Meren Energy Inc.

Hello everyone, my name is Sandra and I will be your conference operator today. At this time, I would like to welcome everyone to the Africa Oil Third Quarter 2023 results call and webcast. 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 1 on your telephone keypad. If you would like to withdraw your question, please press star one and one again. Please note that any time participants in the webcast can submit their 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. Shahan Amini, Africa's Oil Investor Relations and Commercial Manager. Please go ahead, Mr. Amini.

Thank you, Sandra. On behalf of management, I thank you for joining us today for first quarter 2023 results call. We are grateful for your interest and support. On the call today, we have President and CEO, Dr. Roger Tucker, and our CFO, Mr. Pascal Nikoda. Roger will kick-start with a brief introduction before we present the quarter's highlights, and Roger will then cover Africa oil's investment case and outlook before we go into a Q&A session. But 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 and 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 These are less as required by law. The company's complete financial statements and related MD&A are available on the company's website and on CDOT. On that note, Roger, we're ready for you. Please go ahead.

Thank you very much, Shaheen. So first of all, it is a pleasure to be presenting my first results and participating in this webcast. First of all, a little bit about myself. You have read my resume, if you like, on the new website, but I'm originally a geologist with a PhD. I went into Exxon for many years and travelled all around the world doing all aspects of geology and geophysics. I then joined a British independent that grew very, very significantly across the world called LASMO. I then had a very interesting adventure working for Mikhail Khodorkovsky in Yugos in Russia. I then did some private equity investing work. And ultimately, fairly recently, I ended up as a senior vice president in the BG group, working on stuff in the Americas and also in Europe. And then I've done a series of other private equity-based deals. I'm also a non-executive director of PetroTal, who are based in production interests in Peru. So I've pretty much worked every basin all across the world in big companies, in small companies, in NOCs, in independents, and private equity investments. So I've been here just four months now, and it has been an incredibly busy four months since I took over. We've performed a very deep review of the business that I inherited. We've been managing some very significant stakeholder relationships. We've presented a business plan to the board, and we've reorganized the organization, including bringing in some very key new recruits. including a senior vice president of business development and a in-house general counsel who will be starting in the next week or so. So as the slide says, what attracted me to this company to come into here is that it had absolutely outstanding existing assets in the portfolio. It needed to have a little bit of a reorganization, but the assets underlying the business of the highest quality. In addition, then, we have an extremely strong balance sheet, which Pascal will talk about a little bit later on. Our production, which we will describe later on, is at the highest quality with the highest netbacks. And in addition, within the portfolio, we've got some low-risk, high internal rate of return development opportunities in Nigeria. But then I suppose the crown on the head of this is our interest in the Orange Basin, which are truly world-class investment opportunities. And I'll be talking in more detail about those a little later on in the presentation. So next slide, Shane. And so what have we achieved actually this quarter? I think that we've got extremely strong operational results. The Venus 1X test result was positive, as we have described. And as you can see on the bullets on the right-hand side, the operator has indicated that this would be a field that will be developed in the future. In terms of production, we've seen an increase in our average production for the first time since Q2 2021, and Pascal will talk a little bit more about that. We've converted OML127 into the new petroleum terms in Nigeria. We received a very significant dividend from prime of 62.5 million, and we're exiting this quarter with a cash balance of $201.5 million, which completely underpins our corporate balance sheet. And so passing now over to Pascal to deal with those financial issues and production issues.

