think this is work in progress.
I'm not saying we are going to refine the full all in one go but at least we are going to continue issue, Iran deferred additional trenches and move.
The debt repayment profile beyond the line.
Can you hold dates and I saw the actual renewal is concerned wise green again.
More about this but the operators both southern Illinois, Matawan Gen launch to seven <unk>.
Since the discussions.
We then NBC on the GPL together <unk> <unk> and of course, it's a sort of a win win situation where you're out.
As soon as you are.
Extend it.
Yes.
I think it's in the interests of all parties to get early.
New licenses and move as soon as possible.
Yes.
Okay.
Okay, great. Thanks, I think that's the gist.
Alright, I think I won.
I think accenture on 130, we see as much easier I think 127 have some complications with a local partner. So I think that one will be the tougher ones, but I think at best cost side I think everybody has the incentive to move towards for US important one is $130, 80% of our reserves production and cash flows.
Colorado, One 130, so that's that's the more important one for us.
Okay. Thank you and I guess that's one.
Part of the question on Kenya in Salt Lake. So it's promising if you feel you could have used on our pharma in Q2 I was just wondering if we should be expecting that far back to evolve with the cash coming to Patrick Oilers essentially youre looking for carries through the initial development work.
Yes, I think we're kind of agnostic as to whether it's cash or Terry.
Yeah.
But the interested parties, we had been discussing with both offered both.
Frankly, it doesn't really matter to us that much.
I think.
The dollar amounts are the important thing, whether it's paid up problems or whether it's a carrier is less important.
Okay. Thank you very much.
Yes.
Next we go to the line of Nick Stephano with Brent. Please go ahead. Your line is open.
Hello, Hi, it's Nick from rank up there. Thank you for taking my questions I've got three P. I, a N and why don't we catching.
Have you done Arlington I'll exercise to see you know, maybe what's the valuation or kind of like.
Free cash flow, if you could get even confirmed to PIH chips.
That's the first question on that topic and the second one is I recall when when the bill was that it was supposed to be effective.
First gen.
January .
And last year.
Is there a chance they can make an argument for kind of like you know.
Fiscal terms actually.
Going back and then we can kind of like it's kind of like claim.
On <unk>, although it was kind of like you know it would just be effectively off of when.
All parties say Colbert today, Scott chips, so they felt the PAA Christmas or Alaska follow ups. Thank you.
So we've done our economic analysis of converting the EIA and we see about a 10% to 15% uplift in our <unk> Tvs.
One of the reasons is of course, we've done a.
And Gina field, which is.
Our new discovery in the <unk>.
Still on royalty holiday and pray away is a new development, which will have royalty holiday all of those are kind of encapsulates.
But there's some.
Majority of good points coming into the.
G&A, which is a.
The change in taxes from 15 down to 30%.
I think there's a number of other positive things are associated with.
I don't believe there's anything was going back in fact, once you convert them all.
I'll pass disputes are considered itself.
That's one thing that and 127 I think they are thinking about there are some outstanding disputes that might have to be settled before that gets converted.
In general we see it as a very positive thing for us we see that in <unk>.
By adopting.
Understood and then on the <unk>.
Hedging.
Should I think of your policy us.
Q will sell for ward at whatever the Caribees.
Safe for them to accomplish for them.
For the following quarter. So for example, lapping.
Yes for the entire of the first and second quarter.
And then should I expect that in the second quarter sell for world fuel.
Three Q1, maybe some of the fall two cargos.
What are the cap would be at that point in time is the how the policy works.
On the hedging policy, which is something that the banks support as part of our Army L.
I'm trying to yes.
Taking a little financial disciplines.
Obviously.
In the first half of this year.
We probably lose a little bit on our hedging I will tell you in 2020, we made $430 million gains on our hedging so I think what.
What we see in hedging as an instrument to kind of smooth out cash flows a bit that's also something the banks want to see.
So the current policy is we tend we tend to hedge between.
50, and 60% of our crews and.
The way the market is right now you can't really easily hedge out at a reasonable price too far out so we tend to.
