Q3 2023 Africa Oil Corp Earnings Call
Hello, everyone. My name is Sandra will be your conference approach would stay.
At this time I would like to welcome everyone to the Africa oil third quarter 'twenty to 'twenty, three we soldier call and webcast.
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 would like to ask a question. During this time simply press star one one on your telephone keypad. If you would like to withdraw your question. Please press star one on one again, please know that.
Anytime participants in the West Coast comes up with their questions using the Q&A books under webcast interface. Please note that this event is being recorded the recording will be available for playback on the company's website I would now like to pass the meeting to Mr. Shahar Muni Africa's oil investor relations unconventional and monitor.
Please go ahead Mr are many.
Thank you Sandra.
Management. Thank you for joining us today for first quarter <unk> results.
We are grateful for your interest and support on the call today, we have president and CEO.
Okay.
Our CFO Mr Costa on Nickelodeon.
To start with a brief introduction before we presented our coaches highlights and what it means.
Ill cover Africa investment case on the outlook before we go into our Q&A session.
Well first I would like to remind everyone that remarks made during this session are subject to forward looking statements.
Which involve significant risk factors and assumptions and have been fully described in the company's continuous disclosure reports.
The information discussed is made as of today's date some time in Africa oil assumes no obligation to update.
Days unless as required by law. The company is complete financial statements and related MD&A are available on the company's website and on SEDAR.
<unk>, we're ready for you.
Yes.
Thank you very much.
So first of all it is a pleasure to be presenting.
My first results.
And.
And just looking in this webcast.
First of all a little bit about myself you have read my.
Resume if you like on the.
The new website design originated geologist.
I went into Exxon for many many years traveled all around the world.
Georgia and geophysics.
<unk> joins our traditional defenses that grew very very significantly across the board last night.
I don't have a very interesting adventure working to keep our cost in Europe.
And then did some private equity investing.
And ultimately.
As recently I ended up as a senior vice President and the BG group.
Im working on.
In the Americas and also in.
In Europe.
And then.
On a series of other private equity based.
Nice deals I'm also a nonexecutive director of <unk>.
Hotel, we rebase.
Reproduction interest in in.
In Peru side pretty much.
Every basin all across.
And big companies, and small companies and NRC and independence and private accuracy.
Investor.
So Peter just 12 months now.
It has been an incredibly busy four months since I took over.
Performs a very routine review of the business.
We.
We have been managing with some very significant stakeholder relationships, we've presented our business plans.
We've reorganized the organization, including bringing in some very key new recruits.
Interesting.
Senior Vice President business development.
In House General Counsel, who will be starting in the next the next week or so.
So I think the slide says what attracted me to this company to come in.
As in past.
These outstanding existing assets.
Sure.
Immediate job a little bit of a reorganization.
Assets underlying the business.
Highest quarter.
In addition, then we have a extremely strong.
Balance sheet with Pascal will talk to us a little bit make sure all our production, which we will describe the lessor is at the highest.
Last net backs and in addition, it within the portfolio, we've got some low risk.
Internal rates of return development opportunities in Nigeria, but thats, what I was saying the crowd.
This is our interest in the Orange space, which are truly world class investment opportunities and I'll be talking in detail about those a little later enrollment.
In the presentation.
The next slide.
And so.
Moreover, we achieved that this quarter.
Okay.
Extremely strong operational results the Venus Onex test result was positive.
We have described and as you can see on that.
The bullets on the rights outside the operator has indicated that this would be.
I feel that will be developed in.
In the future.
Production, we have seen an.
An increase in our average production.
For the first time since Q2, 2021 personnel will talk a little bit more about that.
<unk> convergent <unk> won't see seven into.
The new petroleum in Nigeria, we received a very significant dividends from prime of $62 5 million.
Existing this quarter.
Our cash balance to range from one $5 million, which.
Clearly underpins our corporate bank.
Shape so.
So passing now Pascal to deal with those.
Financial issues and production issues.
We just talked briefly touch on our collection performance.
Comparison with our guide.
Guidance and.
We've been very encouraged culture since side in the first quarter in terms of predictions since their last quarter.
2000 to 3000 about a hopefully a competitor.
'twenty two.
<unk> thousand 400 <unk>.
Equivalence services.
Great outcome, and they're efficient and due to our successful drilling campaign on their own engine.
When you guys have been relocated to our contractors on one producer and we can start to see.
Effectiveness.
Since joining campaign.
Yes.
Sure.
Production.
Which means that we are considering.