Thank you, Roger. So we start with a quick update on our production performance, especially the comparison with our management guidance. And we've been very encouraged this quarter since it's been the first quarter up in terms of production since last quarter. We are now at 23,000 barrel of oil per day compared to 22,400 barrel of oil equivalent. So this is a good outcome, and especially due to our successful drilling campaign on Aginar. Three wells have been completed, two water injectors the effect of this positive drilling campaign in this actual net entitlement production, which means that we are confident to end the year 2023 in the upper range of this production guidance. We are also drilling at the moment on Agpo. This will be the first well out of our three-well campaign. So, again, we expect this production to continue to increase by the end of the year and early next year. Next slide, please. Thank you. So this slide just shows the evolution of our financial results on net income over the last quarters. We posted a $47 million profit net income this quarter, which has been underpinned by a $57 million net profit from Prime. One exceptional item to mention this quarter is we've been paid We've also posted a $31 million exceptional adjustment due to the release of deferred taxes in Nigeria due to the switch of OML 127 to the PIA. which is also the reason why in Q2 we had an exceptionally good quarter with the release of $173 million of deferred tax liability. But that time it was in relation to ML130 when we obtained license extension in ML130, which triggered that switch to the PIA terms and therefore the release of deferred tax liabilities. Otherwise, I think this quarter has been pretty stable compared to our history of results and consistent with Prime's performance over the last quarter. Next slide, please. Thank you. This slide shows the evolution of our cash position and what I can simply say here is that we received, as Roger mentioned, $125 million of dividends from Prime since the beginning of the year. We've lived within our means, and the priority for the company has been to return part of this cash to our shareholders via the dividend or the share buyback program. So overall, we distributed a $30 million back to our shareholders in the first nine months of this year. The other priority for the company has been to continue to invest invest into impact and stand our corner on all the cash calls we've received on Venus. I think this is a key priority for the company to stand our corner in impact. And we've also increased our equity percentage in impact during these equity raises. We are now at 31.1% in impact. Other things to mention, we've started to invest in Equatorial Guinea, so that's $17 million that we have invested in exploration, Equatorial Guinea and South Africa together. We have also some exceptional items, as you see in the other columns, which is mainly a settlement we had in Kenya, both with partners and the local tax authorities for $18 million. So I think that's it on this slide. Next one, yeah. So I just wanted to give a quick update on where we were in terms of licenses in AGIAR. So as you know and we mentioned before, we have obtained a 20-year license extension on OML 130. So this has been moved into the PIA tax regime. We have now three production licenses instead of one OML in AGIAR. in OML 130, each one covering one field, so one on AGPO, one on EGNR, one on PreAway. And as I just mentioned, on OML 127, we have voluntarily converted to the PIA terms. Therefore, we are now under a corporate tax regime at 30%, which replaces the Petroleum Profit Tax System, which was at 50%. going forward. The partners on this block have also decided to request the extension of the license. And this is probably the next milestone for us in AGM. Thank you. In terms of wholesale, it's been a consistent quarter. I already mentioned that we changed our marketing approach last year, mid-last year, which has given a significant benefit to the company. We consistently have sold our oil at a price which is slightly larger than average rent. This quarter, we've been closed a bit by timing since we sold our cargoes at the beginning of the quarter, and the oil price actually increased at the end of the quarter. So that's why you will have a slight difference between the sale price we have obtained for our cargoes and the average debt new marketing philosophy in place in Q3 2022, whereby we are basically selling all our cargo spot, unless the old price goes down below certain thresholds fixed, which would trigger a full on sale in that case, which has only happened a few occasions since we put this new marketing philosophy in place. So you can see the difference in terms of values that we are getting since Q3 2022 compared to what we were getting with the forward sales before Q3 2022. So overall, it's a significant benefit to Prime and to Africa. Next slide. Thank you. So in terms of financial performance, Prime has also been very consistent both in terms of EBITDAX and cash flow. We believe that this level of EBITDAX and cash flow We remain within management guidance at the African level. So overall, it's a very good performance, again, this quarter from Prime, which is able to maintain a very stable net debt ratio. Strange, we could move to the next slide. This slide shows our net debt balance at this moment. Prime has only a $750 million loan under their RBL facility, which, as you know, has been defined last quarter with the extension of 1,130. Our corporate facility at the Africa oil level is Stephen Dolan. So we have significant liquidity both at Prime and Africa oil level with a very minimal consolidated debt level if you take Africa oil and Prime into consideration together.

