Africa Oil Sees Progress Looming in Nigeria, Kenya

Posted on : Tuesday, 27th September 2022

Africa Oil expects a number of developments in the next month or so, including the spud of the Gazania well, an extension to its licence in Nigeria and the signing of a Kenya deal.

 

The company’s famously bullish CEO and president Keith Hill said the Island Innovator rig was 10 days out from arriving on location in South Africa.

 

Block 2B, the site of the Gazania well, is in a rift basin where a previous well has found oil. “It’s only in 150 metres of water and the contract terms are very good, so if we do find something we can bring it on quickly, it really has a lot of value,” Hill said.

 

“The value per barrel is probably double or triple that of deeper water barrels,” he continued, speaking at an investor meeting on September 13th.

 

Eco Atlantic Oil & Gas and Africa Energy are both working on the block, with Africa Oil invested in each of those companies.

 

Hill discussed some of the challenges of the company’s portfolio approach. Africa Oil has a 16.7% stake in Eco Atlantic and 19.9% in Africa Energy. It is also has a 30.9% stake in the private Impact Oil and Gas.

 

While the move provides Africa Oil with exposure to a range of opportunities, the exit route is not settled. “How do we realise that value? We sell the interest, absorb the company or sell the whole company. We can’t keep doing what we’re doing, we need to divest them or give shares to our shareholders.”

 

Gazania could be a catalyst for a potential sale in Eco Atlantic and Africa Energy, Hill said.