Africa Oil increases its stake in offshore block 3B/4B of the Orange Basin

Dr Roger Tucker, Chief Executive Officer of Africa Oil, has expressed his satisfaction with the progress the company is making with its expansion strategy. In a recent statement, he said: "This transaction marks an important step in the implementation of our strategy to increase our working interest in key assets, such as our suite of opportunities in the Orange Basin. There is growing interest in this region, and industry activity is particularly buoyant. We thank Eco Atlantic for its continued collaboration since 2017, and look forward to the next phase of development, including drilling the first exploration well on Block 3B / 4B."

Block 3B / 4B, covering 17,581 km² offshore South Africa, is a strategic area for Africa Oil. The block is located in a region with high exploration potential, in water depths ranging from 300 to 2,500 metres. It is particularly promising because of its proximity to major oil discoveries such as Venus. The block also has extensive seismic coverage, with around 14,000km² of 2D seismic and 10,800km² of 3D seismic, offering a wide range of opportunities for future exploration. The majority of the prospects are located at a depth of around 1,500 metres, strengthening the prospects for exploitation.

On 28 August 2024, Africa Oil finalised a farm-out agreement for Block 3B / 4B with TotalEnergies and QatarEnergy. AOSAC, a subsidiary of Africa Oil, retained a 17.00% working interest in the block, while transferring operatorship to TotalEnergies. The agreement includes a maximum consideration of USD 46.8 million, including exploration carry for the retained interest, sufficient to finance two exploration wells. This strategic partnership with major players in the sector, TotalEnergies and QatarEnergy, is a major step forward for the company.

The administrative process for exploration activities is also progressing. In September 2024, the Department of Mineral Resources and Energy of the Republic of South Africa granted environmental clearance for the drilling of up to five exploration wells on Block 3B / 4B. The legislative notification and appeal process is currently underway with the relevant regulatory bodies, ensuring regulatory compliance for future exploration activities.

As part of the transaction, Africa Oil has reassessed its position in relation to its Eco shares. Prior to the transaction, Africa Oil held 54,941,744 Eco shares and 4,864,865 warrants, representing 14.84% of Eco's ordinary shares and 9.11% of Eco's warrants. Following the exchange of these securities for their cancellation by Eco, Africa Oil no longer holds any Eco shares or warrants and is no longer subject to the early warning reporting requirements. This decision demonstrates Africa Oil's flexibility in managing its long-term investments in line with market conditions and future business opportunities.

Africa Oil continues to strengthen its position in the energy sector, with a particular focus on the Orange Basin, one of the most promising locations for oil exploration activities. By working with major partners such as TotalEnergies and QatarEnergy, and by optimising its assets through strategic realignments, the company is preparing for a new phase of growth and major discoveries in the global oil industry.