The closer crews.
The last the last one we had was at $88.
I think we're holding drive for that.
Second half of the year, we've got four unhedged cargos.
Given what's happening in the World I think we may hold off.
I tried to get a better price for us.
Yeah.
Okay. Thank you.
Next we go to the line.
Fine.
Sberbank one markets. Your line is open if you'd like to state your name prior to asking your question. Please.
Yes. Good afternoon. This is Ted on input from the public markets.
Thanks for taking my question and congrats on a batesville 'twenty to 'twenty one.
Quick question.
First of all none of that is actually maybe not that great.
I know, it's early days, but if applicable to <unk> to discuss some pockets developed portfolio since I'll, maybe kick the production potential second question is on dividend policy.
Right right.
You said that you were looking for.
With that throughout the year.
And then how should we interpret that will use the captive and then that the percentage of cash flow or EPS or oh, how to them what do they look like yet.
I'd also quite stable place and Casco and guidance you provided for volume and cash flow what is the underlying oil price assumption.
Hudson, social pork or that guidance. Thank you.
Okay.
Got it.
Almost forgotten.
So let.
Let me take them in the opposite order the easy one is that we use.
The forward curve.
All right.
The cash flow assumptions for price.
$60 flat essentially in long term price and then we use.
Our hedge values.
In the short term so whenever we've hedged plus basically with the forward curve is the long term $60 price.
Alright.
Two questions.
Theodore.
Remind me again the question number one.
Our first question will then.
And it hasn't developed production potential.
David.
As a venous production I think.
It's way too early.
Talk about that.
Drilled one well, we either I think the plan is.
We did drill a couple more appraisal wells.
And there is also other prospects in Raleigh.
That market in the western spot I think until you drill that drove those wells.
Obviously, you were quite happy with the first well but.
You will need a couple more wells to prove it's a huge area you need to prove that that reservoir so to speak.
Stimulus over that whole area.
Sure.
Development decisions.
There's a woodmac reported that's out in a sort of open up access to kind of give us there.
Honestly I think that gives just a bit early to make those discounts supposition come up we're going to do.
I'd actually didn't understand you on the second one.
Yeah.
Okay.
Second question.
Jeff.
David.
Hello to a loss of about 2022.
So EPS or cash flow.
When airlines.
Sure.
Yes.
Thank you maybe got five cents a share as kind of the base dividend.
Right now we know we have.
When we announced that as I said before it was like four 5% yield on that.
Since our share price went up it actually yield went down quite a bit.
As a result of that.
Yeah.
Where do we see this kind of five census, rfps dividend going forward, but each time, we you know we have a semiannual dividend every time we.
<unk> put a dividend going forward.
We will make that will take a look at them.
I think you'll see that as a minimum but.
We do want to return.
Excess cash to shareholders. We also do still want to do acquisitions. So I think we'd like you to keep that in mind now the big thing is that in the second half of the year, we'd probably see quite a bit of money, bringing up from Nigeria.
Have a much bigger pool of cash.
Take that dividend.
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.
Okay understood. Thank you.
Yeah.
Right.
So it is a kiosk at all there are a number of questions submitted through the webcast.
As always of course, a few so I'm just going to go in order.
First one Mrs.
For the Costar suite.
As the field development plan for Kenyan project being well received and do you expect any changes.
All necessary and it should be.
Thanks to the plan.
So again it was quite a bit we've spent a lot of time talking about that when I was in Kenya last week.
I think that 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 sure recall.
And I think.
We're now working through those with the government.
The potential partners.
Coming in.
The.
The people that are looking at it I think.
And also quite happy with that development.
Planning.
Take it as it is going forward, so I think.
The process is that if I may the fifth.
Certainly the 10th.
As the deadline for the government to approve and we're working very hard to make sure. The reason resolve everything but yes.
Now I think we were 95, 8% I would expect it to be on track for approval.
Okay.
Okay.
Second another question.
One is on Venus I mean can you discuss the appraisal plan in soybeans block other prospects.
Interesting.
The upside case is 606.