And the.
Thank you.
Our onshore production guidance.
Also reading at the reference on that.
The first one.
The growth rate.
So again, we expect this.
Production to continue to increase but at the analyst day.
Sure.
So these guys are just showing the <unk>.
Emulation.
Actual results our net income over the last quarters.
Posted a $47 million.
Net income this.
This quarter.
Which had been in <unk>.
$7 million.
The net profit.
One exceptional item in Q2 mentioned this culture is.
We didn't add $6 5 million of our shelves into Atlantic due to the drop in Shanghai.
We've also.
Post to essentially a $1 million.
Exceptional adjustments due to the release of tax as you know in my judgment.
You too.
Thanks Mitch.
Although I may want to seven two API.
Which is also the reason why in Q2, we had an exceptionally good quarter.
Quarter with the release of <unk>.
<unk>.
Deferred tax lately, but at that time it was in relation to a megawatt for SD Wan.
When we obtain license extension.
In <unk>, we started.
And.
Which trigger that.
Switch to the Pis and <unk>.
That's right.
Otherwise I think this quarter is being pretty stable compared to the us.
Our history of operation.
Results.
Consistent with our products over the last quarters.
Slide 10, this slide shows the evolution of our cash position on the web.
I would simply say here is that we received as Andre mentioned borrowing capacity under our.
Since the beginning of the year.
Within our means.
The priority for the company is going to return cash to our shareholders via outlets in Japan, all of our share buyback program. So overall.
We distributed 13 million dollar opex of our shareholders.
And the first nine months of this year.
Other priority for the company has been to continue to.
Investing into impacts on.
I understand have a corner on all of the cash flows we've received.
Yes.
A key priority for.
For the company to withstand a corner.
Any impact on.
We've also.
Christophe.
<unk> equity interest in getting some impact during these equity raises we are not that you want going on at this time.
All the things you mentioned.
Started to reinvest in an area that's all good news.
$17 million.
As we have.
Investing in exploration Equatorial Guinea, Amazon franchise together.
We have also some exceptional items as you've seen.
All of those items, which is mainly.
A settlement.
It's Bob.
So local tax authorities.
Yes.
So I think thats.
It's on the slides next next falling yet so I just wanted to give a.
Pick up days on where we were in December.
<unk> in Nigeria, So as you as you know and we mentioned before we have obtained.
Yes.
License extension behind my one question. So dish has been moved into our into the TIAA, Texas.
<unk> speaking.
We are now three production licenses instead of one right now.
In Myanmar.
One question.
John.
I'm covering one feels so why don't I pull while imaging.
Great.
And as I, just mentioned on line along with Kevin.
We have.
Hello, sorry to voluntarily converted to <unk>. Therefore, we are.
Now on corporate tax patient match, 30, percents, which replaces.
I guess what are your implicit tax system, which was that 50% so.
A significant benefit for the company.
Going forwards.
It's a bonus on this broke out also decided to request an extension of the license.
Youre welcome going on this is Colgate next our next milestone for us.
Thank you in terms of voice sales has been a consistent quarter.
<unk>.
I already mentioned that we changed our marketing approach.
Last year.
Last year in which.
Given the significant benefits of the company, we consistently have sold at.
At a price which is a.
Striking analogy of trends this quarter.
We can call it a bit by by timings and so we saw those cargoes at the beginning of the quarter and yoga class action.
Actually increased at the end of the call Joe So that's why.
The slides a slight difference between them.
At the same price we have obtained four cargoes on the average ticket, but overall since we put this new marketing.
And pricing in Q3 2022, whereby we are basically sitting.
Overall cargo spot.
The oil price goes down below sometimes special it's fixed.
Which would trigger.
Offsetting that cash.
Just on the App and the.
And we'll show occasions since when you put.
New market place. So we can see the difference.
In terms of.
Values that we all get along since Q3 2022 compared to what we were getting.
We have a trough before Q3 in 2022, so it will go in service.
Senior and can benefit from <unk>.
Sure.
Next slide thank you.
So in terms of financial performance, primarily also being very consistent.
Tim Busch in terms of EBITDAX and cash flow.
We believe that these are nevertheless.
Nevertheless, it does.
On cash flow.
We remain within guidance.
Guidance.
So we'll look at sites.
Very good performance again, this quarter on time, and which is able to manage the annual bridge table.
Sure.
Net debt ratio strengths you could move to the next time.
This slide shows.
Net debt balance.
Just moments prime is on ESG.
