Resilience in Ni Nigeri ria – Egina FPSO Challenging Markets AGM Presentation 21 st April 2020 A Lundin Group Company AOI – TSX and Nasdaq Stockholm Kenya – firs rst oil cargo South th Afric rica – Deeps psea Stavang nger r rig drilled d the Brulpa ulpadd dda discovery ry well www.africaoilcorp.com
COVID-19 IMPACT AND MEASURES • Africa Oil’s utmost priority is the health and safety of its employees and contractors • Two weeks before the lock-down started in the UK and Canada, Africa Oil’s staff were requested to work from home and business travels were halted • So far, no COVID-19 case has been reported amongst Africa Oil’s staff • Regarding Africa Oil’s local operations: - Cases have been identified in Kenya and borders have been closed - Operations are affected by confinement and social distancing measures - In Nigeria, operators have put in place additional precautions: offshore personnel rotations are minimised and offshore staff is quarantined for 2 weeks before traveling offshore - So far, our FPSO operations and production remain unaffected • Although Africa Oil’s management does not expect the pandemic to materially affect the company’s revenues, it continues to closely monitor the situation and has undertaken several cost reduction measures to prepare for a longer impact of the pandemic on the oil industry Africa Oil Corporation | 2020 AGM Presentation Slide 2
AFRICA OIL AT A GLANCE Core Asset: Company Profile • 50% shareholding in Prime Oil & Gas B.V. (“Prime”) • Prime holds interests in two Nigerian deepwater licenses • Three world-class producing fields YE’19 Market 2020E 2020 E&A Debt operated by Oil Majors Cap. Catalysts 2P Reserves Production • USD ~330m 1 USD 205m 1 3 – 4 wells ~85 mmboe 2 ~37 kbopd 3 High netback production and robust cash flows from operating activities • >90% of 2020 production hedged at an average oil price of $66/bbl Africa Focused Assets Map Full-Cycle E&P Key Drivers to Grow Value: PRODUCTION • South Africa: Up to three exploration Nigeria Deepwater wells on Block 11B/12B (Q3 2020) • Namibia: High impact Venus exploration well (Q3 2020) • Kenya: Move South Lokichar forward to project sanction EXPLORATION DEVELOPMENT Kenya (Lokichar), Kenya, Deepwater • Nigeria (OML 130) Portfolio Nigeria: Future development, exploration and appraisal opportunities Notes: 1 As of 20 April 2020 2 Independent estimate of entitlement reserves net to Africa Oil’s 50% interest in Prime; refer to slide 19 for more details. Africa Oil Corporation | 2020 AGM Presentation Slide 3 3 Refer to slide 3 for important notes on this item; 2020 Management Guidance (range mid- point), net to Africa Oil’s 50% interest in Prime.
AFRICA OIL 2020 GUIDANCE AND FINANCIAL OUTLOOK Net to Africa Oil’s 50% Pr Prime: ime: Robust st Ba Balan lance S Sheet 2019 2019 2020E 2020E (net to Africa Oil’s 50% Shareholding Sha Shareholding lding in P in Prime ime 1,2 Wo Working rking Inte Interes rest t (W. (W.I. I.) Prod roducti tion (boe boe/d) 3 25,650 30,000-33,000 Debt/EBITDA 5 (20 Net Debt (YE’19) Ne Net De (2019) ) USD 843m 1.1x Economi mic Enti titl tleme ment t Prod roducti tion (boe boe/d) 3 33,600 35,000-38,000 (YTD) 2 Cash shfl flow w fr from m Operati rations s (U (USD m) m) 537.6 630-680 EBIT EBITDA/I /Interest (20 (2019) Di Divid idends (YTD 5.7x 5.7x USD 87 USD 87.5m .5m Cap Capita tal In Investme tments ts (U (USD D m) m) 107.4 55-60 Afri Africa O Oil il: : No N Near-Term m Loan Maturit ity Afri Africa O Oil il Co Corporate Bu Budget 2019 2019 2020E 2020E Loan 6 Outstandin Out ing Ac Acquis isit itio ion Loan Maturit Ma ity G&A &A, Explorati ration Costs, sts, Capital tal 55.8 50.0 ts 4 (U Inv Investme stments, ts, Equity ty Inv Investme stments (USD m) m) USD 205m Jan. 2022 Imp mportant Not Notes: 1 The 50% shareholding in Prime will be accounted for using the equity method and it will be presented as an investment in the Con solidated Balance Sheet. Africa Oil’s 50% share of Prime’s net profit or loss will be shown in the Consolidated Statements of Net Loss and Comprehensive Loss. Any dividends received by Africa Oil from Prime will be recorded as a Cash flow from Investing Activities. The guidance presented here is for information only. 2 Any dividends received by Africa Oil from Prime’s operating cash flows will be subject to Prime’s capital investment and fina nci ng cashflows, including payments of Prime’s Reserve Based Lending (“RBL”) principal amortization, which is currently estimated to be approximately USD 257 million in 2020, net to Africa Oil’s 50% shareholding in Prime. The principal repayments are subject to semi-annual RBL redeterminations. Africa Oil has so far received USD 87.5m since closing the Prime acquisition on January 14 th , 2020. 