What we'll do now is we'll have a look at the portfolio. I will describe how we're going to talk to you over the next several months. The first thing is you're only going to see us focus on four assets. The first is Nigeria, which we'll look at in some detail. Equatorial Guinea, which we've just entered, and as Pascal said, we've started to spend money on, and it's a very particular type of opportunity, which is, it is exploration, but it will be very quick tie-back should we be successful. You'll see us talk a lot about Namibia, and you'll also hear a lot about Block 3B, 4B in South Africa. So those four assets of what we are focusing all of our intellectual horsepower on, all of our investment potential on over the next year. And that is a significant refocus of the way that we're looking at the business. In terms of the metrics, and I'll come on to how those metrics are made up, we have two beer reserves of nearly 56 million barrels. We produce about 23,000 barrels a day. Liquidity of 376.5 million barrels. And we've got near-term catalysts of significant size in Namibia E&A. And actually also, I would add to that, in 3B, 4B. And we are returning capital via the dividend stream. And I'll talk a little bit more about buybacks later on. So first of all, let's go in and look at these assets and what they really are, rather than the way we summarized them on there. And I think that perhaps you've been a little bit lax, and maybe all of you knew this all along, but by not describing the sheer scale of the assets that we are invested in, they are three of the top five fields in Nigeria. On a gross basis, they're doing 320,000 barrels a day. And at that level of production, they do receive the A-team, if you like, of the two operators, which is Chevron and Total. They're genuinely world-class production hubs that we, with our great fortune, are in. The other thing about them is that 62% of the reserves are in the 2P category, which means that we do not anticipate any significant surprises in the subsurface of any significance. And also, the assets themselves on the surface, which are all FBSOs, have been extremely well maintained, and we don't anticipate any significant changes or uptime in those assets. Because of the extension of the licence, we do have infill drilling opportunities, and we also have a now doable new tieback, which is going to be a prayer wake, which wouldn't have been doable if the license hadn't been extended, and we anticipate getting to FID on that by the end of next year. So I stress that, again, the underlying production assets are a very significant scale, operated by majors with excellent reservoir quality. And this, I think you'll see, goes through the portfolio. We go to the next slide, then. What I'm going to do is jump down to what I now consider to be what is developing into the emergence of the new petroleum profits. And it's been focused to date up in the north in Namibia, and I'll block it, which we're in with Total and Shell, with existing discoveries. And the numbers on here are oil-in-place numbers presented by the Namibian National Oil Company. Graf is 2.6 billion barrels of in-place reserves. Venus according to them, is 5.1 billion barrels of reserves. Yonker is 2.5 and Lesby is 0.3 billion barrels. So this is a province that is emerging. And it's not the first time I've been in such a province because I was with BG when we were with Petrobras and developed the Santos Basin subsalt place, which resulted in eventually about 13 FBSOs going out there. And so I have experience in the way that these plays do develop. But what I'm going to do now is jump down to block 3B, 4B, which is actually in South Africa. And combined with our interest in Venus, we are the only independent in this new petroleum province. And 3B, 4B is an extremely interesting block. It is completely covered in 3D seismic. We are the operator of this, and we are going through, at the present time, as the rigs are marching down to the south, a farm-out process on this, because, as it says in the slide, that we have P50 prospective resources in there of over 4 billion barrels of recoverables. So people often ask me, are we giving up on exploration? We're not giving up on exploration. It just so happens that in our portfolio, we have existing exploration opportunities, which are really significant. We're in, as I said, a farm-out process at the moment, and there is a high level of interest from major companies to come into this block. And I anticipate that certainly within 2024, hopefully way before, we will have concluded a farm into that acreage. Now, to come up to our interest in Venus, in the Venus area, what we actually have got is what I believe is a world-class opportunity in Venus. As you see on the bullets on the right-hand side, what McKenzie has said, it has got 3 billion barrels of recoverable reserves. Now, go back. and think about how many recoverable reserves we've got at the moment. We have 55.6. We have a see-through equity by our 31% interest in impact of 6% in this, which would be the equivalent of us having 180 million barrels of recoverable reserves, which is more than three times the size of the reserves that we've got at the moment. So this is an asset for us that we have to focus our attention on because it is the materiality to accompany our size, and also to total size, which is of critical importance to get right. We also, on the block, because it is a very, very large block, have follow-on exploration prospectivity. We are currently drilling a well called Mangetti, which is up into the north of Phoenix. It's an unusual well, in that it is actually testing a higher fan, than was encountered, a higher fan than the Venus fan. But it will also go through that fan to target the northern extension of Venus. So it's a dual objective world. We also, as I currently know, which isn't on the slide here, are testing the Venus appraisal world. And if you go back, I can say this, there's a public website to what's it called, Zoom World, Zoom Earth, and you go back to November the 8th, and then click through, you actually put the screen for heat map on, you click through, November the 8th, 9th, 10th, 11th, I think it was, you will see that there is a major flare at the location of that world. It then goes out, because they're doing a build-up, and then it comes back on again. So we've tested hydrocarbon to surface at the Venus appraisal well. The other thing though about our block in Namibia is that it isn't, unlike 3b-4b, completely covered in 3d seismic yet. The southern part of the block, which has two significant prospects on it, called Amara and South Amara, is only covered by 2d seismic. It looks extremely attractive, but the 3D will be shot in the early part of 2024. We're in a position where we've got the financial capacity to stick with this opportunity until we understand what the full value of the entire block's prospectivity and development potential are. So in terms of next year, this block is going to become a very significant priority for us going forward in terms of capital allocation. So our year ahead priorities then, as I've said in that visit, we're going to focus on the core assets. We're going to try to complete the farm amounts of block 3B, 4B, EG31 and EG18. And if anyone wants to see a little bit more about them, we do have those maps in the appendix. We're going to be extremely disciplined on asset acquisition. And in actual fact, any asset acquisition will be in blocks that we're already in. And if it tinkers out of that, it will be in areas where we've got significant competitive advantage. And we're going to focus on shareholder capital returns. We will maintain the base dividend policy and share buybacks. We will be initiating the option to do share buybacks, but we're in a very active stage at the moment on understanding what capital we will be needing in the year ahead, that we will use the decision to start share buybacks in parallel with understanding what our investment opportunities are in 2024, but we'll be solely focused on making significant returns for shareholders. And with that, I would like to conclude and pass over to Shaheen to get us into Q&A.