Hey, rich.
It's been good.
Finance last quarter was the extension of RNA laundry assessing.
Cobalt has seen it yet, yes, hi counter level.
Even though so we have a.
Significant liquidity in both prime and level.
Level.
Very minimal.
Consolidated debt cable if you take care.
Turning to consideration together.
Next slide.
<unk>.
So what we'll do now is we'll have a look at.
Full closure.
I will describe how we're going to talk to over the.
The next several months the first thing is you're only going to see us focus on.
For assets.
The first is Nigeria, which will look at it in some detail.
Youll give me just a scholarship we started to spend money on.
And it's a very particular type of opportunities which is it.
Or is exploration.
Quick tie back.
Should we be successful you'll see a silica loss about Namibia and Youll also.
Look three before.
South Africa, so those tool.
Asset what we are focusing all of our intellectual horsepower on all of them.
Investment potential.
Over the next the next year and that is a significant refocus the way that we're looking at the business in terms of the finance the metrics.
And all of those metrics are made up.
We have to be reserves, nearly 56 million barrels we produce about 23000 barrels a day liquidity.
Liquidity of 376.
Five 1 million barrels and we've got near term catalysts.
A significant size.
And as we also I would add to that <unk>.
Three big pool basis, and we are returning capital via the dividend dividend stream and also a little bit more about buybacks later Rob.
So first of all let's go back and look at these assets and what they really rather than the way we summarized.
Owners.
And I think.
Perhaps you've been a little bit less than maybe all of you knew this.
But by not describe the sheer scale of the assets that we're invested in.
Three of the top five fields in Nigeria on the gross basis.
Doing.
320000 barrels a day.
The level of production to receive.
If you like the two operators, which is chevron.
Ill.
They're genuinely world class production production hubs.
We've got great Fortune.
The other thing about 62%.
The reserves are in the two P category, which means that we do not anticipate any significant.
Surprises in the in the subsurface of any.
Any significance.
And also the assets themselves on surface, which we will lap dsos have been.
<unk> well maintained.
Don't anticipate any significant changes.
<unk>.
In those in those assets.
Because of the extension of the license.
Infill drilling opportunities and we also have.
Now do.
EU tieback, which is going to be priority.
Which wouldn't have been.
Well if the license has been extended and we anticipate didn't get into that.
I think at the end at the end of next year, So I stress that again, the underlying production assets.
Very significant scale.
Operator by majors with excellent reservoir quality.
And I think youll see those through the portfolio.
Next slide.
Well I'm going to do is jump down.
So well aligned now considered to be.
What is developing into the emergence of the new petroleum products.
And it's been focused to date on the new.
In Namibia.
Which room Ritz hotel in shell.
With existing discoveries in the numbers on here on oil in place numbers.
Presented by the number of the international oil companies.
<unk> is $2 6 billion barrels that didnt place reserves Venus. According to that was $5 1 billion barrels of reserves Yonkers, two five unless the <unk> 3 billion.
So this is a province that is emerging.
It's not the first time I've seen them, such a province, because I was with AEG win.
With Petrobras and develops.
Space and sub salt plays which resulted in eventually.
So it is getting out there.
And so I have experience in the way that these plays to do.
Hello.
But we're going to do now is jumped down two blocks <unk> four.
Which is in the south is actually in South Africa.
Combined with our interest in venous.
In this new petroleum province, and Threep meaningful.
I'm extremely interesting block it is completely covered in three D. Seismic we all have the operator.
And we are going through the present time.
If you add the rigs are marching down to the.
A farm out process on.
On this.
As it says in the slides that we have P 60 prospective resources in that.
4 billion barrels of recoverable. So people often ask me, how we're giving up on exploration, we are not giving up on exploration. It just so happens that.
We have the existing exploration opportunities, which are really significant.
As I said, a farmout process.
And there is a.
High level of interest from major companies to come in to this.
And I would anticipate that.
Suddenly within 2024, hopefully wait before we will have completed a farm in into that.
That acreage now could come up too.
Our interest in <unk>.
And lead us into the fitness area.
What we actually hope golfs.
Thanks.
Yes.
I believe these are world class opportunity.
Venus as you see on the bullets on the right hand side.
Mackenzie have said 3 billion barrels of recoverable reserves go back.
Thinking about how many recoverable reserves, we've got at the moment, we have 55 six.
Have a <unk>, 31% interest in <unk>.
It impacted 6% in this.
Which would be the equivalent of us having 180 million barrels recoverable reserves, which is more than three times.
