WTI (Apr) $77.56 -37c, Brent (May) $81.92 -29c, Diff -4.36 +8c
USNG (Apr) $1.71 -5c, UKNG (Apr) 63.49 +0.94p, TTF (Apr) €25.385 +€0.78

Oil price

Oil drifted yesterday, the US inflation figures disappointed but not really enough to move markets. The EIA and the Opec reports unsurprisingly were more positive about demand numbers and the EIA upped its 2Q Brent forecast by $4 to $88.

The API stats showed a 5.521m barrels draw against the whisper of +400/- and products drew 3.75m in gasoline and 1.162m in distillates. With EIA data later today the market is slightly better…

Afentra

Afentra has provided the following update on its operations:

Operational Update

Production performance on both Block 3/05 and 3/05A has been strong year to date with combined gross average production of ~23,700 bopd (Net: ~6,995 bopd1) for the period to the end of February 2024. The next program of Light Well Interventions is underway and we expect these to support current production levels.

The Company sold its first 2024 cargo of 450,000 bbls of crude oil in February 2024. The sales price inclusive of the Brent premium was $85/bbl, generating pre-tax sales2 of $38.2 million to Afentra.

Onshore License Round

Following the announcement by ANPG, which confirmed Afentra as preferred bidder for a 45% non-operated interest in  both KON 15 and KON 19 onshore Angola, the Company is now reviewing the license documentation which will be  negotiated over the coming months.

Government Approval of Azule Acquisition

Afentra has received approval from the Angolan Competition Authority for the acquisition from Azule Energy Angola Production B.V. (‘Azule’) of a 12% non-operating interest in Block 3/05 and a 16.33% non-operating interest in Block 3/05A, offshore Angola (the ‘Azule Acquisition’) pursuant to a sale and purchase agreement between Azule and Afentra’s wholly-owned subsidiary, Afentra (Angola) Ltd, dated 19 July 2023.

The Company awaits approval from the Minister of Mineral Resources, Petroleum and Gas and it is therefore now expected that the transaction will be completed in 2Q 2024. Afentra continues to benefit from the asset cashflow from the effective date of October 2022 and upon the completion of the transaction Afentra will provide details on the financing of the final completion payment, which will be positively impacted by the asset cashflow.

Commenting on the update, CEO Paul McDade said:
“The strong performance of the Block 3/05 and 3/05A assets has continued into 2024 and highlights the significant upside potential of these assets. We expect the Angolan government’s approval of the Azule Acquisition to be given in the coming weeks, and this will enable us to proceed with the completion of our third transaction in the country, providing Afentra with meaningful exposure to both of these quality assets. In the meantime, we continue to benefit from the strong asset cashflows from both our existing interests and the Azule interests and this will be reflected in the final payment upon completion of Azule Acquisition.”

For Afentra there is much good news around, net production to the end of February of 6,995 bopd was very good and at $85 per barrel highly profitable. This means that the blocks 3/05 and 3/05A have been a great success and early approvals have occurred and final, Government approval is imminent. But there is no doubt that the company is still accreting value since signing in October 2022 with more to come.

On other matters it is also good news that Afentra is the preferred bidder for the 45% non-operated interest in blocks KON 15 and KON 19, onshore Angola and now armed with the appropriate license documentation is preparing for negotiation in the ‘coming months’. 

Afentra is one of the few members of the Bucket List which is fully justifying its inclusion via first rate performance, in its case a 50% rise in the last year. I am about to publish an update in which the company will take pride of place and I remain convinced that it is perfectly possible to achieve a similar or even better performance going forward. 

Jadestone Energy

Yesterday I managed to pin Paul Blakeley into the hot seat for one of my CEO interviews. After a difficult year or so the company has much to look forward to with regard to projects imminently coming onstream and also being in the bidding room for more than one potential asset acquisition.

Core Finance CEO Interview: Paul Blakeley of Jadestone Energy

KeyFacts Energy Industry Directory: Malcy's Blog