Q1 2025 Africa Oil Corp Earnings Call

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Laura: Hello everyone, my name is Laura. This time, I would like to welcome everyone Africa Oil's first quarter.

Laura: Hello, everyone. My name is Laura and I will be.

Speaker Change: So operator today.

Speaker Change: This time I would like to welcome everyone to Africa Oil's first quarter 2025 results presentation.

Speaker Change: <unk> has been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

Operator: After the speaker's remarks, there will be a like to ask a question, do Please note that any time participants on the webcast can submit the questions during the question button on the webcast interface.

Speaker Change: She would like to ask a question during this time simply crushed.

Speaker Change: And then the number one on your telephone.

Speaker Change: If you would like to withdraw your question. Please press star two Oh, okay.

Speaker Change: Please note any time participants all the calls.

Speaker Change: The questions during the question.

Speaker Change: And on the webcast interface.

Speaker Change: Please note this event is being recorded.

Operator: This recording will be available for playback only.

Speaker Change: The recording will be available for playback on the company's website.

Shahin Amini: We will now pass the meeting to Mr. Shahin. All head. Good morning, and thank you for joining us for Africa Oil Corporation's first quarter 2025 results presentation. My name is Shahin Amini. I'm head of investor relations and communications and I'm joined today by Roger Tucker, our president and CEO, Aldo Parasini, our CFO and Oliver Quinn, our chief commercial officer. We will begin with prepared remarks and then open the floor for questions. Before we start, I would like to remind everyone that this presentation contains forward-looking statements. These are based on current assumptions and expectations and involve risks and uncertainties that may cause actual results to differ materially.

Speaker Change: I'll now pass the meeting to me such a hain.

Speaker Change: Ethical head of Investor Relations. Please.

Speaker Change: Please spell a heightened stamina.

Speaker Change: Good morning, and thank you for joining us for optical oil Corporation's first quarter 2025 results presentation.

Michelle: Good morning, Michelle here.

Michelle: Head of Investor Relations and communications and I'm joined today by Ross <unk>, our president and CEO, although proceeding all CFO and all of the Queen Akshay commercial officer.

Michelle: We will begin with prepared remarks, and then open the floor for questions.

Michelle: Before we start I would like to remind everyone that this presentation contains forward looking statements.

Michelle: Based on current assumptions and expectations.

Michelle: Risks and uncertainties that may cause actual results to differ materially.

Shahin Amini: You can find a full discussion of these risks on our regulatory filings available on CDALPlus and on our website.

Michelle: You can find a full discussion of these risks on our regulatory filings available on SEDAR and on our website.

Shahin Amini: Before we turn to the financial and operational highlights for the quarter, I must also highlight that yesterday morning we announced a new brand identity for the company following the completion of prime amalgamation. This sets us on our way for the next phase of shareholder value delivery and growth.

Michelle: Before we turn to the financial and operational highlights for the quarter.

Michelle: I must also highlight that yesterday morning, we announced a new brand identity for the company following the completion of prime amalgamation.

Michelle: This sets us on our way for the next phase of shareholder value delivery on growth.

Shahin Amini: With that, I will hand over to Roger to share more on this exciting next chapter, and to walk you through what has been truly a transformative quarter for the company.

Michelle: With that I'll hand over to Roger to share more on this exciting next chapter and so we'll see through what has been truly a transformative quarter for the company.

Roger Tucker: Roger, we are ready for you, please go ahead. Thanks Shahin.

Roger: We are ready for you. Please go ahead.

Roger Tucker: Following the amalgamation of Prime, I'm proud to officially introduce our new corporate identity, Merin, which will take effect on Monday the 19th of May. The rebrand to Merin reflects a defining shift in our business. With the transformative deal now complete, we've doubled our reserves and production, taken direct control of Prime's balance sheet and significantly strengthened our cash flow profile. We've also streamlined our business structure and evolved into a full cycle E&P business, one that is focused, resilient and firmly committed to delivering strong and sustainable shareholder returns, complemented by our new enhanced payout policy.

Roger: Thanks, Sean.

Speaker Change: Following the amalgamation of crime I'm proud to efficiently introduce a new corporate identity mirror, which will take effect on Monday, the 19th of May.

Speaker Change: Rebranded some marin reflects a defining shifts in our business with the transformative deal now complete we doubled our reserves in production, taking direct control of primes balance sheet and significantly strengthened our cash flow profile. We have also streamlined our business structure and evolved into.

Speaker Change: Our full cycle E&P business, one that is focused resilient.

Speaker Change: I'm firmly committed to delivering strong and sustainable shareholder returns complemented by our new enhanced payout policy.

Roger Tucker: This is the right time for the change. We have refreshed board, a clear long-term strategy and a business that is fundamentally advanced.

Speaker Change: He is the right time for the change we have a refreshed board a clear long term strategy and a business that is fundamentally advanced I'm also pleased to bring on board.

Roger Tucker: I'm also pleased to bring aboard Aldo as our new Chief Financial Officer.

Roger Tucker: Starting 19th of May, our shares will trade under the new ticker MER on both the TSX and NASDAQ Stockholm, and our new website, MerrinInc.com, will go live to reflect our updated identity. Please note, this is an administrative change and shareholders don't need to take any action.

Speaker Change: As our new Chief Financial Officer.

Speaker Change: Starting 19th of May our shares will trade under the new ticker <unk>.

Speaker Change: On both the <unk> and NASDAQ stock.

Speaker Change: And our new websites Meroney Dot Com, we'll go live to reflect updated identity. Please note. This is an administrative change in shareholders don't need to take any action now, let's turn to the highlights of our first quarter 2025, moving to slide five.

Roger Tucker: Now let's turn to the highlights of our first quarter 2025, moving to slide five. I'm pleased to report a strong quarter reflecting continued momentum across our operation. We have maintained a strong balance sheet with significant liquidity headroom. We have continued to benefit from robust high net-backed production and benefited from premium Brent pricing. Our infill drilling program targeting short cycle, high return opportunities continue to support strong and reliable production. During the quarter, we lifted five cargoes out of the 12 expected for the year, achieving an average realized price of $79.50 per barrel, beating the average Brent price for the same period.

Speaker Change: I'm pleased to report a strong quarter, reflecting continued momentum across our operations.

Speaker Change: We have maintained a strong balance sheet with significant liquidity headroom, we have continued to benefit from robust high netback production and benefit benefited from premium Brent pricing.

Speaker Change: Our infill drilling program targeting short cycle high return opportunities continue to support strong and reliable production during the quarter, we lifted five cargoes out of the 12 expected for the year, achieving an average realized price of 79 and a half dollars back.

Speaker Change: Beating the average Brent price for the same period. This front loading of call. It goes higher oil prices have significantly reduced our oil price exposure for the remainder of the year.

Roger Tucker: This front-loading of cargoes at higher oil prices has significantly reduced our oil price exposure for the remainder of the year. The strong performance across our producing assets have enabled us to proactively reduce leverage and deliver on our plans for shareholder returns. During Q1 2025, we declared our first quarterly dividend of $25 million, and I am pleased that we have now declared the second quarterly dividend of $25 million for distribution next month. We ended the quarter with $428.4 million in cash and a net debt to EBITDAX ratio of just 0.3 times, a clear demonstration of our financial strength and disciplined approach to capital management.

Speaker Change: Our strong performance across our producing assets have enabled us to proactively reduce leverage and deliver on our plans for shareholder returns. During Q1 2025, we declared our first quarterly dividend of $25 million and I am pleased that we have now is that the second.

Speaker Change: Quarterly dividend of <unk> $25 million for distribution next months.

Speaker Change: <unk> ended the quarter with $428 $4 million in cash and a net debt to EBITDAX ratio of just <unk> three times, a clear demonstration of our financial strength and disciplined approach to capital management.

Roger Tucker: Altogether, this strong start to the year underscores the core strengths of our business, high quality producing assets, a strong balance sheet and a focused strategy centred on delivering meaningful sustainable returns to shareholders.

Speaker Change: Altogether this strong start to the year underscores the core strengths of our business.

Speaker Change: High quality producing assets, a strong balance sheet and our focused strategy centered on delivering meaningful sustainable returns to shareholders.

Roger Tucker: Now let's take a closer look at production performance for the quarter by moving to slide six. Looking over the past year, it is encouraging to see that our infill drilling is performing well, with Q1 2025 production down only about 2% compared to Q1 2024. The infill drilling program provides us with attractive short cycle and high return investment opportunities as we counter natural field declines. Average Q1 2025 working interest production of 33,400 barrels of oil equivalent per day was above the higher end of our full year guideline. At ACPO, strong delivery continued through the quarter, with the ACPO West wells producing above expectations and supporting steady volumes.

