06 June 2017
Anglo African Oil & Gas plc, an independent oil and gas developer, is pleased to announce its audited final results for the ten-month period ended 31 December 2016.
The full results are available to
download in PDF format
- Successful admission to AIM, post period-end, with a raise of £10 million of equity capital
- Facilitated the acquisition of 49% of the shares in Petro Kouilou SA, which owns a 56% interest in the producing Tilapia oil field, Republic of the Congo, the balance of 44% being held by the SNPC, the Congolese NOC - on admission, production of 38 bopd
- Tilapia is a low-risk development play (R1, R2 and Mengo Sands Horizons) with exploration potential (Djeno Sands Horizon)
- Mengo Sands Horizon - an undeveloped discovery
- Djeno Sands Horizon - deeper exploration prospect from which neighbouring operators are achieving high production and reserves
- Core strategy defined to increase production over 12 months through workovers of existing wells and drilling of a funded new multi-horizon well to:
- target the already producing R1, R2 Horizon
- develop the Mengo Sands Horizon discovery from which other operators are producing 200 - 800 bopd per well
- test the Djeno Sands Horizon, where adjacent wells are producing approximately 5,000 bopd
- Workovers of two existing wells on the asset have commenced and are ongoing
- Management's remuneration aligned with the success of the drilling programme.
Alex MacDonald, CEO of AAOG, commented, "2017 has seen us successfully raise £10 million, secure admission to AIM and complete the initial acquisition of an interest, through Petro Kouilou SA, in the productive Tilapia oil field in the Republic of the Congo. We have commenced operations at the Tilapia field, and have defined a development strategy to increase production, principally through a drilling programme targeting existing reserves and a proven discovery, as well as the potentially transformational opportunity in the Djeno Sands Horizon, an horizon which has been found to be highly productive in neighbouring fields, making it a comparatively low-risk venture.
"Contemporaneously with the preparations for the drilling campaign, we also commenced pre-identified low-cost workovers of two existing wells on the asset, giving the Company a potential opportunity to increase production in a cost-effective manner. This is ongoing and, as investors will be aware, has had mixed results thus far. Our work at TLP-101 has increased the flow rate by 40 per cent. from approximately 32 bopd to approximately 45 bopd. With the second well, TLP-102, we have proven the presence of hydrocarbons but, after re-perforation, the well has not flowed and therefore we are re-examining the potential for alternative stimulation methods. However, as we emphasise above, the true potential of Tilapia is in the deeper horizons which we will be targeting through the drilling campaign.
"We have a strong and experienced technical team on the ground, led by our Operations Director Oleg Schkoda, who has many years' experience in the Republic of the Congo and of these particular horizons, plus a supportive local partner, and we believe we are well positioned to take advantage of the opportunity in front of us."
Executive Chairman's letter
I am pleased to welcome you to the first annual report of Anglo African Oil & Gas plc (AAOG) following our successful IPO in March 2017 on the London Stock Exchange's AIM. In tandem with our admission to AIM, we successfully raised £10 million, making AAOG one of very few E&P fund raisings on AIM in recent times. I would like to thank our shareholders for their support, and our management team for their hard work over the course of the past eighteen months.
The financial results contained in this annual report relate to the period prior to AAOG's placing and admission to trading on AIM. However, the report does provide me with an opportunity to introduce the Company and provide a summary of the plans that we have.
Our strategy is to develop the Tilapia field, in which Petro Kouilou SA has a 56 per cent share, with the balance of 44 per cent being held by SNPC, the national oil company of the Republic of the Congo. Tilapia is located 1.8 kilometres offshore of the Republic of the Congo ('the Congo'), in the Lower Congo Basin. The field is drilled from onshore, and Petro Kouilou has its production and storage facilities onshore. The Tilapia field is located a 45-minute drive from Pointe Noire, the second largest city in the Congo, and 17 kilometres from the nearest refinery. The roads are of sufficient quality that production can be trucked to the refinery throughout the year. AAOG has completed the initial acquisition of 49 per cent of the share capital of Petro Kouilou and expects to complete the acquisition of the remaining 51 per cent of the shares in the near future.
We have already commenced workover operations on the existing wells, TLP-101 and TLP-102, which thus far have been successful on TLP-101 but unfortunately not on TLP-102. Further elements of the workovers are being planned. However, by far the most significant step will be the drilling of a new well, TLP-103. Planning for this is well underway, with an experienced and highly qualified technical team led by the CEO, Alex MacDonald, and the Operations Director, Oleg Schkoda, who, for the majority of their time, are based in Congo.
This new multi-horizon well will first drill through the existing producing horizon, R1/R2, and secondly deeper, into the Mengo Sands Horizon, where the Company has well-log data showing the existence of producible hydrocarbons and from which neighbouring onshore producers are achieving very good production rates of hundreds of barrels of oil a day per well. Finally, TLP-103 will drill deeper still to explore the Djeno Sands Horizon. This horizon has not previously been drilled within this licence area, but Tilapia is located immediately adjacent to areas from which other operators, including ENI and SOCO PLC, are achieving production per well of thousands of barrels a day.
Clearly, the results of the appraisal drilling into the Mengo and the exploration into the Djeno will provide the most significant pointer as to the potential value of Tilapia and it is the balance of risks and upside among these different aspects of the drilling that makes this opportunity so interesting. We look forward to updating you with the results later this year.
Finally, I would like to reaffirm our commitment to a financially prudent and careful approach to the Company's activities. Although we have a robust balance sheet and sufficient funds for our plans, we remain focused on cashflows and we intend to ensure that capital is used primarily to enhance the value of the asset. We are maintaining a very tight grip on running costs, and the salaries and options of the management team are tied to increasing production. As a result, we are all highly motivated to deliver the plans that we set out before investors.
Once again, can I thank you for your support and I look forward to updating you on our progress.
6 June 2017
For further information please visit www.aaog.co or contact:
|Anglo African Oil & Gas plc||Tel: c/o St Brides Partners
+44 20 7236 1177
|David Sefton, Executive Chairman|
|Alex MacDonald, Chief Executive|
|finnCap Ltd (Nominated Adviser and Broker)||Tel: +44 20 7220 0500|
|Christopher Raggett, Giles Rolls, Anthony Adams (Corporate Finance)|
|Emily Morris (Corporate Broking)|
|St Brides Partners (Financial PR)||Tel: +44 20 7236 1177|
|Frank Buhagiar, Olivia Vita|
The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.
Notes to Editors
Anglo African Oil & Gas (AAOG) is an AIM-listed independent oil and gas company acquiring a 56% stake in the producing Tilapia oil field in the Republic of the Congo. The Company boasts a low-cost production story in a prolific hydrocarbon region with significant exploration upside, differentiating it substantially from its E&P peers. Additionally, management's remuneration is tied to hitting production milestones, reflecting their strong focus on cost control.
Tilapia has an excellent address, being located close to multi-billion barrel fields that include the ENI-operated Litchendjili field and the 5,000bopd Minsala Marine field. Tilapia currently produces approximately 45 bopd from two near-surface intervals. It has an undeveloped discovery in the lower Mengo sands with gross contingent resources of 8.1m barrels and a deeper exploration prospect, with gross prospective resources of 58.4m barrels, in the productive Djeno interval from which the adjacent Minsala field produces.