Africa Oil Provides the Receipt of Prime Dividend & Provides Positive Egina Operational Update

Africa Oil Corp. has announced that it has received its seventh dividend from Prime Oil and Gas Cooperatief UA as well as provided an update the markets on a significant increase in the Egina oil field production.

Prime has distributed a $75.0 million dividend with a net payment to Africa Oil of $37.5 million related to its 50% shareholding. The Company intends to apply $18 million from the latest dividend to reduce the outstanding balance of the BTG term loan (“Term Loan”) to $123 million.

Africa Oil management expect to refinance the Term Loan at the end of July 2021, from the proceeds of the new corporate loan as announced on May 13, 2021. The utilisation of Corporate Facility is subject to the satisfaction of customary conditions precedents and the Company is on track to complete these prior to the end of July.

Prime is also expected to repay $136 million of its outstanding reserves based lending (“RBL”) facility amount by end of this month, reducing the outstanding balance to about $1,114 million. This takes Prime’s total RBL repayment in the last 18 months to $711 million, representing a 39% debt reduction. Prime is expected to end the second quarter of 2021 with a cash balance of at least $240 million after the dividend distribution and RBL repayment.

Egina’s production continues to increase due to the relaxation of its OPEC+ quota restriction. For the month of June, the field’s quota increased to 173 thousand barrels of oil per day (kbopd). This compares to Egina’s First Quarter 2021 average daily production of 152 kbpod. The field’s July and August quotas have been approved at 181 kbopd and 177 kbopd, respectively.

Keith Hill, Africa Oil’s President and CEO, commented: “Prime’s assets have performed better than expected during the first half of this year and strong cash flows from operations, have significantly bolstered Prime’s cash reserves. Prime is in a strong position to distribute dividends, whilst maintaining sufficient liquidity to deliver its business plan. Africa Oil’s outlook for the second half of this year is very promising as we look forward to higher production rates from Egina, the corporate loan refinance that significantly reduces our cost of capital and high impact exploration catalysts offshore Namibia, South Africa and Guyana.”