Yes. So, Operator, Sandra, back to you, just to remind people of the instructions for submitting questions.

Thank you. As a reminder, to ask a question, please press star 1 and 1 on your telephone. That's star 1 and 1 if you wish to ask a question. To withdraw your question, please also press star 1 and 1 again. There are no questions on the phone at this time. Please continue with webcast questions, please.

I will do so. Thank you, Sandra. Actually, one of our analysts, Theodore, did tell me that he will be traveling. I do actually have a number of questions from him. So let's start off with that. So his first question is in Nigeria. There is an ongoing process. This is well reported regarding the

Norwegian NOC and the children's wondering whether you have any comments on this process and so this is one of the ones who aids and we we are aware of it the process and we are also aware that by our interest in crime we do have a preemption right on this this block and we will be reviewing exercising our preemption rights should that look an attractive investment opportunity for us. But we're not at that point at the present time. But I stress it is a block, an asset that is of high interest to us. It allows us to use our RBL facility, which gives us significant competitive advantage. It's in an asset that we know, and those are the types of assets that we ought to be looking at very, very hard.

We're just waiting until that time. Okay. A second question from Timothy is about if VMS is divested and AI does, Africa Oil does get a cash dividend from impact, what would the users of that, how much could it be returned to shareholders and how much it could be held for further investments? Do you want to try that one, Pascal? Yeah, sure.

I mean, we started this dividend program a few years ago, which has been a We started this share buyback problem as well. Of course, we will have some capital commitments in South Africa energy going forward, even if we sell in fact. But clearly, in the top of our priorities is to maximize the returns to our shareholders. So we certainly think seriously about an exceptional buyback or dividend.

Okay. Thank you so much for that, Pascal. Another question is about the reorganisation of the asset ownership. Roger, we do have, some people would argue, a convoluted structure. Do you have any views on how you would like to set, what are your aspirations around simplifying that?

I think the thing that I said at the start, Africa Oil has fantastic assets. They are fantastic However, they're not optimally owned. It's not, for me, it's not optimal to be a shareholder in a company that is then working with the operator at the JOA level. And so we are looking at a whole series of ways to actually get us onto the JOA level in our two principal assets, which are Nigeria Of course, in Equatorial Guinea and in 3B, 4B, we are in that position. But there are routes to achieving that in these two assets, and we are reviewing them. But you're absolutely right. I see that it is convoluted. It makes it very difficult sometimes for investors to accurately understand the true value, and it is at the top of my priority list.

Pascal, if I may, there is a couple of questions on the standby or unutilized standby corporate facility. People are asking, obviously, there is a cost associated with this. Is this something that could be drawn down? So, obviously, that's a strategic decision. But can you sort of, I suppose the question is, can you justify that cost of having this facility in place?

Yes, I think today for companies like us, it's a privilege to have a syndicate of banks supporting them. So, I mean, we kept this group of four or five banks now for two or three years. And I think it's a good financial discipline to keep the contact with these banks, make sure that you comply with a set of covenants, not only about the agency, but also financial covenants. And it's key to keep these banks happy and able to support you going forward in case specific M&A transaction was to come, or specific investment opportunity was to come in our existing portfolio. So I think, yes, it's worth the cost, and we are only paying 40% of the margin as a commitment fee, so it can be seen as significant, but I don't think it's so significant when you consider that we have still $175 million of available tech capacity as of today.