3 Net entitlement production is calculated using the economic interest methodology and include cost recovery oil, tax oil and profit oil. This is different from working interest production that is calculated based on project volumes multiplied by half of Prime’s effective indirect working interest in the Nigerian licenses (OML 127 and OML 130). 4 Includes equity investments in Africa Energy and Impact Oil & Gas totalling approximately USD 17m. 5 Non-IFRS measure, see Reader Advisory (slide 17). The Company closed the Prime acquisition using cash on hand and a loan for USD 250m provided by Banco BTG Pactual S.A. This loan has a 2-year maturity from the completion date of January 14 th , 2020. 6 Africa Oil Corporation | April 2020 Corporate Presentation Slide 4
NIGERIA DEEPWATER PRIME’S WORLD CLASS ASSETS Top 20 Producing Fields Côte d'Ivoire to Angola Asset Locations Egina: ~166 kbopd (average rate with ramp-up for the period Jan-Aug 2019) – the field has reached plateau rate of 200 kbopd Ope perated by by Che hevron Ope perated by by TOTAL Prim ime W.I. 8% 8% Prim ime W.I. 16 16% Averaged ~440 kbopd 1 in 2019 (liquids only) with entitlement production of • • Located more than 100km offshore. ~34 kbopd net to Africa Oil’s 50% shareholding in Prime. • All 3 fields have quality reservoirs and produce light, sweet crude oil. • Egina started production late 2018; Agbami and Akpo have been producing • Undeveloped horizons within existing fields and nearby undeveloped since 2008 and 2009 respectively. discoveries; identified exploration opportunities within the licenses. • Average 2019 operating costs of USD 6.6 per barrel. Notes: 1 Production relates to aggregate full field production and in case of Agbami, which straddles and is unitized across two license areas, it is in respect of Africa Oil Corporation | 2020 AGM Presentation Slide 5 OML 127 and OML 128 (3 rd party block). Please refer to slide 19 for more details on the Agbami tract participations.
PRIME A LEADING E&P COMPANY AMONG ITS LISTED PEERS 2019 Unit Operating Cost 1 2019 Production • Africa Oil is a 50% shareholder in 35.00 180 FY'19 Average Daily Production (kboe/d) 160 one of the leading international 30.00 Operating Costs (USD /boe) 140 E&P companies 25.00 120 • Prime stands out for its low 20.00 100 operating costs and high netbacks, 80 15.00 60 as highlighted by its top 2019A 10.00 40 EBITDA margin 5.00 20 • Industry leading oil price hedging 0 0.00 position provides stability: - >90% of 2020 production hedged at 2019 EBITDA 1 2019 Cashflows 1 average oil price of USD 66/bbl 2,000 Cashflow From Operations, CAPEX and FCF to 1,800 - Most of Q1 2021 production hedged 1,600 at average oil price of USD 60/bbl 1,400 Company (USD m) 1,200 - Almost all of the hedged positions 1,000 860 784 are physical forward sales 800 615 583 600 - Buyers include major oil companies 318 400 276 157 193 182 174 and commodity trading houses; 119 89 200 80 32 28 - these counterparties are part of groups with investment grade credit ratings Cashflow from Operations CAPEX FCF to Company Sources: Company Reports, Bloomberg, Africa Oil - Notes: 1 Non-IFRS measure, see Reader Advisory. Africa Oil Corporation | 2020 AGM Presentation Slide 6
OML 130 PRIME’S FUTURE GROWTH OPPORTUNITIES • Egina production ramp-up during last year increased Prime’s W.I. Egina Underpins Production Growth production for 2019 by ~60% compared to the 2018 average • Egina field is in harvest mode with production at plateau (~200 kbopd) and modest capital investment requirements • The Egina FPSO can be used for future tie-backs of nearby discoveries – contingent on available processing capacity and a stable economic outlook • OML 130 opportunity set also includes near field appraisal and exploration targets Egina FPSO Nearby Development Opportunities Africa Oil Corporation | 2020 AGM Presentation Slide 7
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