VANCOUVER, May 9, 2019 /CNW/ - Africa Energy Corp. (TSX Venture: AFE) (Nasdaq First North: AEC) ("Africa Energy" or the "Company"), an oil and gas company with exploration assets offshore South Africa and Namibia, announces financial and operating results for the three months ended March 31, 2019. View PDF Version.

Garrett Soden, the Company's President and CEO, commented, "The large Brulpadda gas condensate and light oil discovery announced in the first quarter opens a new world-class oil and gas play offshore South Africa with substantial follow-on potential.  We recently completed the first phase of the 3D seismic program over the Paddavissie Fairway, and we are in advanced negotiations to secure a drilling rig for the next exploration well planned on Block 11B/12B in early 2020."

HIGHLIGHTS AND OUTLOOK

In the first quarter of 2019, the Brulpadda well was drilled in approximately 1,400 meters of water by the Odfjell Deepsea Stavanger semi-submersible rig. The well targeted two objectives in a deep marine fan sandstone system within combined stratigraphic/structural closure. Following the success of the main objective, the well was deepened to a final depth of 3,633 meters and was successful in the Brulpadda-deep prospect. The well encountered a total of 57 meters of net gas condensate pay over two Lower Cretaceous high-quality reservoirs. The well also encountered oil pay in the upper reservoir. Core samples were taken in the upper reservoir, and a comprehensive logging and sampling program was performed over both reservoirs. The success at both the Brulpadda primary and secondary targets significantly de-risks other large prospects on Block 11B/12B.

The joint venture partnership for Block 11B/12B recently completed the first phase of the 3D seismic acquisition program with the Polarcus Asima vessel that commenced in the first quarter.  The joint venture partnership continues to assess the Brulpadda well results and will focus its efforts on integrating these results with the recently acquired 3D seismic in advance of the upcoming drilling program.

The Company exited the quarter with $3.6 million in cash. In addition, Main Street 1549, an entity owned 49% by Africa Energy, held $2.6 million in cash and $28.8 million in escrow at March 31, 2019 in order to cover Main Street 1549's portion of future cash calls and exploration expenditures on Block 11B/12B.

FINANCIAL INFORMATION
(Unaudited; thousands of US dollars, except per share amounts)

  

Three months

 

Three months

  

ended

 

ended

  

March 31,

 

March 31,

  

2019

 

2018

Operating expenses

 

2,268

 

1,049

Net loss

 

(2,239)

 

(1,054)

Net loss per share (basic and diluted)

 

(0.00)

 

(0.00)

Weighted average number of shares outstanding (basic and diluted)

 

683,432

 

319,191

Number of shares outstanding

 

683,489

 

319,195

     

Cash flows provided by (used in) operations

 

(1,442)

 

(1,596)

Cash flows provided by (used in) investing

 

2,037

 

(29)

Cash flows provided by (used in) financing

 

15

 

1

Total change in cash and cash equivalents

 

610

 

(1,637)

     

Change in share capital

 

26

 

3

Change in contributed surplus

 

756

 

36

Change in deficit

 

2,239

 

1,054

Total change in equity

 

(1,457)

 

(1,015)

     
 

March 31,

December 31,

  

2019

 

2018

Cash and cash equivalents

 

3,619

(1)

3,009

Total assets

 

42,945

 

44,300

Total liabilities

 

180

 

78

Total equity attributable to common shareholders

 

42,765

 

44,222

Working capital

 

3,658

 

3,197

(1) At March 31, 2019, Main Street 1549, an entity accounted for as an Investment in Associates and owned 49% by Africa Energy, held $2.6 million in cash and $28.8 million in escrow to cover Main Street 1549's portion of future cash calls and exploration expenditures on Block 11B/12B.

 

The financial information in this table was selected from the Company's unaudited consolidated financial statements for the three months ended March 31, 2019 (the "Financial Statements"), which are available on SEDAR at www.sedar.com and the Company's website www.africaenergycorp.com.

EARNINGS TREND AND FINANCIAL POSITION
(Unaudited; US dollars)

The Company's operating expenses increased $1.2 million during the three months ended March 31, 2019 compared to the same period in 2018 due mainly an increase in stock-based compensation resulting from the issuance of 13.7 million stock options to directors, officers and employees of the Company, as well as an increase in salary costs because the Company approved annual bonuses in the quarter.

As at March 31, 2019, the Company had cash of $3.6 million and working capital of $3.7 million compared to cash of $3.0 million and working capital of $3.2 million at December 31, 2018. In addition, Main Street 1549, an entity owned 49% by Africa Energy, held $2.6 million and working capital of $5.5 million at March 31, 2019. Working capital in Main Street 1549 included $28.8 million in escrow (other current assets) in favor of Total and CNRI to cover Main Street 1549's portion of future cash calls and exploration expenditures for Block 11B/12B, and current liabilities included a $5.0 million obligation to fund Total's and CNRI's portion of the 3D seismic costs and $5.0 million of Total's and CNRI's portion of the drilling costs for the next exploration or appraisal well.

NEXT EARNINGS REPORT RELEASE

The Company plans to report results for the three and six months ended June 30, 2019 on August 14, 2019.

About Africa Energy Corp.

Africa Energy Corp. is a Canadian oil and gas company with exploration assets offshore South Africa and Namibia. The Company is listed on TSX Venture Exchange (ticker "AFE") and Nasdaq First North Stockholm (ticker "AEC"). Africa Energy Corp. is part of the Lundin Group of Companies.

Important information

This information is information that Africa Energy is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above on May 9, 2019 6:00 p.m. Toronto Time.

The Company's certified advisor on Nasdaq First North Stockholm is Pareto Securities AB, +46 8 402 5000, certifiedadviser.se@paretosec.com.

Forward looking statements

Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or the Company's future performance, business prospects and opportunities, which are based on assumptions of management.

The use of any of the words "will", "expected" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Company's current belief or assumptions as to the outcome and timing of certain future events. These forward-looking statements involve risks and uncertainties relating to the results and costs of future exploratory drilling activity in Block 11B/12B, including other identified prospects and proposed exploration wells, the results of future 3D seismic acquisitions, and the results and costs of exploration activity in Block 2B and PEL 37.  In addition, there are ongoing risks and uncertainties relating to, among other things, changes in oil prices, results of other exploration and development activities, uninsured risks, regulatory changes, defects in title, availability of funds required to participate in the drilling activity, or of financing on reasonable terms, availability of materials and equipment, timeliness of government or other regulatory approvals, actual performance of facilities, availability of third party service providers, equipment and processes relative to specifications and expectations and unanticipated environmental impacts on operations. Actual future results may differ materially. Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to the Company. The forward-looking information contained in this release is made as of the date hereof and the Company is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Africa Energy Corp.