Africa Oil will be acquiring up to 8.0% of the issued shares in Impact OIl & Gas from minority shareholders
The company is offering a price of US$0.728 per Impact share, for a consideration of up to approximately US$64mn, which implies a valuation of US$805mn for 100% of the issued share capital of Impact. Africa Oil currently holds a 31.1% shareholding in Impact.
The share purchase is conditional upon completion of the farm down transaction for Impact's Namibia assets announced on 10 January. The Offer is made to select minority shareholders and is open for acceptance until April 5, 2024. Africa Oil is under no obligation to purchase any specific number of shares in Impact.
Africa Oil CEO, Roger Tucker, commented, "The farm down agreement with TotalEnergies materially enhances Impact's investment case for Africa Oil. At no upfront cost, we retain exposure to the Venus development, and to the significant follow-on upside potential on Blocks 2912/2913B. Venus is expected to add significant reserves and production to Africa Oil's portfolio from the late 2020s through the 2030s.
"This measured advance in our strategic shareholding strengthens our influence over Impact, in line with our objectives for 2024. These include positioning Africa Oil as the leading Independent E&P company in the Orange Basin, underpinned by its interests held through Impact, and its direct position in Block 3B/4B with a retained 17% interest on the completion of the farm down agreement with TotalEnergies and QatarEnergy, announced on March 6, 2024.
"This is a calibrated capital allocation step, reflecting Impact's ability to drive Africa Oil's valuation and future growth, taken alongside our share buy-back and dividend programmes, currently underway. We are determined to build the value of our business while also offering our shareholders immediate capital returns. From today, we will increase the daily volume of share repurchases under the current buy-back programme.'
