28 June 2019
Anglo African Oil & Gas plc, an independent oil and gas developer, is pleased to publish its audited final results for the year ended 31 December 2018. The results are copied below and will be posted to shareholders shortly.
This annual report covers the twelve months to 31 December 2018, during which period the Company has drilled its much anticipated new well at the Tilapia field. A detailed summary of the year under review and the prospects for the future is included in the Group Strategic Report.
The original premise of the Company at its IPO was to see if the Mengo and, most importantly, the Djeno could be brought into production within the licence area. At the same rates as seen elsewhere, just one well from the Djeno could result in 5,000/bopd of production, resulting in substantial gross revenues. Having onshore production facilities would then allow for the costs to be managed such that the Company would have substantial net free cashflow and be able to support a dividend.
Following the successful results of well TLP-103C, which have been further confirmed in the recent CPI results released to the market, we have moved close to achieving this aim. While there remain operational and technical risks in bringing the Djeno into production, the prospects are clearly better defined than when we started and the risks are much lower.
We are therefore excited to be moving into the production phase. James Berwick and his operational team have been working hard to refine the plan to give the Company the best chance of success. We now know that the resources are there: we just need to implement a plan that optimises the likelihood of extracting them.
You will see that we have impaired the valuation of TLP-103C to take account of specific costs incurred in the abortive drilling of TLP-103, which was stopped when the rig became unstable. We concluded that these costs would have no future long-term economic benefit for the Group. It is important to note that this impairment has no impact on the prospects for TLP-103C; indeed, having to relocate the rig from TLP-103 had some benefit in drilling TLP-103C
TLP-101 and TLP-102
Although we believe that we will be able to produce from these wells for a considerable time into the future, we are now concentrating on TLP-103C (and potentially further wells). The existing production from TLP-101 is not of itself economically viable, and we have therefore fully impaired the value of the oil & gas assets in these financial statements.
We recognise the need to protect the interests of members and are actively developing plans that will enable the Company to grow and develop the Tilapia asset through re-investment of cashflow as well as through other sources of capital, such as offtake financing. Clearly, bringing TLP-103C into production is the critical first step in our ability to do this and we are examining our financing plans to facilitate this. The Company is in receipt of several offers of capital finance, which it is considering, and the Company is consulting with its major shareholders. Nevertheless, we accept that, at the date of this report, there is an issue in respect of going concern, which is acknowledged in the financial statements.
Licence over Tilapia
We are pleased that the Congolese authorities have offered a new 25-year licence for Tilapia. James Berwick is ably leading negotiations on the production-sharing agreement and other underlying documents, which we aim to get agreed as soon as possible.
At the moment, the focus is on production from TLP-103C. We have also progressed plans for the full development of the Tilapia field. In addition, we have progressed discussions on new asset opportunities that fit with the Company's continued strategy of becoming a lean, profitable oil producer with a focus on the bottom line and a clear and unswerving commitment to the payment of dividends. Any new assets must bring accretive value to the shareholders
We look forward to progressing these discussions further and will keep members updated on progress. By the end of 2019, we expect the value of, and prospects for, the Company to be very different from what they are today.
For further information please visit www.aaog.com or contact:
|Anglo African Oil & Gas plc||Tel: c/o St Brides Partners
+44 20 7236 1177
|David Sefton, Executive Chairman
James Berwick, Chief Executive Officer
|finnCap Ltd (Nominated Adviser and Broker)||Tel: +44 20 7220 0500|
|Christopher Raggett, Giles Rolls, Anthony Adams (Corporate Finance)|
|Camille Gochez (Corporate Broking)|
|St Brides Partners (Financial PR)||Tel: +44 20 7236 1177|
|Frank Buhagiar, Juliet Earl|
The information contained within this announcement is deemed by the Company to constitute inside information for the purposes of the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.