Yes, one three times the size of the reserves that we got at the moment. So this is an asset that we have to focus our attention on because it is a materiality yet to come to a company of our size, which we also have to touch all size, which is of critical importance to get right.
We also own the bulk because interest rates very large block.
Follow on exploration prospects.
We are currently drilling a well called <unk>, which is up to the north.
It's an unusual weather and that it is actually testing.
Hi, Fine then.
And then was accounted in the high <unk> in the business.
But it will also go through that.
The target the northern extension of.
So it's a dual objective.
We also.
Currently never which isn't on the slides.
Testing.
The appraisal.
Appraisal well and if you go back on and say this is a public websites too.
Zoom.
Yes.
Yes.
Going back to November.
And then click through you actually put the screen for each Matt.
You can click through November nine to 10 months left on I think it was.
You will see that there is a major flat.
Location Opex.
<unk> is then goes out because we're doing a buildup and then comes back on.
So we've tested.
Hydrocarbons to set up this out the Venus appraisal well.
The other thing though about.
And maybe the instrument isn't.
Three before we completely covered in three D seismic yet the southern parts of the book, which has two significant.
Prospects on it.
And South tomorrow as only covered by two D seismic it looks extremely attractive.
The three that you will be shots in the early parts of 2020, we're in a position where we've got the financial capacity to see.
With this opportunity until.
Understand.
<unk>.
We intend to have more activity.
Potential.
In terms of next year.
<unk> is going to become a very significant priority for us going forward in terms of capital allocation.
So a year ahead priorities then as I've said some of them.
And that we're going to focus on these core assets.
We've done it in trying to complete the final amounts above <unk> <unk> each.
<unk> 31 in EG.
And if anyone wants to see a little bit more about them, we do have those maps.
In the appendix, we're going to be extremely disciplined asset acquisition and an actual fact.
Asset any equity asset acquisition will be in blocks that were already or Ian.
Two examples that will be in areas, where we've got significant competitive advantage.
And we're going to focus on shareholder capital returns, we will maintain the base dividend policy and share buybacks, we will be initiating the option to do share buybacks, but we're in a very active stage at the moment.
Understanding what capital we will be meeting in the year ahead.
We will use the decision to stop share buybacks in parallel with understanding what our investment opportunities.
In 2024 will be solely focused on making significant returns for shareholders.
And with that I would like to conclude.
<unk>.
Also the two showed even to get us into Q&A.
Yes, so operator, Sandra backs here just to remind people of the.
Instructions for submitting questions.
Thank you.
To ask a question. Please press star one on one on your telephone.
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Sure.
There are no questions from the phone at this time, please continue with webcast questions. Please.
I will do so frankly as saundra actually one of our analyst to tell me that he will be traveling out to actually have a number of questions from him. So let's start off with <unk> and <unk>.
First question.
And my Julia.
There is an ongoing process as you see as well in the quarter regarding deepwater divestment part of particularly the Norwegian Sea.
<unk>.
And then Tim just wondering whether you have any comments on this process.
Steve's point about <unk>.
We.
We are aware of it.
<unk>.
The process and we are also.
Our interest in prime.
Do have a preemption rights.
On this block.
We will be reviewing exercising a preeminent much should that look an attractive investment opportunity.
For us we're not at that point person.
Preston side, but I stress it is a block.
That is of high interest to us it allows us to use.
I'll be El facility, which gives us significant competitive.
It's in an asset that we know.
And those are the types of assets that we want.
We'll be looking at very right.
Waiting to uptime.
Okay and second question from tumor.
Balance.
<unk> been talking about sit on NOI dos ethical with those guests.
Cash dividend from impacts.
Mobile will be used as a SaaS how much could it be returned to shareholders on how much it could be held for further investments to answer yes.
Yes sure.
We started just dividend.
<unk>, which has been most successfully restarted our share buyback program as well.
Of course, we will have some capital commitments.
And going forward.
Right.
In the top of our priorities.
Maximize yet Jerry.
Tests of our shareholders.
Thank you see you see about certain exceptional in buybacks.
Okay.
So much for low cost scale.
Another question is about the reorganization offset asset ownership.
And Roger.
And we do have.
Some people would argue it could reduce its structure do you have any views on.
We would like to say most of your aspirations around simplifying some of the other things.
The thing.
I think I said at the start the Africa oil.
Nasty assets.
<unk>.
Fantastic.
However, they are not optimal yet.
It's not.
