Africa Oil Corp. T.AOI

Excerpt/Malcolm Shaw-Hydra Capital

[radcat]

Africa Oil (AOI.TO, last at $3.15)

I still own AOI. It’s a great way to play Brent oil prices and the company spits out a lot of free cash (and will spit out more as its Prime subsidiary reaches its debt targets). AOI has additional potential at its offshore Nigerian assets, but what I’m really there for is the exposure to Total’s Venus oil discovery, offshore Namibia. One of Total’s partners in that discovery is a very happy junior explorer called Impact Oil and Gas, which holds a 20% interest in what could be one of the largest offshore oil finds in recent memory if you believe the industry papers (and an 18.9% interest in an adjacent block). AOI owns 31.1% of Impact, giving it an indirect 6.2% interest in the Venus discovery where an appraisal drilling and testing program is currently underway (AOI also has an indirect 5.9% interest through its Impact ownership in an adjacent block where an exploration well, Nara-1X, is currently drilling). I’m not sure what the market thinks it is pricing in for Venus and the associated upside at this point, but my thinking here is that AOI is going to get a nice lift when Total starts saying more nice things about Venus. At that point I’ll re-evaluate, but for now, I like this as a way to play Brent oil with a free call option on M&A and discovery, with a fortress balance sheet to boot.

[firstworld]

too bad no returns to SH....

[Splinnter]

Please fill me in with your calculations as I might completely missing the boat here...   Based on numbers in Malcy's article: 6.2% of 11 BBOO = 682.000.000 3$ per barrel in the ground.  682.000.000 X 3 = 2.046.000.000$ for AOI This is without the adjacent blocks through Impact Oil and Gas    

[EGF30]

The 11 billion barrel number is referring to what has been discovered in the Orange Basin as a whole by ALL companies including Shell's Jonker discovery. The 5.1 billion barrel number is referring specifically to the Venus discovery with more data expected in late September.  As the numbers were mentioned as 'conservative', easy to believe Total will want to make a big splash at

[Suppe11]

I'm pretty sure the numbers thrown around (12b bbl) were just for Totals Venus prospect. The problem is....that is the reservoir number. You can't get all of the discovered (or estimated) oil out of the reservor. The recovery rate is something like 20+-%.

[Oilminerdeluxe]

When is Total's investor day? Could be an interesting affair.

[EGF30]

I was wondering the same thing myslef a few days ago. Looks like they have a couple of days lined up on September 25th and 27th. Here is the calendar. GLTA.  Calendar | TotalEnergies.com

[Oilminerdeluxe]

Late September? Ugh, I will go nuts from waiting :-) Exciting for sure.

[argaiv]

out of curiousity does anyone know how many barrels of oil were there estimated to be in offshore Guyana before Exxon Mobil found those 10 billion barrels?