Africa Oil Corp.

Hello everyone, my name is Sharon and I will be your conference operator today. At this time, I would like to welcome everyone to the Africa Oil Corp First Quarter 24 Resorts Management presentation. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star 1 and 1 on your telephone keypad. If you would like to withdraw your question, please press star 1 and 1 again. Please note that at any time, participants on the webcast can submit the questions using the Q&A box on the webcast interface. Please note that this event is being recorded. The recording will be available for playback on the company's website. I would now like to pass the meeting to Mr. Shaheen Amini, Africa Oils Investor Relations Manager. Please go ahead, Mr. Amini.

Thank you, Operator. On behalf of management, I thank you for joining us today for our first quarter 2024 results presentation. On the call today, we have President and CEO Roger Tucker, our CFO Pascal Nicodem, and our Chief Commercial Officer Oliver Quinn. There will be a presentation for around 25 minutes before we go into the Q&A session. First, I would like to remind everyone that remarks made during this session are subject to forward-looking statements which involve significant risk factors and assumptions that have been fully described in the company's continuous disclosure reports. The information discussed is made as of today's date and time, and Africa Oil assumes no obligation to update or revise this information to reflect new events or circumstances, except as required by law. The company's complete financial statements and related MD&A are available on the company's website and on CDOT. Roger, we are ready for you. Please go ahead.

Thank you very much, Shaheen. And if we can get up. So what this shows is that we have had an extremely active first quarter of 2020-2024. And you can see on this timeline that since I started is where it starts. But if you actually focus in on the first quarter, you will see that we've had a significant number of transactions, which has effectively changed the shape of the year. One was the farm out to Tal of our interest or part of our interest in impact in Namibia in return for a full carry right the way through to... And this was, as you can imagine, an incredible transaction. And so we have completely de-risked that part of our portfolio. In addition to that, we then continued in March with the farm out again to block 3B, 4B in return for a too well carried through the initial expiration phase of that block. And we anticipate that we will see drilling in that block in 2025. We have effectively removed all CapEx from the company on a point forward basis, therefore significantly de-risking the future of the company. Then in March, you will also note that we have made an offer to the minorities within impact to increase our interest, our equity interest holding in the Namibian block, and that process is ongoing. So the next slide, let's go and look at what underpins what we're trying to do with the company. So the next slide. And so what we're setting is these are our strategic principles. It's not a strategy, but it's our principles. And if we go around the circle in the center, we are going to grow our business through the existing portfolio. And the existing portfolio, which we'll go on to look at, is based around Nigeria for our production, Equatorial Guinea, The developments that we're now into with exploration in Namibia and our carried exploration in 3B, 4B. We are partnered with Tier 1 operators, notably Total, as I've just mentioned, and Chevron. And we're going to try to maintain our interests and focus our attention on our existing assets. In other words, you're not going to see us leap into a new country entry or anything like that because we believe that we've got significant running room within the assets that we hold. You can see that a key fundamental element of this is that we're going to try to consolidate our own assets and we're in the process of doing that at the moment in impact in Namibia. And our current growth strategy is to grow around those existing assets. Next slide, please. And so let's focus then on what you're only going to hear us talk about. There is still some noise in our portfolio, which we're trying to clean up. And I'm sure there's going to be questions about that at the end. But you're going to see us talk about Nigeria, which is where we are actually in three fields, which are three of the top five fields in the whole of Namibia, operated by Chevron and Total. You'll see us talk about Equatorial Guinea, where we've just entered as an operator, are in the process of trying to farm down that area. You'll see us talk about Namibia. We're in with Total, another world-class operator there. And you'll see us talk about Block 3B, 4B in the western side of South Africa. And we believe that what we're doing at the moment is creating from the position that I inherited, effectively a world-class independent EMP company exposed to some fairly significant growth opportunities and very stable production base. So next slide, please. So let's go and look in some detail at what we hold. And if anyone's been with us for a long time, you will actually know this. And one of the things which is different in the way that I am describing the company since I came in is that we often used to just say that we produce circa 20,000 barrels in Nigeria. In actual fact, what we do is we have an equity interest in the three fields which are actually doing over 300,000 barrels a day. They are mature, well-known, stable assets. And what's going on at the present time is shown on this diagram. First of all, Our OML 130 was extended for the 20 years, which gives you an indication of how long those assets are going to produce for. We have an ongoing drilling program, and that actually is ongoing at the present time, and we've just extended the rig to continue drilling in Agena. And so the next slide, please. And in this area, you are going to see organic growth because the pray away field in PML4 has gone through the process and we are preparing to develop that field which will add fairly significant production to us, about 6,000 barrels a day. But again, a very material development. see on the bottom bullets here, that is actually going to produce at a gross level of 65,000 barrels a day over the existing infrastructure. So a big, big development that we have a reasonably material position in. And then if we leap down and have a look at what's going on in Namibia, we're in two licenses there, but they're both encompassed by the red line around the two of them. And this is an area receiving significant activity at the present time. And what we have in this area is a very significant major oil discovery. where Total are beginning to feed out into the market, the sheer scale of this. The first field, Venus, has been now drilled and appraised by four wells, which have been tested, the most recent of which is Mangetti, up in the north of the block, which is a fantastically interesting well because that is an extension of the Venus field, We also tested a younger fan on the top of the Venus reservoir, which is also hydrocarbon-bearing. So we now effectively have two fields identified in this area, actively reviewing development options. And you will have seen that Total is beginning to present data both on the subsurface geology and in their capital markets they have given an indication to feed on the development which will be Venus sometime this year. Next slide.