So maybe it's not optimal to be a shareholder in our company.
Alright.
With the operators at the January level, and so we are looking at a whole series of ways to actually get the solvency.
Joey level.
Two principal assets as much area and in the new vehicles in Equatorial Guinea and the <unk>.
We are.
In that position.
They're all routes to achieving message in these two assets.
But you're absolutely right.
But it is convoluted.
It makes it very difficult sometimes.
That's.
Accurately understand the true value and maybe at the top of my priority list.
Pascal if I may.
Couple of questions on this front.
On the utilized by corporate facility.
People are all scheme, obviously theres a cost associated with this is this something that could be towards us and I'll discuss the strategic decision with.
But can you sort of I suppose the question is can you justify the cost of having this facility in place.
And today, it's for companies like Us, it's a pretty nice job of a syndicate of banks, you've got you're putting down. So I think we kept this group of four or five banks.
Now.
Two or three years and.
I think it's a good finish.
Financial discipline to keep the contact with these banks make sure that you're compliant setup covenants.
I'm not talking to you about <unk>, but also our financial covenants and each key Kincaid Gangst IP.
April to support Youre going forwards in case.
Specific M&A selection of what's to come.
Investment opportunity with some companies in our existing portfolio. So I think yes, it's worth the cost.
We are we outline again, 40% of the margin.
So.
It can be seen as significant but I don't think you saw significant when you consider that to be up two kilometer pipeline.
Available debt capacity as of today.
Very good.
Just a question from Christine.
While the economic standards will benchmark supposedly company six evaluation.
Acquisition opportunities.
This is a very good question, but it's been hours discussing this to have any views on.
Mccann opportunities.
The main the main crop.
<unk> would be.
Pathogen and.
I think we our strategy for patients.
Complying with a set of Prince pharma companies of course, we would run.
License.
The weighted.
Our weighted average cost of capital sensitivity as well.
But we don't have a pre defined set of toxic air payback times.
Okay.
What hurdles that would actually be mentioned all that to make sure.
M&A or acquisition.
Possible I think we already opened one five times.
Thank you.
Question on our capital expenditure guidance for 2023.
To remind participants steps in the range of 80 to 100 million U S dollars.
Could you are going to book the level could be for.
Nextgen.
And also what it could be for fourth quarter, because we've only spence.
$35 million without going into it so any views on the fourth quarter and also lithium hydroxide. That's correct. We have been behind capital expenditures, mainly because of scheduling dumbfounding that China, where it started late and so we are running at these days on this drilling campaign on the schedule, but that's not been done in 2023 would move sequential trends.
Nicole.
So to answer that question.
We are going to be quality.
Got it guidance in terms of capital expenditures in 2023, and I would say that.
2024 guidance would be in line with what.
For 2023.
And I think Alex it was a bit on fluids also for 2020 full guidance because that is a process underway.
Two ways and present this guidance in due course.
It could be early next year.
Q4 <unk>.
Additional color on the walls.
Fourth quarter.
So couple of questions.
The timeline for us to have.
Handle on.
Impacts budget for next year.
Is that something that is currently underway being analyzed.
Do you expect to have that information readily say early next year. So we rely on a younger alright. So of course as you can imagine provides such as such in this domain.
Usually.
Alright, just don't provide drive.
<unk> got a December glaucoma by the partners. So I think we will have to wait a bit before.
What would a normal.
Well I can just mention is that.
In terms of genius.
Todd.
In west.
Chuck.
They are trading we stood at the moment to go back to risk some of it is on the Gulf.
We don't expect to change.
Drilling scheme from next year.
But we keep two weeks.
Upon running for most of next year, which means that we expect.
Capital expenditure budgets and the same order of magnitude.
For some types of tranches right.
Thank you.
A question regarding this is Rob Mcleod level, probably the <unk>, Sweden about valuation on Nigeria.
We presented last year.
Basically same with high oil prices.
What could be.
The direction for the valuation of our maturing assets, if I may I'll tackle that.
What we presented is all to do with our Ni 51, one and one disclosure on that is a process underway and there will be a report with our offline Julien valuation.
February and March and we will gives us with our year end results obviously be inappropriate.
Sort of.
What that could be.
Just looking at this generally speaking Andrew Kansas Nigerian Pascal Roger do you have any views on what could be the main value drivers for broadly speaking of Nigeria.
I think the.
The main driver is finalized.
Our ability to maintain an increased production.
We've seen the first benefit of this.
And shape compounded this.
Sure.