As a result, some case the 600 square kilometers of the full structure as it is full of.
Hydrocarbons, Yes, I think it's best to let the operator.
Talk about that I mean, again I don't know what hotels as operator has to do with them. When I told you I think you know it needs a couple of development or appraisal well that's me talking as a shareholder impact uneven is way up.
Working interest holders.
I know that we've talked about there are similar type prospects on the West Venus block.
Thank you.
Yeah.
I would hope that a very active drilling program with tremendous.
Sometime later this year.
Both of those products.
And following on from the Us.
What is your personal preference to go all the way to first oil will look to monetize.
Is that.
The Great American philosopher Clint Eastwood said.
<unk> got to noted limitations.
At some point, we have to kind of ask ourselves and impact of our investment partner.
Do we want to be a deepwater developer with some major oil companies.
Tentative answered as we prefer not to be.
But I think we're going to follow the cold model I think did a good job.
If we wanted to solve this I think we can sustain for a little while.
Drill some appraisal wells and understand.
I think you can get one price if you've drilled one well and have a discoveries I think you'd get another price. If you drill some appraisal wells without kind of a well thought out.
On the operator ready to go so I think that'll be a question how long of a fan but.
The answer is we don't want to stay until first production that would be my.
Yep.
A question for Pascal.
Congratulations and a question.
Quite impressed by the refinancing some of our credit facilities and the question is obviously the MSG networks.
Climate change is a big headwinds for banks lending to oil and gas projects do you see that as a problem.
I think going forward was first we had a strong ship goes for buybacks, which all have express.
And interest to ship orders going forward and our traditions I think that's a.
That's a real positive.
I think for all these banks, we tick all the boxes for best franchise retailer invest fat tissue going forward.
We tried to communicate more and more in Genco BSG.
We posted all sustainability report at the same time of each posted EIF.
SMA two OLED going in the right direction. So I think in the next 12 months or two years I think we will do.
Discuss even more with our banks about.
Just suddenly BTT things covenants as top level refinancings, so thats good.
At the moment, but.
I think as long as we continue to report on the same.
ESG nine millimeter same EOG standards, we should keep that you broke up with banks and thats, including pension.
No.
The people that are good actors on the ESG side, and especially of course the focus is on the carpet side I think we will still be investable I think there are some OECD banks won't be able to.
Right levels for oil and gas markets.
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 and I think the financing is there I think you have to be.
Quartile.
Decile of ESG performers to be able to track those.
Type of investments.
There was a question on the pro away undeveloped fields in <unk> could you who wasn't up things for me one is kind of just waiting for us to pull the trigger on it.
We have seen it wouldn't come on stream until just before the license extensions and.
At least one of the partners is quite keen to get the license extension before we pull the trigger events. We've done all the groundwork we've actually done.
A re look at it this past year, we've been able to take three wells out of the development program with us increasingly reserves in production. So I think we're ready to pull the trigger on there we've already drilled and we've already got a development plan with the government.
And Kevin the only thing holding us up is we'd like to see that license extension before yes.
Before we had the final investment decision on that.
Okay. That's helpful. For you Pascal have you considered switching the cooperation with the country's domicile to UK or somewhere else, perhaps more tax efficient with dividends.
Moving to tax.
No we haven't thought about it I think.
And the change of any size should go as.
Together.
Big milestones collection trucks at the moment.
Adobe sign into Eastern Canada.
Thanks Harsha.
On being.
Yes.
Well.
It was a tough one on South Africa exploration well UK.
It's specifically about the coolest case.
Cushing goes hack with exploration program has been must must be hindered by recent quote Livingston new takes on acquisitions.
I think I think we're all a bit surprised on this because I mean seismic acquisition of this nature. It has been going on for 15 to 70 years.
All of the studies indicated is a fairly minimal impact.
Aquatic life.
We had done all of the necessary.
<unk> Pak assessments, sorry, a bit surprised by.
By this action.
So I think obviously the.
Court cases or court dates coming up to us.
We have a.
Appealed this decision.
Operator.