What I'm going to do now is pass this over to Pascal and I hope

I can see the slide.

Thank you, Roger. So, yeah, let me go through the financial highlights for the quarter. We are posting for the quarter a $3.5 million net income, which is relatively lower than the usual run rate profit that we are posting. And this is due to a loss that has been posted by Africa Energy. their working interest in the 11B, 12B block in South Africa by $114 million. So we have picked up our net share of that impairment via Africa Energy directly, but also indirectly via our ownership in impact. So as a consequence, we've also reversed part of the impairment that we had also booked in the last quarter, so we reversed more or less half of that net loss, which means that the net impact this quarter of that Africa energy loss is about $14 million net to Africa, which explains the relatively low net income in this quarter. If you look on the right-hand side of this slide, you can see that The prime performance has been stable. We are having continued strong EBITDAX and cash flow from operation, $95 million of EBITDAX for the quarter and $77 million of cash flow from operation, which is explained by sustained strong production. As Roger mentioned, we have two new wells in production on ACPO. The actual net entitlement production for the quarter has been in the upper range of our guidance. And as Roger also mentioned, the current REIC contract has been extended until October, so we expect to see continued improvement in production in the second half of the year. Next slide, please. So this shows our discipline we've continued to be in terms of managing our liquidity. We started the quarter with $232 million of cash. The main use of that cash during the quarter has been the shareholder return program via the payment of a dividend end of March, about $12 million, and the continued purchase of share since January 2024. when we restarted the share buyback program after the announcement of the farm down to total. So in total, we've returned in the quarter more than $25 million to the shareholders. And our cash balance is now down to $195 million. Prime has continued to have stronger cash balances. The prime net debt was at the end of the quarter $240 million. And combined with our own cash balance, it's a net debt position of $45 million. Next slide, please. In terms of voice sales, again, very stable behavior. Again, this quarter, we managed to get a sale price, which is higher than the average debted brand for the quarter. which is due to the efficiency of our new marketing strategy, as I explained in the previous quarters. And we achieved more than $85 per barrel average sale price versus an $83 average brand over the same period. And post-period, we also sold Prime Assault 2 cargos, again with average sales of $93 million. $93 per barrel, sorry, compared to an average rated brand of $90 per barrel. Next slide, please. So focusing on our capital framework and the main priorities that the company has, I think we've explained that in the previous quarters, but we want to keep a strong balance sheet Prime continue to deliver and repay their RBL facility and the objective in the medium term is to get their RBL facility extended in order to make the amortization of that debt profile smoother. On our side, we are working with our lenders at the moment to extend our corporate facility and we've obtained credit approvals from our four banks to extend the existing facility. for another three years at a lower amount because we believe that at this stage we don't need so much available liquidity, so it will be renewed at a level of $65 million initially against the existing $175 million. And in terms of order of priority, organic growth, of course, we are focusing on developing our existing assets, the farm down to a total in Namibia, has been very good news and has free our balance sheet basically from potential capital expenditures to come in the future. And therefore, the new focus on shareholder returns and the resumption of our share buyback program, we've completed about 38% of that NCIB since January. And since 2022, we've returned $130 million to our shareholders. Next slide, please. And I will hand over to Oliver now.