Speaker Change: Now, let's take a closer look at production performance for the quarter by moving to slide six.

Speaker Change: Looking over the past year. It is encouraging to see that our infill drilling is performing well with Q1 2025 production down only about 2% compared to Q1 2024.

Speaker Change: The infill drilling program provides us with attractive short cycle and high return investment opportunities as we count natural field declines.

Speaker Change: Average Q1 2025, working interest production of 33400 barrels of oil equivalent per day was above the higher end of our full year guidance.

Speaker Change: <unk> strong delivery continued through the quarter with the Expo west wells, producing above expectations and supporting steady volumes, we're planning additional activity in Q2, including a development well in our well intervention to sustain the momentum and manage natural decline.

Roger Tucker: We're planning additional activity in Q2, including a development well and a well intervention to sustain the momentum and manage natural decline. On Aegina, drilling resumed in January and led to the successful completion of two new production wells. Both are expected to come on stream in Q2 and will contribute to the stable production levels going forward. Operational uptime and efficiency at Aegina remain high, supporting reliable delivery. Agbami performed in line with expectations, with compressor maintenance completed as planned in the quarter. This is part of our broader strategy to maintain long-term asset integrity.

Speaker Change: On a Gina drilling resumed in January and led to the successful completion of two new production wells. Both are expected to come on stream in Q2, among contributes to the stable production levels going forward operational uptime and efficiency of Gina remain high supporting reliable deliver.

Speaker Change: Alright.

Speaker Change: At Balmy performed in line with expectations with compressor maintenance completed as planned in the quarter. This is part of our broader strategy to maintain long term asset integrity. Overall, our Q1 results demonstrate the strength of our core assets to continue to deliver reliably and all.

Roger Tucker: Overall, our Q1 results demonstrate the strength of our core assets that continue to deliver reliably and also present further upside potential, such as the ACPO Far East well, which I will cover later in this presentation.

Speaker Change: So present further upside potentials, such as the App, so far east well, which I'll cover later in this presentation with that so I will now hand over to Allen for the financial highlights.

Aldo Parasini: With that, I will now hand over to Aldo for the financial highlights. Thanks, Roger. Moving to Slide 7. In the first quarter, Prime completed five oil liftings with total sales of approximately five million barrels at an average realized price of $79.50. This compares favorably to the average dated brand price of $75.7.

Allen: Thanks, Roger moving to slide seven in the fourth.

Speaker Change: First quarter, Bryan completed five oil lifting with total sales up approximately 5 million barrels at an average realized price of $79 $5 per barrel.

Allen: This compares favorably to the average dated Brent price of $75 $7 per barrel, reflecting continued strength in our marketing and sales strategy.

Aldo Parasini: Looking ahead, seven cargoes remain scheduled for the balance of These four have already been triggered at an average dated brand price of $64.50. while the remaining three cargos are currently Combination of cheap sales in the first quarter and forward pricing on upcoming liftings has materially reduced oil price risk for As an illustration, even if Brent were to average $50 per barrel from the second quarter to the fourth quarter, the full average dated Brent price is expected to be approximately $1,000 per barrel. $7.00. that give us a solid platform for growth, cash flow generation. regardless of the near-term oil price.

Allen: Looking ahead.

Allen: Seven cargoes remains scheduled for the balance of the year.

Allen: Of these four have already been triggered at an average dated Brent price of $64 $5 per barrel, while the remaining three cargoes are currently unhedged.

Allen: The combination of achieved sales in the first quarter and forward pricing on napkins listings has materially reduced oil price risk for the year.

Allen: As an illustration, even if Brent were to average $50 per barrel from the second quarter to the fourth quarter. The full average dated Brent price is expected to be approximately $67 per barrel.

Allen: That gave us a solid platform for growth cash flow generation through 2025, regardless of the near term oil price environment.

Aldo Parasini: Let's move to slide 8 for a look.

Allen: Let's move to slide eight for a look at our financial headlines.

Aldo Parasini: First, let me remind you that the prime amalgamation was completed. Africa Oil's reported results are a high. first of January to 19 of March and then. So, for example, our reported revenue for the quarter is only for one cargo that was lifted post 19 of March. This was for... and our press release in the MDA. We have presented reconciliation tables to present summary income statements and cash flow statements as if the amalgamation had been completed. I think it is important to focus on EBITDA and cash flow items for the period on a consolidated basis. If the amalgamation had been completed on 1st of January...

Allen: First let me remind you that the primary mortgage nation was completed on 19th of March. So Africa oils reported results are a hybrid between the periods from first of January 19th of March and then through to the end of March.

Allen: So for example, our reported revenue for the quarter is only for one cargo that was lifted both 19th of March this was $476 million.

Allen: In our press release and MD&A, we have presented reconciliation tables to present, a summary income statement and cash flow statements.

Allen: <unk> had been completed on the first of January since when you fly.

Allen: I think it is important to focus on EBITDAX and cash flow items for the period on a consolidated basis.

Allen: As if the amalgamation had been completed on the first of January since 2005 in order to get a better feel for the performance of the underlying assets in our business.

Aldo Parasini: in order to get a better feel for the performance of the underlying asset. In the first quarter, we recorded an EBITDA of $142 million in cash flow from operations before working. which compares to capital expenditures of about. Our free cash flow before debt service and shareholder returns was... higher at approximately 100. payment of a loan.

Allen: For the first quarter, we recorded an EBITDAX of $142 million in cash flow from operations before working capital adjustments of about $100 million, which compares to capital expenditures of about $28 million.

Allen: Our free cash flow before debt service and shareholder returns was actually.

Allen: Higher at approximately 122 million, which included a 32 meter receipts from our investments and impacts and the repayment of a loan of African energy for four and a half million dollars.

Aldo Parasini: Looking ahead for the second will be the first quarterly period that we will report fully consolidated financial results and the reporting will be more. to slide nine for a closer look at the cash. Turning to cash management, we close the quarter with a cash balance of $428 million, a significant This is mostly driven by the amalgamation of Prime, which added $380 million in cash on completion. It highlights the immediate financial benefit of the transaction and puts Africa Oil in a much stronger liquidity position to support its shareholder returns and to deliver on our strategic objectives.

Allen: Looking ahead for the second quarter will be the first quarterly periods that we reported fully consolidated financial results and the reporting will be more straightforward.

Allen: Let's move to slide nine for a closer look at the cash movements during the theaters.

Allen: Turning to cash management, we closed the quarter with a cash balance of $428 million up significantly from $61 million at the end of 2024.

Allen: This is mostly driven by the amalgamation of Brian which added $380 million in cash on completion of the deal.

Allen: It highlights the immediate financial benefit of the transaction and puts Africa, you're in a much stronger liquidity position to support has shareholder returns and to deliver on our strategic objectives.

Aldo Parasini: During the quarter, we also received $60 million in distributions from Prime on the closing of the amalgamation and $32 million from our investee company. Given our strong liquidity position, we decided during the quarter to proactively reduce our RBL debt balance and pay down $130 million. take the outstanding balance down from seven. Continue this approach by making another repayment of $80 million post the end of the year. Share buybacks remain an important capital allocation option for the company, and during the quarter we executed $8.3 million in share repurchase. before pausing the program in March on completion of the prime deal and implementing the new Our shareholder return policy under this framework.

Allen: During the quarter. We also received 60 million in distributions from prime on the closing of the amalgamation and 32 million from RMB <unk> company impact.

Allen: Given our strong liquidity position, we decided during the quarter to proactively reduce our b L debt balance and paid down $130 million to take the outstanding balance down from 752 $620 million and reduced interest costs.

Allen: We continued this approach may making another repayment of $80 million post the end of the first quarter.

Allen: Share buybacks remain an important capital allocation option for the company and during the quarter, we executed $8 $3 million in share repurchase before pausing their program in March on completion of the prime deal and implementing the new capital allocation framework.

Allen: Our shareholder return policy under this framework is to distribute a minimum of $100 million per year in base dividend.

Aldo Parasini: contributes minimum of $100 million per year. As always, future dividend distributions and share repurchase are subject to customary consent and approvals including Overall, the first quarter reflects disciplined cash management, reinforcing our financial... provides a solid platform to deliver long-term value.

Allen: As always future dividend distributions and share repurchases are subject to customary consents and approvals, including board approval overall, the first quarter reflects disciplined cash management reinforcing our financial strength and provides a solid platform to deliver long term value to shareholders.