So we'll be aggressively trying to.
To move this project forward.
Certainly for months.
From a overall environmental standpoint of South Africa.
The gas that we founded 11 12.
Potential oil or gas found it.
Oh.
Transkei block with a seismic was canceled.
We would potentially be displacing coal fired power plants in the.
South Africa, so having a very positive carbon impact, but also from a social impact.
Now there are still a lot of people in South Africa, who don't have access to reliable power. So I think you know ESG is a threefold.
Its environment, social and governance, I think the social side, particularly in Africa, it doesn't get enough attention.
Less than 2% of all <unk>.
Emissions.
The World Cup from the entire Continental Africa.
So I think.
While we are all engaged in the transition I think we also have to be cognizant that the people in Africa, the power grid reliable power.
There are alternatives either earnings or <unk>.
First thing.
Content.
Sure.
We hope they make the right decision.
Very good and there was a question.
On the <unk>.
Q4, 'twenty to 'twenty, one cash flow from operations.
And what exists.
The training courses on our channels and Sheila.
So the reason our Q4 cash flow was lower than it is simply due to the timing of the cargoes. Since there is a movement in our working capital.
So the cash flow one of the Congress lifted so it hasn't been received.
So that's kind of cool status.
Chief is trading at a premium to grow its economy.
I don't know.
Was a comprehensive $6 premium to this very low sulfur fuel.
Quality oil.
If memory serves we sold about three or four cargoes from there I think we still aren't getting a slight premium as much as we were at one time.
I'll leave it.
It still does command a bit of a premium.
About 100% sure.
Bill many many questions on dividends versus share buybacks and we had this experience when we have a consulting all our friends in the list.
And they were kind of symbols of dividends there was a tender on deploying back soon.
I'm gonna have to wait for all of them to you because it's just a lot of these questions a lot of people, saying well you attending this you're undervalued, whether Steve why don't you do a share buyback.
And I suppose we already said we have been dismissed share buybacks. It is still on the table we are under promising.
So over deliver.
As the year progresses.
And I think.
We actually went out to all of our largest shareholders.
But many shareholders I think it depends on where Youre domiciled, which you prefer.
Probably personal tax situation I think both are affected.
Clearly some people are much keener upon but the others. So that's why we're kind of leaving open the option that may be doing both but I can tell you that from our five largest shareholders world.
We should do dividend set of buybacks.
Got it.
I'd say amongst the rest of the shareholders.
Still the majority of people wanting dividends over buybacks, but we certainly hear your voices that share buybacks, especially if we continue to think our shares are undervalued or a viable way to make returns to shareholders and in some cases without incurring personal tax liabilities.
There's not a perfect answer to this.
I think we may look at doing both.
We do both you're not making either.
So I think it's unfortunately, it's a bit of a lose lose situation.
Again I think.
The majority of the majority of our shareholders and we communicated with first of all in favor of dividends over buybacks.
So there are no other questions on that hopefully bounce tunnels.
Yes, that's true.
Today's session and changing tools exploration oriented basin.
There was a question on <unk>.
In the event of a possible technical studies on the backlog.
And.
Fitness discoveries is it feasible to think about maybe it won't count will on the new 2024.
Yeah.
I would say before then.
We have a <unk> covering the whole block.
<unk>.
However, the entire block is never at a well drilled by us and when we can.
Look at that and we compare it to what we've seen over the venous graft discoveries, we see very similar with some prospects.
Especially now that the basin has been Derisked I think we're very keen to move forward as operator towards drilling a well there I don't think we need to shoot <unk> seismic I think we actually can move right into the drilling basins. So we do have a 60% partner.
<unk>.
And which is our total B E.
We need the discussions with them.
Weather for.
Echo Atlantic.
The timing of the funding for that.
Yeah.
My guess is that quite a bit so that's going to become a much more competitive place.
There may be other people outside of our box outside of our current.
Ownership groups that might be interested in coming into that product as well.
And there is a cushion disclose onshore simplify investor relations or go to prove to you first.