Oliver, can you hear us?

You may be on mute.

Yeah, thanks, actually. Minor technical difficulty. Thanks, Pascal. So I think, you know, Roger mentioned earlier, we, of course, announced in an offer to impact minority shareholders to acquire up to an 8% incremental stake in impact at a valuation of 100% impact at $805 million, which would have been a maximum spend of $64 million. Again, the rationale is, of course, as we've talked about on this call, consolidation of the current portfolio with the capex taken out of of impact in Namibia through the Total deal earlier in the year, it represents an important long-term growth opportunity for us. So more impact, we think, provides extra strength in that long-term portfolio. So the process has gone well. I think, as you'll see on the slide, we're nearing the end of that process. And we'd expect to close and give an update on the final conclusion before the end of the second quarter, so kind of next six weeks, really. Next slide, please. So I think, you know, just as a brief comment here, you know, we've talked about consolidating the current portfolio. I think we've made kind of good progress on that. The transactions, obviously, Namibia, South Africa, again, as just discussed, buying a little bit more of impact. So that helps. And I think there's a couple more things to go there. As Roger mentioned earlier, there's the wider kind of legacy portfolio that we're working on to simplify as well. So I think, again, that's the next step is to try and just continue, if you like, the simplification of the business. And again, to the capital framework, it's discipline on capital and simplification. And that will be the focus as we move into the third and fourth quarters here. I'll hand back to Roger.

Thank you very much, Oliver. The next slide, which is now up. The strategic priorities that we focus on, and this has evolved since I've been here, The easiest place to consolidate your business is in assets that you know, and so we will continue to attempt to consolidate and beef up our portfolio in existing world-class assets. We are going to maintain our financial flexibility in order to accelerate growth, and you will hear as we go through these presentations that we're now focused entirely on capital allocation, and you've seen the benefits of that by removing all capex from the Futureport portfolio, and we're also at the corporate level completely debt-free. We're focused on shareholder returns, and as you've seen, the moment that we managed to farm out and remove the capital risk, if you like, of investing in the development in Namibia, we recommenced a very significant share buyback program which is continuing today. And always to maintain our balance sheet strength when we then use that balance sheet to try to identify additional growth opportunities. And with that, I'm going to pass this over to Shaheen to administer the Q&A session which we will

the three executives that you've got on the on the table around the table thank you very much uh thanks roger um sharon if you could remind people on how to submit their questions on the conference call please thank you to ask a question you will need to press star 1 and 1 on your telephone and wait for your name to be announced to withdraw your question please press star 1 and 1 again If you wish to ask a question via the webcast, please type it into the box and click submit.

We will now go to our first phone question. One moment, please. And your first question comes from the line of Theodore Sven Nielsen from SB1M. Please go ahead.

Good morning, guys, or good afternoon.

