RE:Invest In The 8th Largest Discovery Of The 21st CenturyGreat find, I was poking around a bit more and was able to view the entire artice from this link.
It 'claims' the second Venus well results are expected by the end of November and also offer a potential reason Total would hype the numbers for months and then inexplicably barley even mention Venus.
Since Total's inmvestor day this nobody investor could not help but smell a big stink and also could not help but think that I had just witnessed in real time yet another of the many AOI Pump Me Deep and Hard and Dump Me Even Harder.
Here is some of the article:
Summary
- Africa Oil owns a 6% stake in the Venus discovery, the 8th largest discovery made in the 21st century.
- TotalEnergies is the largest investor and operator of Venus. Total calls Venus "Golden Block". Total is spending 50% of its global exploration budget on Venus.
- Retail investors speculated on Venus's size disclosure during Total's Capital Market Day through Africa Oil shares, causing a 30% drop in its share price. That made the opportunity more attractive.
- The second Venus well results are expected to be published by the end of November. That should further certify Venus's size and push the Africa Oil stock up.
The Opportunity - Share Price Down on Speculation by Retail Investors
- During 2023, Total hyped Venus. Total used very strong statements on Venus's size. See the FT article for an illustration.
- The market expected that Total would use its well-advertised Capital Markets Day on 27 September to provide details on Venus's size. Many retail investors speculated on this through shares of AOI.
- The speculation did not work out. Total did not publish any material update on the Venus size on Capital Markets Day.
- Total only stated that Venus will proceed to commercialization, and the deposit estimate size is at least 1-2 billion barrels. They also announced that Nara, an adjacent plot to Venus, showed a non-commercial deposit of oil.
- Total communication drove AOI share price down by 30%.
- This creates the opportunity - the stock was pushed down while strong catalysts on Venus are due by the end of November.
- Total is drilling a second well in Venus. The flow data that should reconfirm the Venus size should be published by the end of November. That should re-rate the AOI share price in my view.
Total's Capital Markets Day Drove AOI 30% down and made AOI the worst-performing Scandi Oil stock.
Why did Total not Publish the Data?
- I believe Total's cheering up the deposit in the press was unusual. Conventional practice is to limit disclosure for deposits set for production in about five years.
- There are speculations suggesting that Impact Oil may sell its 20% stake in Venus. AOI holds a 31% stake in Impact Oil.
- Total might be an interested party to buy Impact's stake in Venus.
- If they would not buy, they would at least prefer to have a say in who the buyer is in my opinion. Total has, therefore, a low incentive to help prospective buyers be attracted by robust flow data.
- Qatar could be an ideal buyer; they are a strategic long-term player. They may be less price-driven. Qatar is mainly working with Total - they are together in Namibia, South Africa, and Guyana.
Venus Massive Field's Potential
- Total declared Venus will be developed.
- Total's conservative estimate places Venus at 1-2 billion barrels. That is a very conservative assessment, according to AOI.
- Wood Mackenzie's report from 3rd October 2023 highlights Venus with a potential of 4.4 billion barrels boe (3 billion oil + 1.4 billion gas), assuming a conservative 30% oil recovery.
- The flow data disclosed by the end of November should help to fine-tune the size of the deposits. It will be the major catalyst for the stock.
Catalysts
- Venus's results will drive the AOI's share price in the near term.
- The second well results, expected by the end of November, might spark a material share price rebound.
- The major catalyst would be the sale of an AOI stake in Venus to Qatar or a similar investor. The transaction value is hard to assess but could easily beat the whole AOI Enterprise value in my view.
- Africa Oil has a 30% stake in Africa Energy, which is the owner of a 10% stake in Block 11B/12B, a major gas liquids deposit in South Africa. Rumors suggest the operator Total is close to sealing an off-take agreement with Eskom.
Conclusion
Africa oil is down 30% in the last few weeks. In the short term, the share price will most likely be driven by Venus's news flow. The second well results from Venus should be available by the end of November and should re-rate the stock.
The potential sale of AOI's stake in Venus would be game-changing for Africa Energy and its shareholders.
Total is spending 50% of its exploration budget this year on Venus. I think Total believes in Venus. Investors should at least study the opportunity. Africa Oil: Invest in 8th Largest Discovery Of This Century | Seeking Alpha GLTA.