Aldo Parasini: Let's move to slide 10 for a quick look at our net. As part of the prime amalgamation, we have taken on the revolving RBL debt facility that provide us with liquidity at very competitive cost. We also gained solid relationships with a group of supportive lenders, which is a strategic advantage. As already mentioned, we have proactively repaid the outstanding balance to reduce interest payments, but if the need arises, there is scope to draw down under the available borrowing For now, the leveraging is a priority for us. We are also taking steps to cancel Africa Oil's undrawn stand-by corporate facility with a current availability amount of $65 million.

Let's move to slide 10 for a quick look at our net debt and balance sheet strength.

Allen: As part of the Prime amalgamation, we have taken on the revolving or B L debt facility that provides us with liquidity at very competitive costs. We also gained solid relationships with a group of supportive lenders, which is any strategic advantage for us.

Allen: As already mentioned, we have proactively repaid the outstanding balance to reduce interest payments, but if the need arises there is scope to drawdown under the available borrowing base.

Allen: We're now deleveraging is a priority for us.

We are also taking steps to cancel Africa's undrawn standby corporate facility with our current availability amount of $65 million.

Aldo Parasini: This was an important credit line for Africa Oil before the amalgamation, as there was a degree of uncertainty over the timing and quantum of prime dividend distribution, and this provided important liquidity headroom. However, as we now have full control of the Nigerian business, this facility is no longer required and we will save around $2 million in standby fees by cancelling. This is another positive benefit of the prime consolidation and highlights the cost synergy aspects of. At the end of the first quarter, our net debt stood at about $190 million, with an estimated net debt to EBITDAX of $0.32 billion.

Allen: This was an important credit lines for Africa, you'll before the amalgamation as there was a degree of uncertainty over the timing and quantum of prime dividend distributions and these provide important liquidity headroom.

Allen: However, as we now have full control of the Nigerian business. This facility is no longer required and we will save around $2 million in standby fees by canceling it this.

Allen: This is another positive benefit of the branch consolidation and highlights the cost synergy aspect of the deal at the end of the first quarter. Our net debt stood at about $190 million with an estimated net debt to EBITDAX of 0.3 times.

Aldo Parasini: This is significantly below our maximum target of one times and underscores the strength of our balance sheet and our capital allocation optionality as we look to execute our business strategy. On a final note, I want to share with you that the boring base availability amount is driven by the lower of the two cover ratios. These are Project Life Cooperation and Low Life Cooperation. In our case, the project life cover ratio is that driving the boring base, and therefore, the scope for increase once we move into a refinancing.

Allen: This is significantly below our maximum target of one times and underscores the strength of our balance sheet and our capital allocation Optionality as we look to execute our business strategy.

Allen: A final note I want to share with you that the borrowing base availability amount is driven by the lower of the two cover ratios.

Allen: Our project Life Corporation in low Light Corporation.

Allen: In our case the project life cover ratio is that driving the borrowing base and therefore de scoped for increase once we move into a refinancing exercise.

Roger Tucker: I will now hand over to Roger for the Thank you, Aldo. Now let's turn to the operational outlook for our Nigerian. We're committed to maximising value from our three deep water producing fields in Nigeria, working closely with our joint venture partners through a disciplined programme of drilling, optimisation and strategic investment. at Aegina to produce a well. successfully drilled in the first quarter and are expected to come on stream in the second. helping to support production volumes in the near term. At ACPO, a well-intervention and development Looking ahead, the JV is planning a pause in the drilling campaign during the fourth quarter of 2025.

Roger: Now hand over to Roger for the next slide.

Roger: Thank you al.

Roger: Now, let's turn to the operational outlook for our Nigerian assets, we're committed to maximizing value from our three deepwater producing fields in Nigeria working closely with our joint venture partners through a disciplined program drilling optimization and strategic investment at <unk>.

Roger: Donna two producing wells.

Roger: It was successfully drilled in the first quarter and are expected to come on stream in the second quarter.

Roger: Helping to support production volumes in the near term.

Roger: Ah well intervention and development wells are scheduled for the second quarter. Looking ahead. The JV is planning a pause in the drilling campaign during the fourth quarter of 2025 to allow time for detailed interpretation of new <unk> seismic data and recently drilled well results enabled.

Roger Tucker: to allow time for detailed interpretation of new 4D science. and recently drilled well results, enabling us to mature and prioritise future infill targets with greater precision.

Roger: Us to mature and prioritize future infill targets with greater precision.

Roger Tucker: In parallel, we're preparing to spur an infrastructure-led exploration. on the ACPO Far East prospect with estimated gross field resources of 100 million barrels of oil. and a projected cost of approximately $50 million. This well has the potential to add significant reserves and deliver near-term production through existing infrastructure. If it is a success.

Roger: In parallel we are preparing to spud infrastructure led exploration well.

Roger: Ex post far east prospect with estimated gross field resources of 100 million barrels of oil equivalent.

Roger: Projected cost of approximately $50 million. This well has a potential to add significant reserves and deliver near term production through existing infrastructure.

Roger Tucker: At Agbami, a full shutdown is planned for the fourth quarter as part of a wider maintenance programme aimed at sustaining long-term operations. For more information visit www.agbami.com Interpretation of 4D seismic data is ongoing to shape our next drilling phase, and we're progressing rig and equipment contracting ahead of the 2027 infill campaign. And finally, at Prairie, seismic analysis continues to help de-risk the upside. We've also re-engaged our feed. to explore ways to optimise the development and execution costs ahead of a future investment.

Roger: It is a success of course.

Roger: Bombing.

Roger: <unk> shutdown is planned for the fourth quarter as part of a wider maintenance program aimed at sustaining long term performance interpretation of <unk> seismic data is ongoing to shape, our next drilling phase.

Roger: Regressing rig and equipment contract ahead of the 2027 infill campaign and finally, a prey away seismic analysis continues to help de risk the upside resource potential.

Roger: We are also re engaged a feed contract to explore ways to optimize the development and execution costs ahead of future investment decisions I will now hand over to Oliver for a discussion on the outlook for our assets and the Orange basin in Equatorial Guinea.

Oliver Quinn: I will now hand over to Oliver for a discussion on the outlook for our assets in the Orange Basin and Equatorial Guinea. Thank you, Roger. Now let's move to slide 12. Offshore Namibia, the JV partners on Block 2913B and 2912 have continued the work on two fronts. On the first front, work continues to progress the Venus development project towards final investment. which is expected during first half of 2026. potential first oil in 2020. The operator is guided to a development scheme with up to 40 subsea wells, all tied back to an FPSO, and with a peak capacity output of 160,000 barrels of oil per day.

Oliver: Thank you Roger now, let's move to slide 12.

Oliver: Offshore Namibia, the JV partners on block 29, 13 B in 2912 has continued to work on two fronts.

Oliver: On the first front work continues to progress the Venus development project towards final investment decision, which is expected during first half of 2026 and with potential first oil in 2029.

Oliver: The operator has guided to a development scheme with up to 40 subsea wells all tied back to an Sps so.

Oliver: Peak capacity output of 160000 barrels of oil per day.

Oliver Quinn: Once online, Venus has the potential to produce for greater than 20 years, and as such will deliver a long term sustainable cash. The second front in Namibia is a follow-on exploration activity on the block. The third campaign with the drilling of the Tamboti and Maroola wells completed in May, with the results now being studied ahead of anticipated further exploration drilling in Q4 2025. The current drilling break will allow time to incorporate the recent well results and allow the next well targets to be further optimized. We currently expect the campaign to commence with a well on the Olympe prospect, and it is worth noting that this will test a slightly different geological concept.

Oliver: Once online peanuts has the potential to produce for greater than 20 years and as such will deliver a long term sustainable cash flows of the company.

Oliver: The second front and then maybe as a follow on exploration activity on the blocks.

Oliver: The third campaign with the drilling of the Tambo Tien Maroulis wells completed in May with our results now being studied ahead of anticipated further exploration drilling in Q4 2025.

Oliver: Current drilling break will allow time to incorporate the recent well results and allow the next well targets to be further optimized.

Oliver: We currently expect the campaign to commence with a well on the Olympia prospect.

Oliver: It is worth noting that this will test a slightly different geological concept with a four way structural closure and as such presents a different prospect to the stratigraphic traps are being something a ruler.

Oliver Quinn: four-way structural closure and as such presents a different prospect to the stratigraphic traps have been Of course, and as a reminder, we have the benefit of retaining exposure to these high-impact wells at no upfront cost and no pressure on our balance sheet as all the costs, exploration and development, will be carried through to first commercial production.

Oliver: Of course, and as a reminder, we have the benefit of retaining exposure to these high impact wells at no upfront cost.

Pressure on our balance sheet is all the costs exploration and development will be carried through to the first commercial production from the two blocks.