Thanks for taking my questions. A couple of questions for me, actually three questions. First, on guidance. You have provided production guidance to working interests in the range of 16,500 to 19,500 per year. I noticed that first quarter production was 17,000 approximately. Is there any downside risk to that, or should we expect production to stay flattish at the current level throughout the next few quarters? And second question is on the Venus capex. Of course, a great deal you did there on the farm, but could you just remind me of the estimated value of the capex carrier? And then finally, the question is on the clean-up. of the entire structure with the impact eco atlantic and and african engine of course you briefly discussed that but it could just give us an update on how we should expect this to to look like going forward thanks okay um

Shane, there were three questions there, but here in Montreal, actually, that didn't come across terribly clearly. Can you actually just summarize the first question?

Yes, so the first question is on production guidance, and do we see downside risk over the next few quarters to that?

Pascal, do you want to do that, or do you want me to do it?

I can do it if you wish. So, I mean, it's clear that production in Nigeria has been declining. When looking at the Q1 last year, production was higher, obviously, than this quarter. But as Roger mentioned, the current drilling campaign has been extended. So we expect this decline to continue to be compensated by this new wealth coming on stream. So we had recently two new aquifer wells that came on stream, which is extremely good news for us. So we expect these new wells to at least compensate for the decline. So the answer to your question is yes, we expect the production to be at least stable for the rest of the year and probably increase slightly.

Yeah, I'll just add in there. What you're saying in the Q1 numbers is a work program as well. I mean, the shutdown was extended slightly, so we lost production there due to the shutdown. And we are actively drilling. But these fantastic fields are over their peak of production, and they will decline over the next sort of 30 years, if you like, on a steady basis. There is no indication that there is either a subsurface problem that we don't understand or a problem with the infrastructure on the surface. You'll see it is an effect of a delayed work program, and there is no fundamental problem with the underlying asset. It's a delay in the work program. But at some point, these assets they are going to decline. And that's actually one of the great things about them. They are so well known in the subsurface. When we give you guidance on the production, barring some major issue in the operability of the infrastructure, they will perform as we predicted. They're extremely well known in the subsurface. Pascal, do you want to add anything more to that? No, no, not at all. Next question, Shaheen, if you want to just cover that off because we couldn't hear it exactly.

Yeah, it's on Venus CapEx. Could you just remind listeners and participants on the expected value of the CapEx carry?

Yeah, and so... We can't give you the exact number, but you can start to work it out yourself because Total have indicated that we are already into a two FPSO case on Venus, and you'll have seen that from their capital markets day. Although, strangely, the headline in offshore and all of the industry pundits Talk about 180,000 barrels a day. That is actually per FPSO. And there are two on the way. Now, you can work out the numbers now and start to get a slightly clearer idea of the numbers, but I can't give you the internal numbers from total, but it is multi, multi billions of dollars that is going to be spent in this. And as I say, we are completely carried through it. And that's all I can give you at the moment, but you can go on to the, you know, and talk in the industry about how much two FBSOs will cost you, and you can work out that what we've got here is a very, very significant carried situation that we've managed to negotiate.

I think Theodore's line is still open, so before going to his third question, I want to revert back to him and to see whether he has any follow-on on the responses to the first two questions.

Well, no, actually, I think I'm fine on all of that. Maybe also importantly on production, that there's no downside risk on the current kinds, as far as I understand, but is that correct?

Yeah, what we're trying to point to here is, I mean, this is the oil and gas industry, but as we model it at the moment, what we need at the field, we are happy with our guidance on Nigerian production. Sure, understood. Next one.

And I believe Teodo's third question was to do with our non-core assets and how the company could be looking in the future. Teodo, do you want to elaborate on that and perhaps repeat your question if necessary?

Yeah, sure, absolutely. You already discussed it briefly, but I just wanted the structure you have with the impact, eco and Africa energy, and then maybe a particular eco and Africa energy. How should we expect this structure to look like in the future? Are we looking to divest the eco, Atlantic and or Africa energy shares, or will that be merged into Africa oil, or what to expect here to get a simpler structure in the future?

