Canadian oil and gas exploration company Africa Oil Corp. (Africa Oil) has announced the completion of the amalgamation to consolidate all of the Prime Oil & Gas Coöperatief (Prime) shareholding in Africa Oil. Prime is Africa Oil’s joint venture (JV) with global financial firm BTG Pactual with producing deepwater assets offshore Nigeria.

In a press release on March 20, the explorer also declared the first quarterly cash dividend of $25mn, as the company implements its new enlarged base dividend policy, with a target annual distribution of at least $100mn. Furthermore, Africa Oil announced board and executive management changes, and presented its full-year 2025 management guidance.

“This is a transformational milestone that marks the next stage of value creation and shareholder returns for Africa Oil as an enlarged company. There is compelling strategic rationale for the consolidation and we believe that the quality and materiality of the assets within our diversified portfolio, our newly combined balance sheet, the strength of the cash flow profile and an attractive double-digit dividend yield all help emphasise a superior investment proposition for investors,” said Africa Oil president and CEO Roger Tucker.

“In that regard, I am pleased to announce that the company’s new board has approved the declaration of the first quarterly dividend as we seek to set a new high mark for shareholder returns,” he added.

The deal will double reserves and production in high-quality offshore assets that benefit from low lifting costs, premium Brent pricing and a favourable fiscal regime. According to the statement, consolidating full control of Prime’s cash flows and balance sheet resulted in an enlarged cash position of $460.9mn as of December 31, 2024.

With the completion of the amalgamation, Africa Oil’s deepwater Nigerian assets comprise an 8% working interest (WI) in Petroleum Mining Lease (PML) 52 and Petroleum Prospecting Licence (PPL) 2003, and a 16% working interest in PMLs 2, 3 and 4 as well as PPL 261.

PML 52 and PPL 2003 are operated by an affiliate of US supermajor Chevron with PML 52 covering part of the producing Agbami field. PMLs 2, 3 and 4 and PPL 261 are operated by affiliates of France’s TotalEnergies and contain the producing Akpo and Egina fields as well as the Preowei and Egina South discoveries.

All three producing fields (Agbami, Akpo and Egina), located over 100 km offshore Nigeria, have high-quality reservoirs and produce light to medium sweet crude oil through FPSO facilities. Akpo and Egina also export associated gas which feeds into the Nigerian liquified natural gas (LNG) plant, whilst Agbami associated gas is mostly reinjected.

In the consolidated full-year 2025 management guidance, Africa Oil stated that the company’s 2025 production will be generated solely by its deepwater Nigerian assets. The document includes WI production guidance range of 28.0 – 33.0 thousand barrels of oil equivalent per day (kboepd) and entitlement production range of 32.0 – 37.0 kboepd, with approximately 75% expected to be light and medium crude oil and 25% conventional natural gas.

Africa Oil says it is expected to sell 11 - 13 cargoes of approximately one million barrels each during 2025 and to generate $500mn – $600mn in EBITDAX and $320mn – $370mn in cash flow from operations before working capital adjustments and interest payments. These estimates are based on a 2025 average Brent price of $75 per barrel.

Africa Oil chairman Huw Jenkins congratulated the teams at Africa Oil, Prime and BTG Pactual on closing the deal considerably ahead of the original timeline, adding that the enlarged Africa Oil is uniquely positioned to drive long-term value through its existing portfolio of world-class assets. Additionally, the company could leverage its strong balance sheet to consider strategic complementary acquisitions in its target markets.

“The company has ambitious growth targets, and the vision is to continue growing into a leading full-cycle E&P, establishing it as a trusted and prominent industry partner,” Jenkins said. “The management team has done an excellent job of preparing the company for its next phase of growth and this completion effectively transforms the company into one of considerably greater scale that is better placed to realise its vision.”

About Africa Oil

Africa Oil is a full-cycle independent upstream oil and gas company with interests offshore Nigeria, Namibia, South Africa and Equatorial Guinea. The company’s key assets include producing and development fields in deepwater Nigeria operated by industry majors. The explorer also has a strong presence in the Orange Basin, with an effective interest in the Venus light oil project off the coast of Namibia, and a direct interest in Block 3B/4B offshore South Africa. Africa Oil is listed on the Toronto Stock Exchange (TSX) and the Nasdaq Stockholm.