Anglo African Oil & Gas Plc is pleased to announce the admission today of its ordinary shares to trading on the AIM Market of the London Stock Exchange (‘Admission’). This follows the oversubscribed placing of 50,000,000 Ordinary Shares at a price of 20 pence per share, giving the Company a market capitalisation of approximately £10.6 million on Admission.
The funds raised will be used to finance the acquisition of a 56% stake in the producing Tilapia oil field (‘Tilapia’) in the Republic of Congo and a multi-well, near term drilling programme targeting a major increase in production. Dealings in the ordinary shares will commence at 8.00a.m. under the ticker “AAOG.L” (ISIN: GB00BD0Q3L08). finnCap is acting as Nominated Adviser and Joint Broker to the Company alongside Throgmorton Street Capital.
· Tilapia is a producing field with near-term development and exploration potential:
o Current production of 38 bopd from one near surface interval;
o Undeveloped discovery in the lower Mengo sands with gross contingent resources of 8.1m barrels
o Deeper exploration prospect with gross prospective resources of 58.4m barrels in the productive Djeno interval from which the adjacent Minsala field produces
· Development/workover programme to commence in March 2017 with the following initiatives to be conducted over just 12 months:
o Workover of two existing wells intended to rapidly increase production to c. 185 – 250 bopd which would see AAOG achieve operating breakeven at $48
o A new multi-horizon well, targeting production from the R1, R2 sands and the Mengo discovery, which is expected to see production increase to 750 bopd – the well will also test the Djeno sands, which if successful would be transformational for AAOG
o A fourth well in H2 2017 targeting Djeno could see net daily production increase to around 5,300 bopd
· Excluding Djeno, AAOG would still be highly profitable producing around 750 bopd from the R1, R2 and Mengo
· Tilapia is located close to multiple 1 billion barrel fields including the ENI operated Litchendjili field; and the 5,000 bopd Minsala Marine field
· Management’s remuneration aligned with the success of the drilling programme:
o An option package is in place based on ambitious production targets measured over a consecutive 30 day period: one third at 1,000 bopd; one third at 2,500 bopd; one third at 5,000 bopd
o 75% of accrued executive pay totalling £120,000 has been deferred against increased production: 25% to be paid on Admission with the remaining 75% to be paid in three equal tranches contingent on production increasing to 250 bopd; 500 bopd; 750 bopd.
David Sefton, Executive Chairman of AAOG commented, “AAOG sits on both sides of the risk spectrum: a development and production play yet at the same time with access to potentially highly rewarding exploration that could see output substantially increase from 38 bopd today to 5,300 bopd this year. We have put in place a development plan targeting a rapid increase in production at Tilapia by exploiting existing reserves and a proven discovery, before we target the high impact opportunity in the Djeno, a sand which has been found to be highly productive in neighbouring fields. Regardless of the initial outcome of drilling into the Djeno, over the next few months AAOG intends to become a profitable, cash generative producer, which will be able to internally fund additional development work, as well as distribute dividends to its shareholders.
“Management’s confidence in the asset and the roll-out of the work programme is reflected in a remuneration package which is based on ambitious production targets being hit. This, along with the combination of exploration potential with downside protection, has resonated with the institutional investors who have joined our register in the placing. With all the necessary permits in place, funds secured, and a proven management team which marries oil and gas experience with the capital discipline of private equity, AAOG intends to hit the ground running to rapidly achieve profitability before taking advantage of the exciting exploration play. The next few months will not be short of news flow and I look forward to providing further updates on our progress in the near term.”
The Company’s Admission Document and details of significant shareholders can be found at www.aaog.co
For further information please contact:
Anglo African Oil & Gas plc
Tel: c/o St Brides Partners +44 20 7236 1177
David Sefton, Executive Chairman
Alex MacDonald, Chief Executive
finnCap Ltd (Nominated Adviser and Joint Broker)
Tel: 020 7220 0500
Christopher Raggett, Giles Rolls, Anthony Adams (Corporate Finance)
Emily Morris (Corporate Broking)
Throgmorton Street Capital Ltd (Joint Broker)
Tel: 020 7070 0973
St Brides Partners (Financial PR)
Tel: +44 20 7236 1177
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