Oliver Quinn: Staying in the Orange Basin but moving to South Africa, last September we were granted an environmental authorisation for the drilling of up to five exploration wells and the remaining regulatory process is continuing to move forward at pace. With that, we currently expect to see the first exploration well on Block 3B, 4B in 2026. And note the operator has identified Nyla, a prospect located in the northwest of the license area, as a potential first drilling target. In terms of capital spend, we are also carried for 1 to 2 exploration wealth through the farm down deal that we closed last year with Total Energies and Qatar Energy.

Oliver: Staying in the Orange basin, but moving to South Africa last September we were granted an environmental authorization for the drilling of up to five exploration wells on the remaining regulatory process is continuing to move forward at pace.

Oliver: With that we currently expect to see the first exploration well on block three before we in 2026.

Oliver: The operator has identified Nailah prospect located in the northwest of the license area as a potential first drilling target.

Oliver: In terms of capital spend we are also carried for one or two exploration wells through the farm down deal that we closed last year with total energies in Qatar LNG.

Oliver Quinn: Now turning to Equatorial Guinea, we continue to progress discussions with potential partners on blocks EG18 and EG31, with the aim of completing the farm out process by the end of Q3 this year. These blocks offer a compelling mix of opportunity. On EG18, we've identified a large Cretaceous Age basing floor fan prospect, geologically similar to plagues we're pursuing in Namibia and South Africa. Meanwhile, EG31 lies in shallow water, close to existing LNG infrastructure, and contains several gas-prone prospects, with clear commercial short-cycle development potential in the success If we are successful in securing farming partners and subject to the necessary approvals, the newly formed joint ventures could look to drill as early as late 2026 or into 2026.

Oliver: Okay.

Oliver: Now turning to Equatorial Guinea, we continue to progress discussions with potential partners on blocks <unk> and EG 31, with the aim of completing the farm out process by the end of Q3 this year.

Oliver: These blocks offer a compelling mix of opportunities on.

Oliver: <unk>, we've identified a large Cretaceous age basin floor fan prospect geologically similar to plays we're pursuing in Namibia and South Africa.

Oliver: Meanwhile, EG 31 lies in shallow water close to existing LNG infrastructure and contained several gas prone prospects with clear commercial soft short cycle development potential in the success case.

Oliver: If we are successful in securing farm in partners and subject to the necessary approvals the newly formed joint ventures could look to drill as early as late 2026 are into 2027.

Oliver Quinn: I think critically, and as always, we remain disciplined in our approach to exploration capital, and we will not proceed with exploration drilling on a sole risk basis if we're unable to farm down on exceptions.

Oliver: I think critically and as always we remain disciplined in our approach to exploration capital and we will not proceed with exploration drilling on a sole risk basis, if we're unable to farm down on acceptable terms.

Oliver Quinn: We'll now move to slide 30. And this is a slide that that we've shown in several quarterly results recently. But we want to reiterate our capital allocation framework, which hasn't changed. And in particular, reiterate our disciplined approach that underpins our business plan, and therefore delivery of our long term strategy. At the heart of this is prudent balance sheet management, sustainable leverage and a strong commitment to shareholder return. As part of that, we're maintaining a minimum liquidity of $150 million and keeping net debt to EBITDA below one time. Two key metrics that will guide our approach to financial discipline going forward, both of which have been met in Q1.

Oliver: We will now move to slide 13.

Oliver: And this is a slide that we've shown in several quarter results recently, but we want to reiterate.

Oliver: Our capital allocation framework, which hasn't changed.

Oliver: Particular, I reiterate our disciplined approach that underpins our business plan and therefore delivery of our long term strategy.

Oliver: At the heart of this is a prudent balance sheet management sustainable leverage on our strong commitment to shareholder returns.

Oliver: As part of that we're maintaining a minimum liquidity of $150 million and keeping net debt to EBITDA below one times two key metrics that will guide our approach to financial discipline going forward, both of which have been met in Q1.

Oliver Quinn: We've also significantly increased our base dividends to at least $100 million annually, sending a clear signal of confidence in our outlook and the quality of our cash flow generation. The base dividend level continues to reflect our commitment to striking the right balance between delivering meaningful and consistent returns to shareholders today and equally investing in future growth to drive long-term value in the Our approach balances strong shareholder returns with funded growth, such as our exposure to the carried Venus development in Namibia. With a streamlined business structure, strong liquidity and the completion of the prime transaction, we're now in a great position to selectively pursue new opportunities focused on producing cash generating assets.

Oliver: We've also significantly increased our base dividends to at least $100 million annually, sending a clear signal of confidence in our outlook on the quality of our cash flow generation.

Oliver: The base dividend level continues to reflect our commitment to striking the right balance between.

Oliver: Delivering meaningful and consistent returns to shareholders today and equally investing in future growth to drive long term value in the business.

Oliver: Our approach balances strong shareholder returns with funded growth such as our exposure to the carried Venus development in Namibia.

Oliver: With the streamline business structure strong liquidity and the completion of the Prime transaction. We're now in a great position to selectively pursue new opportunities focused on producing cash generating assets and and as we always reiterate within strict strategic financial and operational criteria.

Oliver Quinn: And as we always reiterate within strict strategic financial and operational criteria.

Roger Tucker: Thank you, and I'll now hand you back over to Roger. Thank you Oliver, it has been a great start to the year for the company. We closed the prime deal that has doubled our production. significantly raised our cash profile and given us greater financial resilience.

Oliver: Thank you and I'll now hand, you back over to Roger.

Roger: Thank you Oliver.

Roger: And it's been a great start to the year for the company.

Roger: We closed the <unk> deal that has doubled our production significantly raised our cash profile and given us greater financial resilience, we have paid a dividend of <unk> $25 million. The first tranche of our newly enhanced payout policy.

Roger Tucker: We have paid a dividend of $25 million, the first tranche of our newly enhanced payout policy under our new capital framework, delivering on our commitment to our shareholders. With our robust liquidity position, high margin production, and fully funded organic growth pipeline, we believe we offer a compelling balance between delivering shareholder value and pursuing sustainable growth. Our business is built on solid strategic foundations, and we are well placed within the independent exploration and production. to capitalise on emerging opportunities.

Roger: New capital framework, delivering on our commitments to our shareholders with our robust liquidity position high margin production and fully funded organic growth pipeline. We believe we offer a compelling balance between delivering shareholder value and pursuing sustained.

Roger: <unk> growth.

Roger: Business is built on solid strategic foundations, and we are well placed within the independent exploration and production space to capitalize on emerging opportunities.

Roger Tucker: Thank you very much for your attention.

Operator: And let's open up the Q&A. Thank you, Dr. Tucker. We will now begin.

Roger: Thank you very much for your attention and let's open up the Q&A session.

Roger: Okay.

Speaker Change: Thank you Dr. Kerr, Illinois will begin the Q&A session.

Operator: Start followed by the number 1 on your telephone. change your mind and wish We will now take our first.

Speaker Change: If you would like to ask a question. Please press star followed by the number one on your telephone.

Speaker Change: If you change your mind and wish to withdraw your question you May Press Star two.

Speaker Change: We'll pause for a moment to allow questions to queue. Thank you.

Nelson: We will now take our first question from total survey Nelson of SB, One and your line is open. Please go ahead.

Teodor Sveen: Good morning, everyone. Thanks for taking my questions. A few questions from me.

Speaker Change: Good morning, everyone and thanks for taking my questions a few questions for me.

Aldo Parasini: First, on production costs going forward. I understand that there was an overlift in Q1, such that the production costs this quarter also reflect that overlift. But I just wonder if you could guide some on the expected production costs on a consolidated basis going forward.

Nelson: First of all.

Nelson: And of course going forward.

Understand that there was some overlap.

Nelson: In the table such that the production cost this quarter also way to almost.

That's all it but I guess on the guidance.

Nelson: On the expected production local solar at the base case going forward.

Oliver Quinn: Second question that is on Venus, promising to see that that progresses. I just wonder when should we expect an updated resource estimate from the operators? Should we expect anything around FID? And my last and final question there is, what's your current production, i.e. in the period after end of Q1? Thanks.

Nelson: Second question is on the Venus promising to see that progress.

Nelson: When should we expect.

Nelson: Stay to the resource estimate from the.

Nelson: Operators, we should've expected looking around Friday.

Nelson: And my last and final question is whats your current production ie in periods after end of Q1.

Teodor Sveen: Thank you very much Teodor.

Aldo Parasini: So your first question on production costs, Aldo do you want to have a first stab at that please? Yes. So there are two things. One, in the first quarter, you can see that we had a slightly higher production cost. Those are comprised of some one-off costs that were incurred in the first quarter of the year, mainly in relation to plant maintenance in the Aegina FPSO and the GTC overhaul in the Agbami FPSO. Towards the whole year, we expect to achieve similar production costs than previous periods, with the exception that we have this turnaround maintenance in Agbami towards the end of the year, which will then incur in additional production costs in relation to that maintenance.