Obviously, We've got any sort of forward statements in here because we're actually talking about the Q1 results. But then I pointed to in the presentation that we are actively looking at rationalizing our portfolio. And I would prefer us to get a historic way that we've held equity interests in companies. And so we are looking at options for those which we are evolving as we speak. But I won't give you a forward statement on what we're going to do, but it is what is going on at the moment.

Understood. Thank you.

Thank you. As a reminder, if you would like to ask a question via the telephone, please press star 1 and 1. I will now hand back to Shaheen for web questions.

Thank you, Operator. Just a quick note from me. There was one question on the webcast on why there is no video broadcast for this event today. The management team, because of business travel, are actually joining you from three different locations. So that's the reason why for this particular event. And we haven't followed our usual approach of broadcasting video. So let's go to questions submitted over the webcast system. And there's a couple of questions to do with special dividends. So they're kind of related. So let's get them addressed in the same go. So there's a comment that's on slide 13. There was a reference to a special dividend upon monetization events. And the related question is, what needs to happen for shareholders to see a special dividend? So, Pascal, you may want to address this, please.

Yeah, sure. The question is about special dividend in case of monetization. Well, we don't plan to monetize any of our assets at the moment. We had potentially the intention before signing the firm down to Total to monetize our participation in Venus, which has not happened since we prefer to stay for the longer term in the development. There is no envisaged special dividend that would be related to a monetization event, for sure. I'm sure the investors and the shareholders have noticed that we have significantly stepped up our current returns to the shareholders, especially via the share buyback, and we are buying our shares at the moment at almost the maximum rate can buy the shares at, both in Toronto and Stockholm. We want to preserve some liquidity. As you know, we have an outstanding offer for the impact minorities at the moment. So until we know the final result of that process, we want to remain cautious in terms of managing our liquidity. So therefore, I would say to answer the question that we are fully committed to the existing NCIB. And depending on the outcome of the offers we've made to the unpacked minorities, we might reconsider this or increase the pace of the returns.

And I suppose the very important underlying message here is that we remain fully committed to shareholder capital return. So at some time in the future, there is a liquidity event. At that time in the future, it is possible the company subject to board approval could pay a special dividend, but that is part of our commitment.

Exactly.

And see what happens in the future. Thank you, Pascal. Right. There's a question on Prime's cash and debt balance. So they have $268 million in cash and $750 million outstanding in debt. Why don't they pay down debt? And the following question from the same participant is, have the actual wells met expectations? So Pascal, perhaps you could tackle the first part of that question, which is Prime's debt management.

Yeah, sure. The shareholder agreement we have with Prime provisions that Prime needs to keep at least $150 million of cash balance at all time. So the fact that they have slightly more than $150 million of cash at the moment is exactly because they are planning to repay part of the RBL facility in the next quarters. from their existing cash balance. So that's certainly done. And the way the RBL facility works is that there are six monthly redeterminations where the banks at the end of March and the end of September are basically determining the new maximum outstanding amount under the facility. So prime would typically wait for April, May to repay the Boeing based out to the maximum level and then again in September. So that process is ongoing and the fact that they have more cash at the moment than the $150 million is just to prepare for future amortization and also the fact that they are paying cash flows at the moment for the drilling campaign. So the two elements explain why Prime has this slightly larger cash balance than expected.

I'll go first in trying to address the second part, which was on the ACPA Wells performance. Yes, there were two ACPA West Wells that were completed in Q1, as we have described in our first quarter 2024 MD&A shareholder reports. Those walls did exceed expectations. However, please recall that the aqua field then went into a planned maintenance shutdown. That program is over, and the field is ramping up. So we will be able to provide further updates on that in due course when the field is out of this ramp-up phase. I don't know if Roger, Oliver, Pascal, you want to add anything else to that on the ACPA wells?