Actually all sort of what we had this quarter in our group. Please see because he say, Florida Investor Relations, but the question was also good friends with Investor Relations activities.
To tell the story, Yeah, I think obviously with Covid, we have been a bit hampered on them going out in the.
Meeting people face to face I think that's pretty much over now.
69, commercial flight to come here to London.
After my crude jams booster shot.
Okay.
Year to date this year I'm actually feeling quite good about travel.
Obviously the.
The World is opening up now.
We still have to be a bit careful.
I think the world is ready to move up so.
I am on Kozlova Tomorrow.
The management team.
The spare back one conference.
Individual investors there.
We're looking to.
The missing, Sweden, I'm looking to get back to Sweden and in the second half.
March.
A town Hall meeting solid months investors, there, but I think we are.
Really start gearing up I think the one thing we hear from our investors that we need to get out and tell the story a little better I think we've got a lot of the value in this company.
But some of it is not that easy to explain our whole portfolio exploration company things that just.
This is a complicated thing about how do we get value.
We found a big pile of Venus out what do we do going forward, how do we how do we give value to the shareholders.
I think.
It'll be good to get on the on the road in people face to face.
Talk through these issues.
Obviously, we've got a lot to talk about that where he worked for so long is thin glass with canyon companies and we go on to talk about Nigeria.
I want to talk about the Kenyan hopefully in the near future.
With our exploration program as well.
I still I'm looking for an acquisition.
I think there's a good chance in the first half of this year will come out.
Ian Sidetrack out at least one acquisition.
Once that comes to fruition.
On the road talking about that as well.
So I think the bottom line for Investor Relations as you know we need to.
<unk> been a little bit hampered by Covid to do that the way we'd like.
Turning now to get Us started.
Started meeting with investors explaining.
Explaining our story.
A bit better.
To answer this is Mike.
Email addresses available we'll have many many good calls with investors with institutional retail we do listen.
So if you send your comments always make sure that they get a troops and Pascal and Keith we would really like to have a constructive engagement with all our investors numerous at hospital big So please.
We won't hesitate please reach out and even while switching from physical in person. If you want to have a zoom or it seems to me is here with me to explain the results special seats does any.
Hum.
Thanks to all not clear to please reach out.
To help you understand better.
So yes, let's move to the next question.
On the one more as we want to sign it.
Acquisitions someone has said that the announced who mentioned free.
And the pipeline that we've.
We've mentioned C.
The Delta hedging is going down.
Right.
Having been doing acquisitions for the last 25 years or so you have to kiss a lot of frogs before you find the premiums.
No I think one of our acquisitions turned out to be a product that not really a perhaps.
We have a pipeline going Melanie we have dialogue, we still see our best.
<unk> is the major oil companies so pretty much every major oil company that has interest.
Interest in West Africa.
Continual dialogue.
Got to banks.
Thanks.
They're also a continuous dialogue so I think we're well aware of the opportunities on.
The majors are well aware of our desire to get into the right opportunities.
We'll keep we'll keep pushing these forward there'll becomes something that come forward, it's on that drop off.
I said I think I think there's a good chance to do a deal even at today's oil prices.
And I have to give some of that upside back to the sellers.
The last two.
Offers we put in actually kick.
Kickers to go back to the seller if oil prices stayed high which I think will make it easier for them to do a deal in today's market, we're not going to draw us buying.
Buying things on the 70 or $80 a barrel that's just not what we're trying to do that we.
We still have $60 oil is kind of our baseline that we're going to make money at $60 pumps.
Yeah.
While im quite bullish on oil price.
The last 20 years and you see what oil price does <unk> have to be.
[music] arises.
You always want to have.
Upside exposure to that as well.
Well, thank you Keith from Pascal.
Unfortunately, we're running out of time, but we have grown our sonobuoy. Please feel free to reach out to me my email and telephone number on the bottom of every press release still don't hesitate, which I will do all this answer your questions as soon as we can.
And dinos.
I hand, the call back to the whole Frazer.
Thank you. This concludes today's teleconference. We thank you for your participation you may disconnect your lines at this time.
[music].