Africa Oil Corp. T.AOI

Initiated a position in AOI

[capconstrained]

Will look to add as it drifts lower.

[capconstrained]

Based upon emails with IR, current projection of USD$100mn in dividends has been stressed under $70 brent.  Assuming Brent stays above $70, USD $0.14 in dividends is a 9% yield at current prices and 700mn shares Fully Diluted after the closing of the Prime acquisition.  In addition, you're buying the company at 1.3x projected USD $800mn EBITDA with a 4% kicker in PEL 39 which is

[Suppe11]

Debt load ? Combined net debt is something like 200m. I'm pretty sure, they'll skip their 100m divi target. They already took the first step and pushed the Impact acquisition into 2025. Then they'll say Capex, Impact acquisition blabla...we stay with 5 Cents. The only unknown component are the Btg guys. The Aoi board would prefer to give you nothing and themselves more freebies for

[capconstrained]

It is unclear to me what will Prime's total debt will look like when it closes.  That is my only real concern.  Timing of the Impact close is immaterial imo. 

[hikari]

see net debt in future years (table at end)

[papaloapan]

Their math is a little puzzing. The new shareholding breakdown will by 65% current shareholders and 35% BTG.  How does this equate to 54% equity dilution The post merger dividend will triple - to approx US$ 0.144, and potentially higher based on the excess free cash flow distribution, or 10.7% based on today's price.

[capconstrained]

.35/.65 = 54%

[Esiiiii]

Hi lol, hmm how is it Canadian schools today, worse then Swedish? So 470.000.000 x 1.54 (100 %+54 %) = 723.800 is the new number of stocks with consolidated Prime. Old owners are 470.000.000 (65 %), BTG gets 723.800.000-470.000.000 = 253.800.000 shares (35 %) for prime.

[papaloapan]

Agree.  54% is an incidental but irrelevant number. If today 470mm shares is 100%, then for this to equal 65% of the new total, you must divide 470 by .65 to arrive at a new total share count of 723mm, and issue 35% of this total to BTG. 54% is irrelevan and AOI has not diluted.  We have given BTG 35% of AOI for 50% of Prime.  BTG has done this because they perceive the future of

[capconstrained]

According to IR, FD shares will be less than 700mn, fwiw

[Esiiiii]

Sure but thats because of the share repurchases previously this year, and cancellation of those shares.