Very good. There's a question from Christian. What economic standards or benchmarks does a company set in its evaluation of acquisition opportunities? This is a very open-ended question. We could spend hours discussing this. But do you have any views on when you're looking at opportunities?

I think the main criteria would be strategy. And I think we are strategy-focused instead of strategy. complying with a set of predefined economic terms. Of course, we would run all price sensitivities and the weighted average cost of capital sensitivities as well. But we don't have a predefined set of particular payback times or work hurdles that would actually be met in order to make an M&A or an acquisition possible. I think we are very open on that terms.

Thank you. Question on our capital expenditure guidance for 2023. To remind participants, that's in the range 80 to 100 million US dollars. Could you guide to what the level could be for next year? And also what it could be for fourth quarter, because we've only spent 35 million of that guidance. Any use on the fourth quarter and also looking at- No, I think that's correct.

We are a bit behind the capital expenditures mainly because of the drilling campaign in Nigeria was starting late. And so we are running a bit late on this drilling campaign and clearly what has not been done in 2023 will move to 2024. But so to answer specifically that question, we are going to be probably below guidance in terms of capital expenditures in 2023. And I would say that the 2024 guidance will be in line with what we put in for 2023.

Thank you. I think it was a bit unfair to ask you for 2024 guidance, because that is a process underway. So we just have to wait and present this guidance in June, of course. And it could be, perhaps, early next year. But thank you for additional call-up there, of course. So a couple of questions on when, you know, the timeline for us to have a better handle on impacts budget for next year. Is that something that is currently underway, being analyzed? And do you expect to have that information released early next year?

So we rely only on the operator, of course, as you can imagine, to provide such an estimate. And usually operators don't provide draft budget before early December by the partners. So I think we will have to wait a little bit before we know more about it. What I can just mention is that in terms of Venus, Total is keen to continue to invest in this block. We know that they are drilling with two rigs at the moment. They have two rigs mobilized on the block. We don't expect to change this drilling scheme for next year. So they will probably keep two rigs a time running for most of next year, which means that we expect the capital expenditure budget to be in the same order of magnitude as it was in 2023.

Thank you. There was a question regarding, this is from one of our private investors in Sweden, about valuation for Nigerian that we presented last year, and basically saying with higher oil prices, what could be the direction for the valuation of our Nigerian assets. If I may, I will tackle that. Obviously, what we present is all to do with our NI51-101 disclosure, and that is a process underway, and there will be a report with our Nigerian valuation in late February, early March, and we will give that with our year-end results. Obviously, it would be inappropriate to sort of speculate what that could be. But just looking at this generally speaking and looking at the Nigerian, Pascal, Roger, do you have any views on what could be the main value drivers for, broadly speaking, in Nigeria?

I think the main driver, as far as I see it, is our ability to maintain an increased production. I think we've seen the first benefit of this in-field campaign on Aegina this year, and we expect it to continue over next year, especially with the drilling on Akpok. So I think that will be the number one driver for valuation next year.

Wonderful. And I think it's also important to remind people that both OMR127 and OMR130 have actually reduced our effective tax rates. And bizarrely enough, Nigeria, which gets so much bad publicity, is one of the few jurisdictions where you have lower tax rates when you compare it to places such as the UK. So we are actually in a very good place. There's a question here from Goran. I really like it because it says, if you have gas from EG, would it be priced on European prices or local prices? Well, Goran, I like your optimism because obviously we need to drill in the exploration world first, but assuming you are successful. Roger, I mean, could you say a little bit about this EG31 opportunity? Actually, why don't we put it up?

Yeah, tell me if that makes sense so we can talk to actually a slide. So this is a very interesting opportunity that the team has identified. And it genuinely is an infrastructure-led exploration opportunity because it is a block, or this is 31, that completely surrounds an energy facility which has got a significant ullage within it. And so there are a whole series of what look like gas prospects which would be very short tiebacks to an existing piece of infrastructure. However, in terms of gas pricing, we're not going to be getting European gas prices for it. It will be equivalent to whatever is being received by the operator of the LNG facility at the present time. In terms of the level of interest in this block, it has been, and frankly, it's been staggering. We have a data room open in which we still have nine companies reviewing this opportunity, and they're not all small independents such as ourselves. So this is a real opportunity that is brilliant by the team to come up with this. But in terms of gas prices, prices going into the field at the present time. So we're not going to be an off-taker of LNG in this. We're just feed for the energy facility.