We expect it to continue next year, especially with the drilling on that book, So I think that would be the number one driver.
Nation.
Next year.
Wonderful I don't think its also important to remind people pulled out.
Both women want to settle on one first we've actually reduced our effective tax rates can be solid enough, Nigeria, we should get sort of a publicity as one of the future restrictions.
Lower tax rates and tax rate when your competitors in places such as the UK.
Given the already complex.
There's a question here from Gora, not really like it because he says.
I guess, probably EG with a good price on European prices lower local prices.
I love your optimism, because obviously, we need to drill an exploration well, but assuming we are successful.
No.
Roger could you segment about <unk> 31.
Why don't we put it up.
The appendix and so if we can talk to us.
On the slide.
So this is a very interesting.
Opportunities.
The team is.
As identified.
It genuinely is infrastructure infrastructure led exploration opportunity because it is a block.
31 completely surrounds.
And LNG facility, which is significantly LH within it and so there are a whole series of.
What looked like gas prospects.
Seismic anomalies, which would be very short tieback to an existing.
Existing fees.
Infrastructure.
However in terms of gas pricing, we're not going to be getting European gas.
Gas prices.
It will be equivalent to what Andrew is being received by the operator.
The LNG facility.
At the present time in terms of the level of interest in this block.
It is the thing.
And frankly, it's been segment, we have a data room open in which we still have nine companies reviewing this.
This opportunity and they're not all small independents, such as such as ourselves. So this is a real opportunity.
Thats it.
<unk>.
Bring in by the team to come up with.
Yes.
But in terms of gas prices and the economics just assumes.
Process going into Christmas.
For some time.
So we're not going to be an off taker of LNG.
We've just feed for the LNG facility.
Roger you mentioned that it takes a roomful of EG 31, there are a number of questions. Both on the EG 31 small amounts on three before B, just wondering what could be possible timeline.
The hallmark priced us.
The exact timeline on EG 30 31.
Got it Ross.
But towards the end of December mid December.
But because there has been such a level of interest we're not going to get everyone through we've just extended deadline.
I believe is the first.
February.
So they're gonna have to extend that because there's too many people in the in terms of three before.
We have had.
We.
We haven't.
Significant discussions with one major already.
In that block.
Just falls into that takes an erosion.
Actually three of the majors have asked to come in.
And so that one is going to take a little bit more because I think it's worth.
Standing on the sidelines not leaping necessarily.
<unk>, because there hasnt been a sudden uptick in the level of interest in that.
Book.
And so I would say that.
That one I wanted to give it the time to get everything in I think is probably towards the end of the first quarter, probably depending on the level of <unk>.
Correct.
Question from Pizza Pizza dams.
Do you stay focused on Africa offshore could you consider all the jurisdictions not slide.
You've already answer that question lumpkins and quantify that by pushing as Tom <unk>.
To reiterate some of the existing portfolio.
The next 18 months.
This company is so much work to do.
On maximizing the value of this existing portfolio not going to see us jump into another country.
Big M&A.
Transaction until we've got.
This portfolio.
Maximum points.
Value realization.
Hi.
That points.
We will have a discussion with the board, where we take the company to two next.
There have been discussions about could we take it into two.
<unk> a massive notes.
Off the table for the next 18 months expect us to see focus solely on the.
Okay.
And one of our covering analysts Tom Eric has a question difficult months.
Are you considering opportunities or scenario what are you crudes acquired Inc.
You don't have to answer it.
In respect to impact.
I will be.
We very much were getting to the point, where something is going to happen in terms of.
The impact of <unk>.
Going to be getting the total budget through there will be another funding requirements.
It's an unusual.
Situations that are in fact, holding I've made it clear to you that we would like to stay.
There is a big process and so if we find that.
The outstanding offer comes in then we would we would exit.
I think there are going to be.
Changes if you like within the impacts demand accounts are exactly what they are going to be but we're looking at a whole series of options that range from selling the assets to increasing our interest disclaimers.
I'm sorry, that's all I can do this you can see.
So it's a fantastic asset we'd love it.
In love with it that would keep it forever.
We need to consider the best option for the shareholders.
Maximize optionality around us.
I'll still consider a question on the optical energy.
That we've given.
What is the rationale for us any views on that.
But the rationale there was just to provide short term liquidity.
Daniel Yes or no.
We know that.
The project in <unk>.
Each one is going to take a long time to develop.
I mean, we are not there yet in terms of.
Monetization. So I think this was just an option to give more time for <unk>.