No, I don't. I think that's absolutely accurate. The wells have come in as predicted with pursuing an active program, and so they gave no surprises at all.

Very good.

There's a number of questions on Namibia, specifically on block 2913B. So this is Venus and Mangetti. One question, when do you expect that there could be a possible appraisal on the Mangetti family?

Well, the Mangetti world came in in a very favorable situation, if you like. And at that time, what we were doing, what the other operation was going on, is we were acquiring the 3D seismic to the south to make sure we got a complete coverage of 3D over the whole block. And as I mentioned to you in previous calls, one of the reasons that we wanted to stay in this license there wasn't complete 3D in the south, and we liked the look of the Damara prospect. Now, what then happened is that 3D seismic that was going on in the south of the block was temporarily terminated, if you like, and the acquisition of 3D seismic moved to the north and east of Mangetti, which gives you an indication we like the look of this Mangetti discovery. Now, on the map that you can see that we have up there, what it looks like is that the Mangetti fan heads off the block, it's very significant on our block, but it heads on to the Chevron block up towards the GALP discovery. And it will undoubtedly be appraised, but who's going to do the appraisal? Is it going to be us or is it going to be Chevron? How is this going to work? So I cannot guarantee to you that in 2024, Mangetti is going to be drilled on our block. It's highly likely that the extension of that feature at some point in the near future will be drilled because it does look extremely attractive. That's basically all I can say at the moment. So don't wait necessarily for it to be us and Total that do it, but that feature is going to get thrilled at some point.

I think it's important to highlight that obviously during this most recent appraisal exploration program on block 2913B, operator Total Energy has acquired a lot of data. And they also have shot 3D seismics. So there is a pressure probe of data that needs to be processed and analyzed. And as we've always said, we will update the market in coordination with our invested company impact and operating total energies when there is a material work plan confirmed.

And what I will do is, whilst we're supposed to be talking about the Q1 results, there is another well immediately adjacent to us that is very important too, which is Shell's Enigma 1X, which is also a success and you can plot it on a map and see where that is. And that is what looks potentially like a significant discovery is right up there from our DMARA feature. And so as I've tried to explain when I talk about Namibia, we're in the midst of the development, if you like, of a major new global petroleum province. The drilling isn't all going to be ours, and you need to keep your eye on what the other people are doing. And I think I've seen some of the questions that people are asking about what GALP has discovered and whatever. And you're going to see that we are in a very privileged position as a very small, relatively small independent, exposed to drilling that's going to go on around us, which will delineate the shape of this entire province, and that's going on as we speak. And it's very, very in the development of this province, because the first discovery in the area, which was a shell discovery, only occurred in 2022, and it's just been one after another in the area. There will be a limit to it at some point, but the industry is going through a learning curve on how these reservoirs work, the distribution of the hydrocarbons, and it's important that any investor in us keeps their eye on what's going on around our block as well as what we're doing on our own block.

Yes, and there's a question that does specifically mention GALP because GALP did put out a press saying there's 10 billion barrels of oil equivalent in place on the Mopane discovery. I suppose that some of our shareholders and investors are continuing to wonder when can we expect to have similar statements, say, on Venus or Mangetti or other opportunities that we have in our portfolio.

Well, I think it's interesting to... I mean, it was a fantastic press release. I mean, there's no question about that. And the motivation behind it, I mean, GALP are going through a farm-out process at this time. But then if you go to the Total Capital Markets Day, what Patrick said when he was asked a very similar question, and I would tend to agree, it is very, very early having just drilled two wells to say exactly what the in-place reserves are. It is a very bold statement. We haven't actively seen all of the data. GALP is a very well-respected company. But it is going to take a while to work out exactly what the... And what I will say is that you've seen that Total have announced that it's a two FBSO development. What you're going to start to see, because these are such big developments, is it's going to be reserves producible by each FPSO. And the positioning of the FPSO, the resource base, is a really critical thing to work out so that you maximize the overall recovery. And that is the work that is ongoing at the present time. In terms of when we can make an announcement, what we have to do, because of the way that we hold our interest in this, is follow Total. And Total will, hopefully, when they go into fee, make a more fulsome announcement of what the reserves base is. But we will follow Total as a good partner.