Roger, you mentioned a data room for EG31. There are a number of questions, both on EG31 farmhouse and 3B4B, just wondering what could be a possible timeline for for the whole month process.

Well, actually, the exact timeline on EG3031, we were going to ask for bids towards the end of December, mid-December. But because there has been such a level of interest in it, we're not going to get everyone through. We've just extended the bid deadline to, I believe, it was the 1st of February for that. So we have to extend that because there's too many people in there. In terms of 3B, 4B, We have had significant discussions with one major already in that block and we have just brought into that data room actually three other majors have asked to come in. And so that one is gonna take a little bit longer because I think it's worth standing on the sidelines and not leaping necessarily at the first opportunity because there has been this sudden uptick in the level of interest in that block. And so I would say that that one, I want to give it the time to get everything in, I think it's probably towards the end of the first quarter, probably, depending on the level of interest.

Question from Pisa, Pisa Dams. Will you stay focused on Africa offshore, or could you consider other jurisdictions outside Africa? I think you've already answered that question. I think it's important to find out that question as well, to reiterate the question on the existing portfolio.

In the next 18 months, this company has so much work to do on maximizing the value of this existing portfolio. You're not going to see us jump into another country, do a big M&A deal, transaction until we've got this portfolio to its maximum point of value realization, if you like. At that point, we will have a discussion with the board of where we take the company to next. And there have been discussions about could we take it into different domains, and that is not off the table. But for the next 18 months, expect us to see focus solely on what we've got at the moment.

One of our covering analysts, Tom Erick, has a question, a difficult one to answer. Are you considering opportunities or scenarios where you could acquire impact? You don't have to answer it.

In respect to impact, I will be very honest. We're getting to the point where something is going to happen in terms of impact. As Pascal said, we're going to be getting the total budget through. There will be another funding requirement. It's an unusual situation that impact holding. I've made it clear to you that we would like to stay. I've also told you that there is a big process on, and so if we find that there's an absolutely outstanding offer comes in, then we would exit. But I would think that there are going to be changes, if you like, within the impact demand. I can't say exactly what they're going to be, but we're looking at a whole series of options that range from selling the assets to increasing our interest to staying as we are. And I'm sorry, that's all that I can do, unless you can think of anything other. So it's a fantastic asset. We love it. We're not in love with it, but we'd give it forever. but we need to consider the best option for the shareholders.

So maximize optionality around business. Pascal, let's come to you. A question on the Africa Energy Law that we've given. What is the rationale for it? Any views on that?

Well, the rationale was just to provide a short-term liquidity to Africa Energy, as you know. We know that the a long time to develop. I mean, we are not there yet in terms of gas monetization, so I think this was just an option to give more time for Africa Energy to sort the monetization of the gas.

So we basically gave them an extra 12 months to make the project happen. Thank you very much for that. is asking the question, can you outline scenarios or share your thoughts on whether the company could be four to five years with respect to Nigeria and Venus? That's a very, you could say a lot. That's quite a long time horizon.

Four to five years. Well, I think that what we've done with the board in terms of improving the business plan here and setting, if you like, a strategic direction. We're trying to create optionality. The first step is to maximize the value of the quality stuff that we already hold. You will see us possibly cleaning up some of the other assets, the peripheral assets. Then, once we get the portfolio cleaned up as best we can, we will then look at other strategic options. And one of those could be that we will significantly from this portfolio and we will look at a series of options but the board has not given us approval to do that we just want this first step done the other if you like the crossroads in the road that we can then make the decision judging what the market is doing and what is the best way to create shareholder value going forward and one of them could be that we significantly grow it and maybe buy it via M&A but that has not been agreed at the present In terms of size, I think this industry does have a materiality interest at which you get significant increases in valuation metrics. And we've got a long way to get there. But personally, I'd like to see us get there. I'll leave it at that. Now, whether it's easier along the way to monetize the company as it is, we'll decide in 18 months' time.

On a lighter note, there's a question by . Swedish investors, Swedish friends. Roger, when are you coming to Stockholm for a town hall?