Nelson: Okay.

Nelson: Thank you very much too, though so your first question on production costs.

Nelson: Although if you want to have a first.

Nelson: How about that please.

Nelson: Yes.

Nelson: There are two things one in the first quarter you can see that we have had a slightly higher production cost.

Nelson: Those are comprised of some one off costs that work.

Nelson: In the first quarter of the year, mainly in relation to a planned maintenance in the <unk> DSO.

Nelson: And the GTC overhaul, India Goodbye, I mean Sps so.

Nelson: The whole year, we expect to achieve similar predictions cost than previous periods with the exception that we have this turnaround maintenance in a balmy towards the end of the year, which we would then incur in additional production cost in relation to that maintain us but.

Aldo Parasini: But on a running business basis, we expect just a slight increase compared to the previous periods.

Nelson: I'll now running business basis, we expect just a slight increase compared to the previous periods.

Oliver Quinn: And the next question from Teodor was, and perhaps we could put this to Oliver, in terms of an updated resource reserves report on Venus, can you share any views on that? Yeah, yeah, thanks, Shahin. So I think, I think we take a step back on the on the project timeline. I think the first observation, which is not new, is that It's got four wells on Venus, so we regard it as fully appraised, so there's no more drilling to be done to tighten resource numbers, if you like, at this point. The project has therefore moved into pre-front-end engineering and design, which is as you'd expect.

Nelson: And.

Speaker Change: The next question from Tiago was an obstacle for this to all of us.

Speaker Change: In terms of an update resource reserves report on Venus can you share any views on that.

Speaker Change: Yeah. Thanks, James So I think I think if you take a step back on the on the project timeline I think the first.

<unk>, which is not new is that.

Speaker Change: It's got four wells on venous. So we regard it as fully priced so there's no more drilling to be done to tightened resource numbers. If you like at this point.

Speaker Change: The project is therefore moved in.

Speaker Change: Our free front end engineering and design, which is as you would expect.

Oliver Quinn: That will move... through kind of into the front end engineering design itself and then into a final investment decision, which again, we said we anticipate early in 26, with some optimism that that might that might come forward, but planning purposes, that's in 26. What we anticipate is that as we mature through feed, those resource numbers will become more widely known. I think it's fair to say that Total Energies, as a large-scale company, doesn't typically release those early in a project cycle. So I think it's something we'll look to move towards this year, but they will, in terms of the release, will go in tandem with the project maturation through to FID.

Speaker Change: That will move.

Speaker Change: Through kind of into the front end engineering design itself I ran into a final investment decision, which again, we said we anticipate earlier.

Speaker Change: Early in 2006, with some optimism that that might that might come forward planning purposes. That's in 'twenty six.

Speaker Change: Within that frame I think there's a couple of components in terms of news flow and how information will come out I think the most important is just hitting those milestones in the project so fee because obviously in this environment critical from a.

Speaker Change: Final cost perspective, so you can kind of understand the final economics of the development.

And of course to the question on depending that is resource level. So I think.

Speaker Change: What we anticipate is that as we mature through fee those results numbers will become.

Speaker Change: More widely no I think it's fair to say that to tell that its use as a large scale company doesn't typically released those early in the project cycle. So I think it's something we will look to move towards this year, but they will in terms of the release will go in tandem with the project Maturations ratio.

Oliver Quinn: The third question was on the current production and Teodor, I think your question was what was like the exit rate for Q3, sorry Q1. I basically on that basis, I mean we've got to be quite careful because if you just look at one particular week, there can be variations but we are probably based on the data I have in front of me, we are probably looking around 32,000 BOEs per day on a working interest basis but again, there can be variations on that. It's important to emphasize that production is in line with our expectations and as we have reiterated in our financial reporting, the full year guidance remains unchanged.

Speaker Change: The first question was on the current production Thiago answering your question was what was the exit rate for Q3, sorry Q1.

Speaker Change: I basically on that basis.

Speaker Change: I mean, it's going to be quite careful because if you just look at one particular wage there can be variations. So we are probably based on the data on having funds I mean, we are probably looking at around 32000 Boe's per day on a working interest.

Speaker Change: But again, there can be variations on that.

Speaker Change: And to emphasize that.

Speaker Change: Production is in line with our expectations and as we have reiterated in our financial reporting the full year guidance remains unchanged.

Teodor Sveen: I'm going to come back to you to see if you have any follow-on questions. Yeah, well, thank you for that. Just back on the production cost, it's a fair estimate $60 million approximately per quarter, IFRS production cost, assuming no over or underlift. Can you repeat that number again, please? $60 million dollars per quarter. It is a fair estimate, and yes, I think that's probably on the conservative side, but a fair estimate. Yes. Okay, perfect.

Speaker Change: Going to come back to see if you have any follow on questions.

Speaker Change: Thank you for that just back on the production cost.

Walker: It's a fair estimate to $6 million approximately Walker Odyssey production as you may know.

Walker: Can you repeat that number again please.

Walker: $60 million per quarter.

Okay.

Walker: But it is a fair estimates.

Walker: Yes.

Teodor Sveen: Thanks, that's all from me. Thank you very much.

Walker: Probably on the conservative side, but a fair estimate.

Operator: Have a great weekend. Great to hear from you. Thank you.

Walker: Yes, Okay perfect. Thanks, that's all for me. Thank you very much have a great great to hear from you.

Operator: Once again, as a reminder, please press star 1 to ask a question. For the moment, thank you. Thank you.

Walker: Thank you for that question.

Walker: Okay.

Walker: Thank you once again.

Walker: Please press star one to ask a question, we'll pause for a further moment. Thank you.

Walker: Okay.

Operator: We will now move on. Questions submitted via the.

Walker: Okay.

Okay.

Walker: Okay.

Walker: Thank you we will now move on to <unk>.

Shahin Amini: Hand the call over to Mr. Shahin. Please go ahead, Mr. Amini. Thank you very much. We do have quite a few questions submitted email and webcast. And we're going to go to Aldo on a number of questions regarding the Q1 numbers. The first one is actually on the guidance. It is. You have reaffirmed guidance based on Brent price of $75 per barrel, that's the full year average price. Yes, Brent is trading at around $65.

Shane: Questions submitted via the webcast platform I will now hand, the call over to Mr. Shane Please.

Speaker Change: Please go ahead Mr <unk>.

Speaker Change: Very much we do have quite a few question and submit says email on webcast.

Speaker Change: And we're going to go on a number of questions regarding the Q1 numbers.

Speaker Change: The first one is actually on the guidance.

Speaker Change: You have reaffirmed guidance based on current price of $75 per barrel, that's the full year average price yes.

Aldo Parasini: How long would Brent need to continue to trade at these lower levels before you amend guidance? Okay, thank you, Shahin. Yeah, we have provided the sensitivity to our cash flow from operations guidance to look at lower average oil price of $65 per barrel. So considering that the first five cargoes lifted throughout the first quarter of 2025, we achieved an average sales price of $79.5 per barrel. And then four cargoes out of the seven liftings we expect for the rest of the year are hatched through a fixed date Brent of $64.5 per barrel. Therefore, even if we had Brent at $50 per barrel, for example, for the remaining three unhatched cargoes, we would still achieve a full year average price of $65 per barrel.

Speaker Change: Yes, Brent is trading at around $65, how long would brand needs to continue to trade at these lower levels before your <unk> guidance.

Speaker Change: Okay. Thank you Shane yes, we have provided a sensitivity to our cash flow from operations guidance to look at lower average oil price of $65 per barrel. So considering that the first five cargoes lifted throughout the first quarter of 2025, we achieved an average sales price of $79 $5.

Speaker Change: Per barrel.

Speaker Change: And then for cargoes out of the seven lease terms, we expect for the rest of the year are hedged through fixed dates Brent of $64 five.

Speaker Change: Per barrel, therefore, even if we had brent.

Speaker Change: Brent at $50 per barrel for example for the remaining three unhedged cargos. It would still achieved a full year average price of $65 per barrel.

Aldo Parasini: So that considering the average price of $67 and the sensitivity we have provided with our guidance, we would still expect to achieve and be within the guidance for cash flow from operations.

Speaker Change: Considering.

Speaker Change: The average price of 67 and the sensitivity we have provided our guidance, we would still expect to achieve and B. We're seeing they kept the guidance for cash flow from operations.

Aldo Parasini: Thank you.