Philips.
Monetization of the gas.
Gave them the next 12 months.
Thank you.
With the product.
Thank you very much for that.
Roger Backseat.
And.
It is also going to question, Kenny Alpine scenarios, where chefs field force on where the company could be four to five years with respect to Nigeria in payments.
You could say are required.
Quite a long.
Long time oriented.
Two five years.
Well I think that the.
What we've done.
In terms of them.
The premium in the business plan.
If you like a strategic direction.
Trying to create optionality. The first step is to maximize the value of.
The quality stuff that we already hold.
You will see as possibly cleaning up some of the other.
The other assets the peripheral assets.
And then once we get the <unk>.
Portfolio cleaned up as best we can we will then look at other strategic options.
Of those could be significantly trying to growth.
The business from this portfolio.
And we will look at a series of options. The board has not given us approval to do that we just won't this first step done.
If you'd like a crossroads in the road that we can then make the decision.
Judging what the market is doing what is the best way to create shareholder value going forward one of them significantly.
Bye bye.
M&A is not.
At the present time.
Terms of size.
This industry does have a materiality.
Interest at which you get significant increases in.
Evaluation metrics and.
<unk> got a long way to get to get that personally I would like to see as Kevin I'll leave it at that.
It's easier to a whole new way to monetize the company as it is we will decide.
Month's time.
On the license there's a question about <unk>.
For Swedish investors finish spreads.
And Roger when coming to stockholders through town halls.
Okay.
Yes.
Suraj.
I was going to get.
As part of your question.
We'll say that the as Kelvin.
50.
Invest.
Presentations over the.
We lost six six weeks, we attended the perimeter.
Conference and we have been.
Unbelievable.
This portfolio in terms of.
Tejas direction.
I committed so I will come to Stockholm to do at a town hall and the.
By the end of the fiscal single session. Yes, yes by the end of the first quarter, but you just have to give me a little bit of a stay of execution here because we are in a very active.
Situation there.
But Nigeria.
But.
Correct.
Maybe just focus on the team.
Alright good.
So we have mobile trends from Bloomberg intelligence.
Congratulations on a solid quarter and key for us.
<unk> supports that statement.
Any color on the timeframe for <unk> drilling.
Initial results for Raytheon also full speed as well.
So.
So if you go back to this zoom.
Website, focusing in on the Namibia offshore click on them on the Panama, which I think is on the bottlenecks select heat map you will see that.
The Venezuela has been tested.
In fact buildup.
<unk>.
We would expect to see results.
The impact in the next couple of.
We have some of that in terms of it.
When those are announced we're obviously in the clinic.
Both situations.
Unfortunate situations <unk>. They may not released the results until February capital markets day, but that hasn't been attached in terms of Monroe County.
I'm guessing it will be in the deeper both objectives into both objectives.
So in December.
So that is imminent as well, but again.
So our investors is really the operators of assets capsule Walmart capital markets. So they will do.
<unk> results.
Tentative February I think as always this importance of direct everyone to the operator.
So I encourage everyone to have that.
As a backstop takes for use on both legacy and Venus One Inc.
There is there is.
Another question or statement as maybe a critical statements.
In saying that we'll look at.
Asset market is very competitive and just point back to the old shows more aggressively.
Are you going to increase a lot of shareholder value.
I often will answer that.
Oh boy, if I heard.
The message.
One of the auctions.
Yes.
And of course, the products, you're really trying to think what we saw.
In terms of those investments yes.
Bookstore news will be a help to be balanced okay very very carefully.
Very good.
There's a lot of repeat questions, yes. So.
Operator are there any calls on them.
On the underlying.
I don't see any.
But could you just could you just wanted to.
Some of the opportunities just to see if anyone wants to ask a question.
As a reminder, if you wish to ask a question. Please press star one on one on your telephone.
The one on one if you wish to ask a question.
Okay, well look Kim.
It doesn't seem that anyone that raise their hands saundra.
Plenty of other questions on a month will be running out of time, so let's get back to the webcast.
Perhaps one for you Pascal in growing the company.
Debt financing in the operational cash flow under the preferred source of financing and what are your thoughts on leasing efficacy.
Is that the auction I think.
It's a good question.
If we were assuming that we are fully valued and I think it can be something that we would consider at the moment, we don't think back to the Champ ICT projects. So we would probably not go for an equity raise at the moment.
And yet in terms of the deal.
Insurance.
If we can favor cheap.
Cheaper sources of capital like the Prime all the airplanes.
