Africa Oil Corp. T.AOI

Prime

[Malpeque2]

AOI owns Prime 50/50 JV.   They have half the director seats.   Prime hords the cash and does not pay down debt.    No dividends lately from Prime.

Do investors really believe the Forward Sales Agreements and the AOI accounting for these contracts?

Remember two things here.    These are not  financial hedges on exchanges.    These are forward sales agreements  at Prime,   not Africa Oil.    And there is very little detail  disclosure about  the specifics of these contracts in the Africa Oil accounting disclosure in the quarterly reports and the Annual Financial Statements. 

I think the other owners of Prime are some shady Investment Bank down in Brazil.  They have been investigated quite extensively for fraudulent avtivities before.   

If I look at the timing and disclosure of when Africa Oil announces their hedge positions last year from Quarter to Quarter,  with these forward sales agreements,  it looks to me like they are not legit.     They may exist,   but exist at different volumes and prices at Prime that what we see. 

So,   I think this may be a way to skim or kickback money off the top from Africa Oil shareholders.  Prices actually realized for the oil is higher than the hedge prices.   

 Prime and Africa Oil had to hedge back in 2020 and 2021 for the debt from the acquisition,  and the debt Prime carried,  but debt has been paid down a fair bit and they are still hedging thru forward sales agreements?     The year end disclosure in 2021 sure caught they market by suprise for all the hedging at crappy prices in 2022!!     Keith was supposed to be bullish on oil.  He was the Pumper Super Bull on oil prices,  so why does he hedge by selling forward all this oil.

I thinki they want to use Prime to make the acquisition of off shore oil in West Africa again so they can continue with these "Forward Sales Agreements"   and skim,   IMO it's either a skim right off the top,  or a kickback from the counterparty to these Forward Sales Agreements.

[GoJerez2]

Malpeque2...Ive always appreciated your posting especially with respect to CDH..Now HWX in New Brunswick however....isnt that off balance sheet accounting which is illegal now since the Enron days and 2008 financial melt down? It doesnt make sense to me in particular when AOI is 50% owner of Prime.... Although disappointed at the locked in price....left lots on the table when we are so much

[ogod00]

a lot of inscrutable likely self dealing shenanigans which more sophisticated buyers seem to have 20 20 vision for, the relentless selling down in the face of what a more naive crowd would drive to 5 dollars plus makes it a sure thing that the smart money knows  there is something rotten in Sweden i m out as of today , still will look back fondly as the single best stock buy i ever made on

[basicinvestor2]

In 2020 these hedges were real and served us well. But I agree it is not done in the open now.

[radcat]

Weather it is a hedge of forward sale, management usually does this when they believe there isn't much more upside in the commodity. The hedge AOI should have done is to buy call options in the futures market equal to production to assure participation in the oil's upside just in case they "hedged" at too low of a price. They did not do this and now we have to live with the

[Lonegaurdian19]

Anyone know why production is down so much? It's def not quotas. I get they're waiting on block extension but Total can easily bring in Egina South and Perowi. Seems silly to have a massive FPSO not producing at capacity during "the best" of times for oil I can see. 

[gggggTDGreen05]

Good question - not sure why AOI management on the latest presentation is estimating working interest and entitlement barrels about 10% lower than in 2021. anyone know why?  Was the question asked on the recent conference call?  In the transcript perhaps?   could be simply management is purposely guiding lower so we barrels / cargos / results are better will help the share

[gggggTDGreen05]

Answer on decline from my AOI Swedish FB page:   "There were infill drilling and satellite tiebacks that could have come on stream earlier but some of it were I guess delayed by Covid and also I suppose waiting for the new tax regime, now signed, that will improve the investment case for offshore projects with much lower tax (less 20% tax but plus royalties) However royalty "

[Lonegaurdian19]

That is extremely helpful, thank you

[gggggTDGreen05]

No problem.  Those folks on the FB AOI Sweden group are great and some know this company inside and out!   Any weakness in AOI/AOIFF is a buying opportunity IMHO... maybe we see $3-4 this year??? Future looks bright! 

[Gasmonkey]

What's the exact name of that FB group? I cannot find it.  Thx 

[gggggTDGreen05]

Africa Oil AOI Investor Group  1.6K members and it's private  I was able to join a couple years ago... most if not all that is posted is in Swedish, but FB allows you to translate.    

[Gasmonkey]

Awesome thanks. 

[firstworld]

Speculative at best. Prime not public and no disclosure. Political risk is random. Numerous parties declaring force majeure on oil and fuel sales. No one knows if RU ships picking up cargos...Thay may not have even been delivered. They should follow the Canadian example.....unilateral contract termination force majeure covid outbreaks, attempted govt coup, RU war & sanctions....there are so