Aldo Parasini: Second question, again, on the financial statements. We reported production costs of 51.2 million, and that is for the period from 19th of March to 31st of March. Why was this so high for that short period? And I think it's important to remember that we are still reporting, the first quarter is still considered equity pickup from 1st of January to March 19, in relation to the investment in Prime and the closing of the Burj, the completion of the Prime deal. So the cost of $41.9 million relates only to the period from 19 of March to the end of March.

Speaker Change: Thank you second question again on the financial statements, we reported a production cost of $61 2 million.

Speaker Change: That is for the period from launch and so much. So firstly of course of March and why it was so high for that short periods.

Speaker Change: Okay.

Speaker Change: It's important to remember that we are still reporting the first quarter is still considered.

Speaker Change: Equity pick up from first of January to March 19 relation to the investment in prime and the closing of the Birch.

Speaker Change: <unk> one of the prime deal.

Speaker Change: So the cost of $41 $9 million relates only to the periods from 19th of March to the end of March So thats the variation of the younger under lift under an over lifting position.

Aldo Parasini: So that's the variation of the under and overlifting position throughout the quarter. So the adjustment of $41.9 reflects the difference between the cargo that we lift post-amalgamation and the average production for that period.

Speaker Change: The quarter, so the adjustment of $41 nine reflects the difference between the cargo that we lift post amalgamation and the average predictions for that period.

Aldo Parasini: And the follow-on related question is, when will you start reporting fully consolidated reports and stop the equity method of accounting? We stopped doing that from 19th of March, yeah, and for the next quarters we expect the constructed numbers to look the same as our underlying financial numbers, Shahin, so that will go away from the second quarter onwards. So it will be a lot more straightforward, the equity method is behind us, it will be a lot more transparency, which was one of the strategic reasons and rationale for doing this deal. That is correct, yeah. I think we will see that.

Speaker Change: And a follow on related question is when.

Speaker Change: When will you start reporting fully consolidated reports.

Speaker Change: Stop the equity method of accounting, we stopped doing that from the 19th of March.

Speaker Change: For the next quarters, we expect the constructed.

Speaker Change: Numbers to look the same as our underlying financials number shining so that that will go away from the second quarter cohorts. So it will be a lot more straightforward. The equity method is behind us it would be a lot more transparency, which was one of the strategic reasons and rationale for doing the scale that is correct. Thank you very much.

Oliver Quinn: Thank you very much, Alzo. A couple of questions on Orange Basin, offshore Namibia and South Africa.

Speaker Change: A couple of questions on the Orange Basin offshore Namibia, South Africa, if I may I want to put those to you Oliver.

Oliver Quinn: If I may, I want to put those to you, Oliver.

Oliver Quinn: The first one is, what do you make of Total Energy's recent engagement with the Namibian authorities, supposedly around fiscal terms? Yeah, I think we, of course, we saw those reports in the media. So I think, you know, we're not surprised by that. This is a very large scale project. It's the first, we think will be the first project, deepwater project in Namibia. So, you know, it's of strategic importance to the investors, but of course, to the country as well. So I think we're reassured to see that the Total Energy CEO was actually in Namibia, met with the President and other ministers, which is a really important sign of importance of the project.

Speaker Change: The first one is what do you make of hotel images resets engagement within their maybe authorities reported supposedly around fiscal cuts.

Speaker Change: Yes, I think we of course, we sold those.

Speaker Change: What's in the media so I think we're not surprised by that.

Speaker Change: Very large scale project is the first we think it will be the first project deepwater project in Namibia. So it's a strategic importance to the investors, but of course to the country as well. So I think we're reassured to see that the <unk> was actually in Namibia met.

Oliver Quinn: I think within that, and I think the statements that were attributed there were around, you know, it's very deep water depth, 3,000 meters. We're clearly in a macro sense, you know, the world is more challenging than in price terms than it was last year. So I think it's natural that there'll be engagement around the fiscals and ensuring that the project's designed with those circumstances in mind. So I think, you know, the commitment, the visit and some of the statements made very, very encouraging to the pace of the project.

Speaker Change: Met with the President I know the Minister is which is a really important sign.

Speaker Change: And so the project I think we did not and I think the statements that will attribute to that were around its very deepwater that 3000 meters were clearly a micro sense the.

Speaker Change: Well it is more challenging than in price terms than it was last year. So I think it's natural that there'll be engagement around the physicals.

Speaker Change: And ensuring that the project's designed.

Speaker Change: Circumstances in mind, so I think the commitment the visit and some of the statements made very very encouraging so the pace of the project.

Oliver Quinn: Thank you very much, Oliver.

Oliver Quinn: Actually, another follow-on question on 3B4B, which is the South African side of Orange Basin. In terms of the timing for potential first exploration, well, any thoughts you can share on that? Yes, I think, firstly, our guidance remains, you know, 2026 is our planning assumption. And I think we covered it in the presentation, but we're in the midst of the environmental regulatory permit process. So the permit has been issued to drill up to five wells on the block, which is good. And there is, of course, a challenge process in South Africa. And we're going through that challenge process now.

Speaker Change: Okay. Thank you very much all of our actually another follow up question on three before B, which is the south African side of <unk>.

Speaker Change: Orange Basin.

Speaker Change: Terms of the timing for a potential first exploration well any thoughts you can share on that yes, I think firstly our guidance remains.

Speaker Change: 2026, as a planning assumption.

Speaker Change: And I think we.

Speaker Change: We covered it in the presentation, but we're in the.

Speaker Change: The environmental regulatory.

Speaker Change: Process. So those permit has been issued to drill five wells.

Speaker Change: On the block which is good.

Oliver Quinn: So there's a couple of milestones coming up this year, which I think will will point to the ultimate timing of the well. But for planning purposes, we remain focused on on 2026 with the operator.

Speaker Change: And there is of course, a challenge process in South Africa by going through that challenge process. Now. So there's a couple of milestones coming up this year, which I think will will point to the ultimate timing of the wealth planning purposes, we remain focused on 2026 with the operator.

Oliver Quinn: Thank you very much.

Roger Tucker: Roger, a couple of questions on strategy.

Roger: Thanks very much Roger.

Roger Tucker: So with the recent volatility in oil and gas prices, are you seeing more opportunities or do you see the M&A market changing in response? We're not seeing anything material at the present time, but our strategy remains the same. We'll be extremely selective in what we go for, and actually we're in no rush at all. We don't need to rush into anything, but we haven't noticed a significant change in the market landscape thus far.

Roger: Couple of questions on strategy so.

Roger: With the recent volatility in oil and gas prices are you seeing more opportunities or do you see the M&A market changing in response.

Roger: We're not seeing anything material.

Roger: Of the present present time, but our strategy remains the same it will be extremely selective in what we are we go for and actually we're in no rush.

Roger: No need to rush into it.

Roger: But we haven't noticed a significant change in the market landscape thus far.

Roger Tucker: And what are your criteria for the right M&A deals for the company? It has to be accretive. to shareholders. It also, I think, as I've said many times before, we're an organization which is driven from the rocks up rather than the spreadsheet down.

Roger: And what are your criteria for the right M&A deals for the company.

Roger: It would be accretive.

Roger: Two to shareholders. It also I think as I've said many times before.

Roger: Organization, which is driven from the rocks up rather than the spreadsheet down. So if we do anything it has to be into an asset.

Roger Tucker: So if we do anything, it has to be into an asset that actually matches the existing portfolio that we have got, and if we do anything, it will be into a high-quality asset.

Roger: Actually matches the existing portfolios that we have that we have.

Roger: And if we do anything it will be into a high quality high quality asset.

Roger Tucker: Very good, and in terms of regions, production of oil versus gas, operator versus non-operator, offshore versus onshore? Obviously, with the name change, Marin, there is a sort of an implied opportunity there that we're not necessarily going to be focused uniquely on Africa and we're not necessarily going to be uniquely focused on oil. The fundamental thing is that we will maximize all of the information and contacts that we have got and we do have some significant additional contacts via the relationship with the shareholding of BTG within that Latin American region. We've not made any decision to move anywhere and with the management team that we have got, we would indeed consider potentially taking an operatorship if it was exactly the right opportunity.

Roger: Very good.

Roger: In terms of regions production of oil versus gas operated versus non operated offshore versus onshore.

Roger: With the name change.

Roger: Marin there is sort of an implied.

Roger: Opportunities.

Roger: Not necessarily going to be focused uniquely on Africa.

Roger: We're not necessarily going to be uniquely focused on oil.

Roger: The fundamental thing is that we will maximize.

Roger: All of the.

Roger: Information and context that we have got and we do have some significant additional com.

Roger: Context.

Roger: The relationship with some of the shareholding at BTG within the Latin American region, we've not made any decision to move move.