Very good. Thank you, Roger. I think it's only fair to give you and Pascal a break. And maybe we could put a question to Oliver, if that's OK with you, Oliver. But we have a question on basically capital allocation and the long-term strategy for the company. The question is, how do you measure and calculate return on investments? And what hurdle rates will you have? As an example, would you have a threshold internal rate of return in around 20% for investments. And I know you've been very busy, Oliver, with some of those strategic points. Are you able to shed some color on our thinking?

Yeah, thanks, Shaheen. I think it's a good question. I think there's probably a couple of ways to address it. I think the first one, of course, is what's our cost of capital, right? And particularly, what's the cost of capital in the you know, for the company, but in the jurisdictions that we're in, right? And I think, you know, we think about IRR and Nigeria, where, of course, we've got production through Prime. You know, we're not going to do things there that are low rate of return, right? I mean, there is a, you know, typically a discount around the NAB and the asset value that you get for assets in those jurisdictions. So, again, that drives, you know, as we talk about in capital allocation slide here, drives a discipline around that. I think the second point is, I don't think it's probably not helpful to put a specific number out there because it's opportunity specific. Of course, some of the infill wells that Roger and Pascal talked about, they have very high IRR because they pay back extremely quickly. There are other things with lower but robust IRRs, but they're a different shape of profile and longer term cash profiles. We're in fairly active mode. You see that through the transactions that we've done. So just simply commercially, I think it's not advantageous to throw numbers out there that might distract us from executing there. But I think, again, I'd point to the capital allocation framework, the discipline, and the execution around that discipline, both in taking CapEx out of the business and, as Pascal talked about, the share buybacks, which tells you how we... ultimately see the value of the money, if you like, in returns.

Thank you, Oliver. There's a couple of follow-up questions on FPSOs for Venus. I think first to say that at this stage, the operator still is analyzing data and developing a potential possible development concept And the questions are, are there going to be two FPSOs producing from the beginning? And we haven't said that, but Roger, perhaps you just want to clarify that point, that it's likely, well, not likely, but it's possible that there could be two FPSOs on Venus, but they're not necessarily going to be there producing in parallel from day one, correct?

Listen, Often people say that this is the first time they've ever seen anything like this and it's unique in the world. I actually was lucky enough to see a very similar situation playing out with the development of the Santos Basin, and I believe that this is going to follow the same route. There will obviously be a phasing of when the FPSOs arrive. It would be extremely rare if both FPSOs would be at the same time, maybe not even in the same yard. But there is a commitment to start the development with two FPSOs. What the delay in between the first and the second is dependent on the way that these FPSOs come through the yard process. I can't think of a logical thing to do to try to commission two at exactly the same time and it would be more cost effective if you did one and then another arrived and then the same team carried on and commissioned the next one. But this is me talking and it's not what Total has in public and all I'm doing is give you my experience after living through a very similar thing with BG in the Santos basin. Does that answer the question?

It might be worth just refreshing people on the carry as we talked about earlier and the development funding and how that works in that context because of course it's all spend on the blocks pre-first oil. So even if you go down a road, as Roger described, where you just, let's say there's a phased development of two FPSOs, of course, the spend on the second FPSO up to the point of first oil on the block PSO is also covered. So I think that's a really important component that we're actually insured against that development timeline, if you like. So if it comes very aggressive and very early, that's okay, because we're carried, and if it comes later, that's okay, because we're receiving cash flow from the asset to fund our future obligations.