<unk> actually getting those sites yesterday.
I think that would favor disruption just from a pure financial engineering perspective.
Very good.
Question on Kenya.
Is it a 100% behind months could be lingering liabilities of future.
Expenses.
Sort of exiting <unk>.
Projects.
I think we're coming up at the end of the beginning for <unk>.
Yes.
We have signed all of that with all of the documents and we are waiting for their content.
Neutral on the government.
That would be an important milestone.
Officially now we also have some said mid June.
So this is Don.
Of course, now we have to wind up.
Legal entities.
In order to be able to do so we need to pay rent.
Department of customs, So, yes, I mean, the answer we call say, yes, we are completely out of Kenya as of today, but most of that happening.
Yes.
Alright.
There's one question answer the answer is when do you expect going to be available. So soon after this presentation. This slide deck will be posted on our website.
The next 24 hours. So there will also be a recording of this webcast. So please keep an eye out for that if you wanted to go through it again.
So, let's see what else we are seeing.
Really gone through most of the questions.
Just to make sure that on haven't missed anything.
There is and of course, the one here on the fiscal regime in Nigeria.
Okay.
The reduction in the tax rate, which we covered in our third quarter MD&A and press release from fixing to coach.
Is that just for <unk>.
102 seven.
Pascal things important.
A refresher on what we did earlier this year as well.
So I would say, yes, it's very exciting for.
And when we obtain license extension on the O&M budget towards of course subject to us converting to the <unk>.
So today, we can say that both store and Thats all covered by substantial but they are.
Consistent with API, so on post close, but obviously, we are subject to Copa types of approaches.
Very good very good.
<unk>.
And there was a question on the oil.
Oil price hedging do you think <unk> strategy on hedging oil prices Monday is the optimal I think that's not quite a range because we don't actually edge when the prices.
A reminder on.
Marketing strategy.
Useful.
Yes.
And can it each time, we want to set a cargo we Michigan is set to specials.
Which is the <unk>.
Rich.
Claude curve at the moment, when we come to offtake cargo.
To which we take.
90%.
Discounts and we said basically.
So special for that for that cargo and then if any time between the moment, we keep the instruction in the moment in the Congo.
One month before the Calgary is actually uptick.
The oil price falls below that.
<unk> then you have to take care of Ken sale.
Go forward. So it's not exactly on making policy is not 100% perfect its not long ago.
I think we went into a production looks really lack of production.
But.
Thank you.
In.
At 12 months.
Market values fall, because he took voyage to get traction.
<unk> SaaS, which.
Basically potentially run into significant losses, if the oil price.
Continues to go up which is basically what happens.
In 2021 2022, when the when the oil price started to go up again.
60% to 70% of our calendar was sold forward.
Okay.
We touch anything yet.
Hedge losses.
But as you see from from mid.
Mid 2022, and the Mackenzie than we have in place.
Very efficient to track the outlet.
Brian So we are basically sitting to talk now we use a $4 protection.
The <unk> West you go down significantly.
So I think that that's a good collection not to answer questions.
If we were to increase leverage at prime level, and if we want your dream.
Maximize the new way that prime level, we would probably be asked to turn into a more robust hedging instrument.
So it could be declining stock options Bank productions, it could be it could be starting to towards again I'll may be yet more.
Sophisticated instruments like <unk>.
So.
I think we will look into that.
Besides you.
A large acquisition at prior naval and we decided to increase that much.
Good.
Pushup from Lenovo and longstanding shareholders.
And Mitch.
Anything you can say on the actual west <unk> launched the production from the three wells.
So accounting, but also this we haven't actually provided that level of detail as of now spring or in the process of coordinates.
Public statements with Prime operates so net ginsburg with us.
And that is a priority and we will get back.
On the level of detail as of now we cant go into that level of detail.
We don't want to.
<unk> relationships on step on anyone's tools, particularly in the oil price up.
And like all mindful that we've only got a minute will assume that.
So I propose that we finish here and I'll hand over back to the operator for the.
Finishing remarks.
Okay.
Well.
Nothing Roger do you want to say anything.
Thank you very much all for.
For attending.
And we look forward to seeing you on another west coast soon yes, and just to remind everyone that the recording of the webcast is available.
Give it another 24 hours I mean, we'd be on.
And as always please reach out to me.
Questions. Thank you so much for your time very grateful for your support and continuing interest in Africa oil on that note goodbye.
This.
Today's conference call. Thank you for participating you may now disconnect.
[music].