Roger: Move anywhere.

Roger: The management team that we have Cox.

Roger: Wouldn't each consider potentially taking an operational shift if it was exactly the right opportunity.

Roger Tucker: And you mentioned a BTG Paxoal choosing variable with the next question, which is what level of engagement do you have with BTG, what are their objectives and is there strategic alignment considering that they're the largest shareholder in the market? We've obviously worked with BTG for, you know, five years or so in the prime asset. And you'll note that both Hugh Jenkins and Edwin Nieves were on the prime board, so we know these people extremely well. And it's a relationship that's been built over a five-year period. Obviously if you're going to do a transaction such as this, you have to have a shared vision for what the world offers and how this sector is going to evolve.

Roger: And you mentioned what pieces you put 12 shoes in very well with the next question, which is what level of engagement you have with BCG what are the objectives.

Roger: Cyclic alignments and considering that the largest shareholding merit.

Roger: We've obviously worked with.

Roger: BTG pool.

Roger: Five years or so.

Roger: In the prime assets, so and you'll note.

Speaker Change: Both SKU Jenkins and Edwin.

Roger: We're wrong prior.

Speaker Change: Prime Board, So we know who these people extremely extremely well.

Speaker Change: And it's a relationship that's been built over five five year period.

Obviously, if you're going to do a transaction such as this you have to have a shared vision for what the what the World office and how this sector is going to evolve.

Roger Tucker: And they indeed do have a similar view of the way the sector will evolve. And we look forward to attempting to grow this vehicle alongside our key cornerstone investor in BTG Paxoal.

Speaker Change: And they indeed do have the similar view of the way the sector will that will evolve and we look forward to attempting to grow this vehicle alongside.

Roger Tucker: Thank you.

Speaker Change: Key cornerstone investor BTG.

Aldo Parasini: Question for Aldo. You still have a significant cash balance despite the repayments in Q1. Why have you not paid down more of the RBL facilities? Yeah, we also noted, Shahin, during the discussions that we have made the second payment to the RBL in the post. the end of the first quarter, so bringing down the current drawdown to $540 million.

Speaker Change: BTG Pactual.

Speaker Change: Thank you.

Speaker Change: Question for Aldo.

Speaker Change: We still have a significant cash balance despite the.

Speaker Change: The repayments in Q1.

Speaker Change: Why have you not pay down more of the RBS facility.

Speaker Change: We also noted shine during the.

Speaker Change: The discussions that we have made a second payment to <unk>.

Speaker Change: Post.

Speaker Change: The end of the first quarter, so bringing down the current draw down to $540 million.

Aldo Parasini: And as part of the Africa Oil Prime integration, we are reviewing the group's structure, cash and the cash management activities of the group, including the working capital requirements at the different subsidiary levels. The idea is to find the most tax-efficient way to move the cash where it is needed. Continue to pay down debt to reduce interest expenses remains a priority for us, and we will balance that with the appropriate cash manage as we go.

Speaker Change: And that's part of the African Youll Prime integration, we are reviewing the group's strict cash and the cash management activities of the group, including the working capital requirements at the different subsidiary levels.

Speaker Change: To find the most tax efficient way to move the cash where it's needed.

Speaker Change: Continue to pay down debt to reduce interest expenses remains a priority for us and we will balance that with the appropriate cash manage as we go.

Oliver Quinn: And as part of our new capital allocation framework, there is the statements about the scope for supplementary dividends and or share buybacks.

Speaker Change: Okay.

Speaker Change: As possible, our new capital allocation framework there is the statements about the scope for.

Oliver Quinn: Alvar, would you want to share your views on that from a high level? Yes, as part of the amalgamation of prime, there was a policy that was agreed and makes part of the overall strategy of the group. And that remains unchanged and there remains a policy that we will follow as we go. The distribution of the 50% annual free cash flow net of the base dividend remains a part of that policy. So there has been no change to the policy. We will consider throughout the year the free cash flow and the numbers as we move.

Speaker Change: Supplementary dividends or share buybacks, although we don't want to share your views on.

Speaker Change: On that from a high level.

Speaker Change: Yes.

Speaker Change: As part of the amalgamation of Brian There was a policy that was agreed and makes part of the overall strategy of the group and that remains unchanged and that remains a policy that we will follow as we grow the distribution of the 50% annual free cash flow net of the base dividend.

Speaker Change: <unk> are part of that policy. So there has been no change to the policy, we will consider throughout the year.

Aldo Parasini: We need to understand how the numbers will perform in the following quarters of the year and we'll have active discussions within the management team and with the board on how and if we would make additional distributions. So we need also to take into account always debt repayments, interest expenses and other needs of the group going forward. So we will consider the policy carefully as we go and will always be subject to the board's discretion.

Speaker Change: Free cash flow and the numbers as we move we need to understand.

Speaker Change: The numbers will perform in the following quarters of the year and we will have active discussions we have diminished we think the management team and with the board.

Speaker Change: On how and if we would make additional distributions. So we need also to take into account as always.

Speaker Change: Debt repayments interest expenses and other needs of the group going forward. So.

Speaker Change: We will consider the Polish carefully as we go and will always be subject to the board discretion.

Aldo Parasini: Excellent. Thank you.

Oliver Quinn: Let's turn back to Oliver for a number of questions. And that is on Equatorial Guinea. Can you share your thoughts on how the process is, this is our farm down process for the two blocks offshore, Equatorial Guinea, what is the likely timeline before there could be material updates for the market? Yeah, so the farm down process is ongoing for the two positions we own there, which are very different, as we described in the presentation, so you have EG 18, which is a very, very large deep water, you know, basin floor fan, similar to much of the prolific oil discoveries along West Africa.

Speaker Change: Excellent. Thank you so all of it for a number of questions.

Speaker Change: As on Equatorial Guinea.

Speaker Change: Can you share your thoughts on how the process is this is a farm down process for the two blocks offshore.

Speaker Change: So again, what is the likely timeline before that could be material updates.

Speaker Change: Marcus.

Marcus: Yeah. So the farm down process is ongoing for two physicians, we haven't that which are very different as we described in the presentation. So you have <unk>, which is a very very large deepwater.

Speaker Change: Basin floor fan.

Oliver Quinn: And then in the shallow water you have EG 31, which is a gas-focused, you know, gas-fueled We're in the process of running a farm down process to bring in partners for both. We currently have effectively an 80% participating interest in the licenses, and we'll be seeking to bring at least one partner in for a material piece of equity.

Speaker Change: Similar to much of the prolific oil discoveries in West Africa.

Speaker Change: And then in the shallow water <unk> said before.

Speaker Change: Gas focus.

Speaker Change: Sure.

Speaker Change: All of which is actually very very short distance from the EG LNG facility, which we believe has has a reasonable I'll, let jennifer any gas projects. So two very different things, but in short we are in the process of running a farm down process to bring in partners for both.

Speaker Change: We currently have effectively 90% participating interest in the licenses.

Oliver Quinn: I think there is, you know, if you start particularly with the deepwater large scale, I think it's a particularly interesting block technically. But further than that, of course, what we're seeing in the market, despite some of the short term headwinds, is a lot of the larger EMPs and the majors actually seeking to grow and extend their reserve space. And that's a trend that's obviously changed in some cases in the last few years. But therefore, we're seeing quite a lot of appetite to review the blocks. In terms of timing, you know, there's always a balance between getting lots of people through a process and ensuring that people that you think are kind of credible, frankly, from an execution perspective.

Speaker Change: And we'll be seeking to bring at least one partner waiting for a material piece of equity.

Speaker Change: There is stopped particularly with deepwater large scale.

Speaker Change: I think it's particularly interesting block technically but further than that of course, what we're seeing in the market. Despite some of the short term headwinds is a lot of the larger e&ps and the majors actually seeking to grow and extend their reserve space and that's a trend. That's obviously changed some cases in the law.

Speaker Change: Last few years.

Speaker Change: Therefore, we're seeing quite so a lot of appetite to review the blocks.

Speaker Change: Timing.

Speaker Change: There's always a balance between getting almost equal thorough process and ensuring that people think.

Oliver Quinn: And so, we will look to close it somewhere through the third quarter, fourth quarter this year, so that we end the year with a clear position on the blocks. As we've said in the presentation, again, you know, this is exciting and interesting and potentially high reward, but again, it goes back to our capital discipline in the sense that we will not allocate significant capital to frontier exploration. It doesn't mean we don't believe in it. It means we're being disciplined on the spend.

Speaker Change: Credible frankly from an execution perspective.

Speaker Change: So we will look to close it somewhat through the third quarter fourth quarter. This year. So that we ended the year with a clear position on the blocks.