So, yeah. Thank you. I think that does answer the question well. We have three questions from one of our long-standing shareholders. First one, will prayer weight development cost be cost recoverable against the production from a G9 Agco or only from prayer weight? pascal do you want to have a go at that or i'll be happy to start and then you can correct me if i get it wrong let's go ahead so uh first of all here on pro way uh one thing is that uh well certainly my understanding is it will benefit from a five-year royalty holiday so that's a positive so that that needs to be accountable and that um basically prime uh is now paying a corporate tax right But, obviously, in terms of the cost recovery, that will come under the PSA arrangement. So, yes, it will have the benefits of that under the PSA for those assets. Pascal, do you want to confirm that or tell people? Yes, confirm.

Yes.

Excellent. Thank you. So, second question from our investor. How much maintenance-related downtime was there in Q1? But do you know how much downtime do we expect in the second quarter? Well, certainly, we didn't have any downtimes on was only on . And I believe that starts on 19th of March. So in Q1, we would have had around 10 to 11 days of downtime. Roger, do you have any expectation for number of days that fields could be done in second quarter?

Or Pascal?

What we know from that planned shutdown, it took slightly longer than expected and that at the moment they are ramping up production again. We are not back to the previous production level, so it's now mid-May. So there will be definitely an impact on production for the second quarter.

Okay. But we don't expect any impact on Eginra or Agbami for this quarter? No.

Very good.

There's a couple of questions on Equatorial Guinea. Basically, people want an update, and do we have a timing expectation for the farmland of EG31 and EG18?

Yeah, sorry we lost you for a second, Gene, but I can take that. So I think the process is ongoing. There's been several companies through that data room I think the guidance that's probably most useful is that you go back to capital allocation framework and what we're saying there is we're going to be very, very disciplined about spend, particularly in the kind of early stage pre-production work. So I think what we're doing there is saying, look, we should take a little bit longer, but take a little bit longer to see that that fulfills those strategy, if you like, that gives us a place where there's minimal zero capex in that. So, you know, there's probably slightly longer than people are expecting, but I think that's the reason is to, you know, again, capital discipline and ensuring that we get things fully funded through those transactions.

Thank you, Oliver.

Operator, can I just check with you? Are there any further questions on the telephone line?

There are currently no further questions on the phone line.

Thank you for checking. Right. There's a question on our, effectively, ownership of assets in Nigeria. Are there plans underway for us to consolidate those? Is that... Well, we have indicated that's one of our aspirations, but Oliver, perhaps you'd like to share your thoughts on that.

I think we may have lost Oliver and Roger again.

Hang on. Sorry, what I'll do is cut across that. I mean, it's a good question, but what we need to do is focus on the Q1 results that we've just published today. We have an aspiration to consolidate in the assets that we like, but we're not going to today give you any indication of the type and the durability of any of that that you've seen from the transactions that we've done in this first quarter that it is pointing you to a direction of travel that we are actively pursuing. And I think I'd prefer just to leave it at that, Shaneen, if you're happy with that.

No, absolutely. I think that's a very fair comment. Very good. Sorry, I'm just looking at the remaining list of questions. There's one question on what is the company's relationship to the Lundin Group. I will take this one. The Lundin family did exit the position and we were very fortunate that we had the Blue Chip International Fund that took that position and are now a second largest shareholder in Africa Oil.

Which is Fidelity.

And I think on that note, yes, I think we've answered all these other questions that I still see on the queue. And we've only got a minute left. So on that note, Roger, do you have any final comments that you want to share with the audience?

I don't think I do, Shaheen, unless you think that we missed something. And I'd just like to thank everyone for dialing in and listening to this. And just watch this space because we are in a very active mode. And that's all that I will say from my point of view.

Thank you, Roger. A final comment from me. We will be hosting our AGM next week. On 23rd of May, I will be preparing a press release with details for shareholders that want to join a Q&A session. And we expect to send the details of that later today. So yeah, just a reminder, our next event is our AGM next week. And please, operator, I'll hand it back to you to end this call.

Thank you this concludes today's conference call thank you for participating you may now disconnect.