WTI (Oct) $63.48 -49c, Brent (Nov) $66.99 -61c, Diff -$3.51 -12c
USNG (Oct) $3.07 +1c, UKNG (Oct) 79.29p +0.84p, TTF (Oct) €32.425 +€0.56

Oil price

Oil is slightly down today ahead of Sunday’s Opec meeting, the Reuters leak that they would bring forward a 1.65m b/d from the end of the year for no obvious reason…

And today saw the Non Farm Payrolls, the add of 22/- was less than the 75/- forecast so not good news for the economy but a bigger chance in a rate cut next time round. 

Afentra

Afentra yesterday announced that it has signed Heads of Terms with Angola’s National Agency of Petroleum, Gas and Biofuels (ANPG) for the Risk Service Contract (RSC) for offshore Block 3/24, located adjacent to its existing Block 3/05 & 5A interests in Angola. The formal award of the license is expected in the coming months following the completion of the Government approval process.

Key Highlights

• Material acreage expansion: Afentra’s gross offshore acreage position increases from 265km² to 810 km²
• Established discoveries: Block 3/24 contains five oil and gas discoveries all located in shallow water
• Infrastructure-led development: Proximity to Block 3/05 offers short-cycle, low-cost development potential
• Exploration potential: several exploration prospects identified within the acreage on existing 3D seismic
• First offshore operatorship: Block 3/24 provides Afentra’s first offshore operatorship

Contract Terms and Joint Venture Structure

Heads of Terms for the Block 3/24 RSC have been signed with ANPG and set out the following key terms:

• Initial five-year period to review the development potential for existing discoveries and exploration prospectivity.
• 25-year production period that would subsequently be awarded when a discovery is developed.
• Afentra to be Operator with a 40% interest in the block, alongside Maurel & Prom Angola S.A.S. (40%) and Sonangol E&P (20%).

About Block 3/24

Block 3/24 covers 545 km² and is adjacent to Afentra’s existing producing oil fields and undeveloped discoveries in Blocks 3/05 and 3/05A. The block adds a further five discoveries –  Palanca North East, Quissama, Goulongo, Cefo and Kuma – all located in the same Pinda reservoir as the existing oil fields in Block 3/05 and 3/05A. In addition, the block contains the previously developed Canuku field cluster, which has produced up to 12,000 bopd. The block is estimated to include over 130 mmbbls of STOIIP and 400 bcf GIIP of already discovered resource

These discoveries and previous development assets offer a significant opportunity to apply modern technology to deliver short-cycle, low-cost developments tied back to the existing infrastructure in Block 3/05. A number of exploration prospects have also been identified based on existing 3D seismic date.

Key Discoveries

• Palanca North East discovered in 1988, tested at 6,000 bopd (38 API).
• Goulongo discovered in 1988, tested at a constrained rate of 2,400 bopd (23 API).
• Quissama discovered in 1987, appraised in 1992 and tested at a constrained rate of ~3,000 bopd (36 API).
• Kuma discovered in 1988, tested at 1,800 bopd (32 API).
• Cefo discovered in 1988, tested at 1,150 bcpd and 32 mmcfd (48 API condensate with high H₂S content)
• Canuku field cluster developed by Sonangol (2001-2008); produced up to 12,000 bopd (31 API)

CEO Paul McDade commented:
“We are pleased to announce this Heads of Terms and excited to progress towards Operatorship of Block 3/24, which represents the next step in our strategy to build a material production business in Angola. We look forward to reviewing the most efficient development options for the numerous discoveries, utilising the extensive Block 3/05 infrastructure. This will provide upside potential to enhance the overall redevelopment plan for the Block 3/05 area where we expect to significantly increase production and reserves, delivering long-term value and cashflows. Furthermore, we see potential for future infrastructure led exploration given the prospectivity of the area.

We appreciate the trust invested in Afentra by the ANPG and our joint venture partners and we look forward to building on the successful collaborative working relationship with Block 3/05 Operator Sonangol to ensure we deliver the full potential of this multi-billion barrel area.”

I think that this is another class deal from Paul McDade and his team, in talks with ANGP for the RSC for offshore block 3/24 which is adjacent to their existing offshore interests in Angola ticks and many boxes. The company will have 40% and operatorship with M&P 40% and Sonangol 20% respectively.

The deal substantially increases Afentra’s acreage offshore position in Angola and encompasses five existing shallow water discoveries which ticks another box. The very fact that those discoveries are apparently in very good condition, I’m told that the wells have been tested in the reservoir rather than just pressure testing the borehole, which means that they can use the adjacent 3/05 infrastructure and use relatively cheap and easy tie-backs to existing distribution. 

Add to that there are apparently significant exploration opportunities on the acreage, as well as the potential for Afentra to use up to date technologies not used before offshore Angola in order to massively increase resources and I would expect to see an increase in production in due course. I see no reason why that might not be 10-15,000 b/d and that Afentra have a sight on maybe 40% IRR which sets them up beautifully for long term gains from this deal.

Afentra has been a favourite in the Bucket List ever since its inception and it is no surprise that it spent a great deal of that time right at the top of the pile. Today the shares are around 55p and are up c.60% off the April low and with news like this are likely to kick on even further. I have had my TP of 100p in place for nearly two years and it looks increasingly achievable and maybe it won’t be long before I review it upwards.

Supporting Presentation

A short presentation summarising the strategic context and technical opportunity associated with Block 3/24 is available on the Company’s website: https://wp-afentra-2025.s3.eu-west-2.amazonaws.com/media/2025/09/Block-324-final.pdf

Original article   l   KeyFacts Energy Industry Directory: Malcy's Blog