Speaker Change: We've said in the presentation again.

Speaker Change: As exciting and interesting and.

Speaker Change: Potentially high reward, but again it goes back to our capital discipline in the sense that we will file the case significant capital frontier exploration. It doesn't mean, we don't believe in it means of being disciplined on the spec Okay, where it goes you want the appointment of our successful farm down of block III before we lost year. Since then obviously, we've seen more volatility in the markets.

Oliver Quinn: Okay, very good. You were the points man for our successful farm down of Block 3 before we last year. And since then, obviously, we've seen more volatility in the markets. Have you seen any differences since doing that deal last year?

Oliver Quinn: I think you almost have to make a differentiation with the Orange Basin. So I think, you know, it remains a very, very exciting basin, it remains very early days. Of course, we've seen multiple discoveries, including those that we're involved in. So look, I think the appetite for South Africa is large in the sense that the Orange Basin is untested in South Africa. But of course, almost two thirds of the basin actually sits within South Africa. So I think we're seeing strong appetite for the basin. I think from our perspective, we're very happy with our position because, of course, we've got Namibia costs fully covered to first commercial production and in South Africa, again, we'd hope to get through, you know, up to two exploration wells in that block without any capital commitment.

Speaker Change: Have you seen any differences.

Speaker Change: The last year.

Speaker Change: I think you almost have to make a differentiation with the Orange basin. So I think.

Speaker Change: It remains very very exciting based on it remains very early days of course, we've seen multiple discoveries, including those that were involved in so.

Speaker Change: Look I think the appetite for South Africa as large in the sense that the Orange Basin is untested South Africa.

Speaker Change: But of course, almost two thirds of the face of it actually sits within South Africa. So I think we're seeing strong appetite for the basin I think from our perspective.

Speaker Change: We're very happy with our position because of course, we've got in Namibia.

Speaker Change: Let me cover the first commercial production in South Africa again, we'd hope to get through to two exploration wells in that block without any capital commitment. So I think very happy with that position.

Oliver Quinn: So I think, you know, very happy with that position.

Oliver Quinn: And again, the next 12, 18 months, pretty exciting, actually, in terms of getting results. Okay, and as you said, Orange Basin is very exciting, there was a recent success Rhino.

Speaker Change: And again in the next 12 to 18 months pretty exciting actually in terms of getting results.

Speaker Change: Okay.

Oliver Quinn: One of the questions we've received is, is this Rhino discovery has any implications for what Africa Oil or our partners may be doing in the basin in the near term or longer term? Well, I think it's always nice to see success in the basin for yourself or someone else. I think, you know, no surprise that discoveries continue to be made. There is a prolific source rock, prolific reservoir system here. So I think, I think we'll, you know, we'll see more, which is great for Namibia and hopefully South Africa. Again, from our perspective, I think, you know, we're very, very glad to be partnered with through impact with Total Energies and Qatar Energy and Venus, because that is moving at pace to first oil.

Speaker Change: As you said Orange basin is very exciting there was a recent success Ryan one of the questions we've received.

Speaker Change: Is this one of discovery has any implications for Africa.

Speaker Change: Africa, All partners may be doing in the basin in the near term or longer term.

Speaker Change: It's always nice to see success in the basin for yourself or someone else I think no surprise.

Speaker Change: With the discoveries continued to be made there was a prolific source rock prolific reservoir system here. So I think I think we will we will see more which is great and then maybe or hopefully South Africa again from our perspective I think we're very very glad to be partnered with through impact with total energies in Qatar LNG and Venus because that is moving at pace to first oil.

Oliver Quinn: And of course, while exploration success is very exciting, it's the production and cash flow that we look forward to. So great for the countries, but I think, you know, encouraging for the basin, but in our perspective, again, very happy with the portfolio we're invested in. Okay, very good.

Speaker Change: And of course, while exploration success is very exciting it's the production and cash flow that we look forward to great.

Speaker Change: Great for the country, but I think encouraging for the basin, but in our perspective again very happy with the portfolio where it best.

Aldo Parasini: Thank you. A couple of questions on the dividend distributions. One is, can you maintain the dividends at current oil prices, or could there be discussions around lowering the payouts if this lower oil price persists? And would you consider inorganic growth if there are interesting opportunities arise in this oil price scenario?

Speaker Change: Okay very good. Thank you a couple of questions on the dividend distributions and one is can you maintain the dividends at current oil prices.

Speaker Change: Or could there be discussions around lowering the payoffs if this lower oil price persists.

Speaker Change: And would you consider inorganic growth.

Roger Tucker: So I think first if we could go to Aldo to share your views and perhaps Roger you want to add some thoughts on that as well. All right. In terms of the dividend payments, we are comfortable with the $100 million dividend payments on an annual basis. And you can see we have declared the second dividend to be paid in the next 30 days or so. So considering our hedging strategy, considering the strong cash flow coming out of Nigeria, we are still committed to distribute $100 million on an annual basis, Okay. Very good.

Speaker Change: <unk> opportunities arise in this oil price scenario. So I think first if we go to Aldo.

Speaker Change: So youll views are perhaps Roger you want to add some.

Speaker Change: So it's on us as well.

Speaker Change: Alright in terms of the dividend payments, we have we are comfortable with the $100 million dividend payments on an annual basis.

Speaker Change: And you can see we have declared a second.

Speaker Change: Dividend to be paid.

Speaker Change: The next 30 days or so so considering our hedging strategy considering the strong cash flow.

Speaker Change: Out of Nigeria.

Roger Tucker: And Roger, the question then had a second part, which was lower oil prices and opportunities in the M&A. I suppose that is a benefit for someone with a strong financial... Possibly, yeah. I mean, the not all owners of assets have the same balance sheet as us. But we've not seen any significant change in what. happening in the in the market and I think that the effects of the prices that we're seeing at the moment, not all companies believe that this is going to continue for an awful long time and it needs to shake out a little bit.

Speaker Change: Two committed to distribute $100 million.

Speaker Change: Annual basis Shang.

Speaker Change: Okay very good Roger question, Tim had a second cost, which was a lower oil prices and opportunities in the M&A.

Speaker Change: The benefit for someone with our strong financials.

Speaker Change: Possibly yes.

Speaker Change: <unk>.

Speaker Change: Not all of it.

Speaker Change: Owners of assets have the same balance sheet.

Speaker Change: As us.

Speaker Change: But we don't see any significant change.

Speaker Change: Sure.

Speaker Change: It's happening in the.

Speaker Change: In the market.

Speaker Change: I think that the effects of the prices that we're seeing at the moment.

Speaker Change: Not all companies believe that this is going to continue for an awful long time and it needs to shake out a little.

Roger Tucker: We're at a position of flux in the in the market at the moment but we're not rushing into anything at the moment.

Speaker Change: We're at a position of flux in the market at the moment, but we're not rushing into anything at the moment.

Aldo Parasini: Okay and there's a question, there's an investor asking whether we can give a long-term schedule of the quarterly dividends in terms of record dates, payment dates and so on. Although I suppose that's not practical because every single dividend requires board approval. Is that correct? That is correct and we're also subject to the minimum amount of days under the stock exchanges that we need to comply with Shahin. So yeah. But it's fair to say that we are aspirate, well certainly our plan is to continue doing a quarterly distribution which would line up quite well with our quarterly reporting.

Speaker Change: And there was a question it doesn't analyst asking whether we can give along some schedule of the quarterly dividends in terms of record dates pay.

Speaker Change: Payment breaks and so on.

Speaker Change: So I suppose that's not practical because every single day with them requires board approval is that correct that is correct and we also subject to the minimum amount of days under the stock exchanges that we need to comply with schein.

Speaker Change: Yes.

Speaker Change: It's fair to say that we are aspirate well certainly our plan is to continue doing it quarterly.

Aldo Parasini: That is correct. Very good.

Speaker Change: Distribution, which would line up quite well with our quarterly reporting that is correct.

Operator: Well, I don't see any questions on the line. I think we, there's no one else on the line. And we have kind of exhausted the questions from the webcast as well.

Speaker Change: So.

Speaker Change: Very good well I don't see any questions on the line I think we there is no one else on the line and we have kind of exhausted the questions.

Operator: So I will now hand over to the operator to conclude this presentation. Thank you.

Speaker Change: The webcast as well.

Speaker Change: I will now hand over to the operator.

Speaker Change: To conclude this presentation.

Operator: This concludes today's call. Thank you for your participation. You may now disconnect.

Speaker Change: Thank you. This concludes today's call. Thank you for your participation you may now disconnect.

Operator: Transcription by CastingWords No hot mic. We're done. All right.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Alright, no help Mike.

Speaker Change: Alright.