Term Sheet for Offtake and Prepayment Agreement

22 October 2019

The Company is pleased to announce that it has entered into a non-binding indicative term sheet (the "Term Sheet") with an international oil marketing and trading company (the "Offtaker") for an agreement which, if it were to complete and on bringing well TLP-103C-ST into production, would provide up to US$25 million in offtake and prepayment financing for development of the Tilapia field ("Tilapia") in the Republic of the Congo, in which the Company owns a 56 per cent interest.

This financing would allow the Company to draw on the funds in advance as a prepayment for barrels to be lifted in the future.

The Term Sheet envisages that AAOG will deliver a minimum of 4.5 million barrels of Djeno crude oil to the Offtaker at a price to be agreed. In return, the Offtaker will provide a facility of up to US$25 million to AAOG as advance payment for such oil. The facility will have a maturity date of 31 December 2022, a three-year tenor and a coupon of LIBOR plus 6-7 per cent. All sums will be secured against the Company's Tilapia licence.

The Company believes that this would be an efficient financing structure for the development of Tilapia which would include, if the field economics supported it, the drilling of further wells and the construction of a 7km pipeline to tie into a nearby export terminal.

The indicative term sheet envisages technical, environmental and financial due diligence ahead of entering into the definitive offtake and prepayment agreement.

James Berwick, CEO, said, "We welcome the opportunity to secure this offtake and prepayment financing for the development of Tilapia, which, in the success case at TLP-103C-ST, avoids the need for further equity financing and subsequent dilution for shareholders as we expand the production capacity of the site.  We are working hard towards finalising definitive agreements that can be signed after TLP-103C-ST has been successfully drilled."




For further information please visit www.aaog.com or contact:

Anglo African Oil & Gas plc
James Berwick, Chief Executive Officer
Tel: c/o St Brides Partners
+44 20 7236 1177
finnCap (Nominated Adviser and Broker) Tel: +44 20 7220 0500
Christopher Raggett, Giles Rolls, Teddy Whiley (Corporate Finance)
Camille Gochez (ECM)

St Brides Partners (Financial PR) Tel: +44 20 7236 1177
Frank Buhagiar, Juliet Earl