Africa Oil Corp. T.AOI

Hedge Disclosures

[Malpeque2]

My guy in Canada says the Hedge Book disclosure in Canada under IFRS is not sufficient.

Prime has the hedges.   Africa Oil owns 50% of Prime and is the reporting entity.  

So what we are looking for is specific disclosure on who the counter party is,   and the specific volumes and prices of the product in the "hedge book."    And Africa Oil does not provide it!

They say the cargoes are hedged!    Well then which cargoes in which time frames of delivery and what prices are each "cargoe" hedged at.    This is material financial information to the public market.

And now there is possibly some inconsistencies from June Q to September Q in the filed financial statments for Africa Oil about the price and volume summary information for 2022 hedges.

[Rsoleblocka]

Interesting comment and as an investor it is important have all the information to make educated decisions. Thank you

[firstworld]

Prime is a third party entity they have a stake in no need to disclose anything I don't see sumcor or any of the others disclosing hedge counter parties. Better if not hedged at all the earn 20% more haha.

[toptiger]

and pretty sure prime is not controlled by us in any way, so no need to disclose

[DAGUY]

Didn't AOI in the conference call mention (and don't quote me listen to it yourself) that they have 6 cargo's hedge beginning of next year at $69.00? My memory isn't what it used to be but i thought i heard that. 

[Ferryboy]

Daguy .. correct.  $69 for the six cargos

[DAGUY]

Sounded like large cargos too, can't remember if i heard 1 MMbl?? That woudl be 6 X $69 X 1M  If that is about right, that would be $414M or $212M AOI share.

[papaloapan]

1mm barrels is simply one normal west africa ship load (suezmax), and the number would be about $10 or so less due to these cargoes being hedged.

[Malpeque2]

AOI owns 50% of Prime.  It's easily our most significant asset. At 50% ownership their is some level of "Control". Interesting point you make,   AOI does not discuss how Prime is governed by a BOD or what kind of influence we have over Prime with the hedge decisions.   operating decisions,  and of course the payment of dividends.  So I thin Prime

[Ferryboy]

I am quite sure AOI and Prime are compliant with the regulation which are deep and complex and they have external auditors to report to that enures compliance.  I think the auditors are PwC, my old firm But you can always refer back to "my guy in Canada" ... I suspect you are that Oregon Duck guy back under another alias  .. old Dr Doom himself

[Rsoleblocka]

I like your comment and I am not aware of this oregon duck, although i may have blocked them a while back.

[firstworld]

A hedge is just a guaranteed price customer no one discloses customers. It's one of the 6 global traders that handle 85% of global oil and gas trade volume no doubt. One thing for sure is it's bankable. These are not Canadian "investment grade" contracts that are cancelled without consequence LOL.

[Malpeque2]

I know it's with a counterparty.   It's not a contract on NYMEX    I am not that concerned about the credit rating or quality of the counterparty or the name. It's the disclosure about the price and the volumes that is troubling.    They are hedging "cargoes". Someone did ask about the size of the cargoes on the conference call.   It&

[firstworld]

I wouldn't worry about it Prime's lenders have vetted the covenants and in Sweden one goes to prison for the same daily shanagians that are acceoted as normal in Canada haha.

[DAGUY]

Looking at MD&A for Q2 and Q3, only thing i saw searching for the word Cargos is that in Q2 the $ value was $57 for this year, when now it says we sold for $62.  Maybe there was an upside depending on the price of oil?? Only other thing would be to email them and ask them why the difference in price in the 2 discussions??