Sir, I was warning you that I was going to get this type of question. I will say that Pascal and I have done 50 investor presentations over the last six weeks. We attended the Pareto conference and we have been unbelievably busy on this portfolio in terms of its strategic direction. But I commit that I will come to Stockholm to do a town hall by the end of the first quarter. But you just have to give me a little bit of a stay of execution here because we are in a very active situation here in both Nigeria and in impact at the present time, which needs the focus of all the team.

Very good. So we have one of our friends from Bloomberg Intelligence. First of all, congratulations on a solid quarter. Thank you for that encouraging and supportive statement. Any color on the time train for mangesi drilling and the initial results for it and also for this Venus 1A?

Well, as I sort of mortally told you, if you go back to this Zoom Earth website, focus in on the Namibia offshore, click on the panel, which I think is on the bottom left, select heat map, you will see that the Venus Well has been tested and it's kind of built up and we would expect to see results within impact in the next couple of weeks on that. In terms of when those are announced, we're obviously in a difficult situation or an unfortunate situation with Total in that they may not release the results until their February capital markets day, but there has been a test. In terms of Mangetti, And Getty will be in the deeper, both objectives, both objectives by the near to end of December. And so that is imminent as well.

But again, what I tell our investors is really the operator has its capital, well, not capital markets, but they've got the shorter results in early February. And I think, as always, it's important to direct So I encourage everyone to have that as your backstop date for use on both Mangetti and Venus 1A. There is another question, more of a statement, maybe a critical statement, in saying that, well, look, if the asset market is very competitive, just buy back your own shares more aggressively. That is how you're going to create a lot of shareholder value. I think we've answered that. You know, we are committed.

We heard the message and it's clearly one of the options we are considering at the moment. Yeah.

And, of course, the priority of really trying to think where we stand in terms of investments in our core portfolio as well. They have to be balanced very, very carefully. Very good. There's a lot of repeat questions here. So... Let's see, operator, are there any calls on the line? I don't see any. Could you just, do you just want to offer the opportunity to see if anyone wants to ask a question?

As a reminder, if you wish to ask a question, please press star one and one on your telephone. That's star one and one if you wish to ask a question.

Okay, well, look, it doesn't seem that anyone's raised their hand, does it, Sandra? There are plenty of other questions, and I'm mindful we're running out of time, so let's get back to the webcast. Perhaps one for you, Pascal. In growing the company, debt financing and operational cash flow, are they the preferred source of financing? And what are your thoughts on raising new equity? Is that an option?

I think it's a good question. If we were assuming that we are fully valued, then I think it would be something that we would consider. At the moment, we don't think that the share price is fully valued, so we would probably not go for an equity rate at the moment. And in terms of further deals or acquisitions, if we can favor cheap sources of capital like the prime RBL, for instance, or cheap syndicated loans at the Africa oil level, then I think we would favor this option, just from a pure financial engineering perspective.

Very good. Question on Kenya. Is it 100% behind us, or could there be lingering liabilities or future expenses in exiting that project?

We are coming to the end of the beginning for sure. We have signed all the withdrawal documents and we are awaiting for the contest signature of the government to Kenya. So that would be an important milestone. But officially now we are out of Kenya since mid-June basically. So this is done. Of course now we have to wind up the legal entities and in order to be able to do so we need clearance from and the Department of Customs. So yes, I mean, the answer, we can't say, yes, we are completely out of Kenya as of today, but most of the diabetes, I believe, is out there.

There is one question which I'll answer. keep an eye out for that if you want to go through it again. So let's see what else we have. I think we've really gone through most of the questions, but just to make sure that I haven't missed anything. There is an important one here on the fiscal regime in Nigeria, and it's the reduction in the tax rate, which we Pascal, I think it's important to give a refresher on what we did earlier this year as well.

So it's valid for both. And when we obtained license extension on OML 130, it was of course subject to us converting the PIA on OML 130. So yeah, today we can say that both OMLs are covered by the same fiscal terms and they are consistent with the PIA.

Very good, very good. There is a question on that oil price hedging. Do you think your strategy of hedging oil prices when they fall is the optimal? I think that's not quite right because we don't actually hedge when the price is fall. A reminder on our oil marketing strategy I think is useful here.

Yeah, so what we do is basically each time we want to sell a cargo we basically set to specials which is the average forward curve at the moment when we plan to offtake the cargo, to which we take a 20% discount, and we set basically the threshold for that cargo. And then, if any time between the moment we give the instruction and the moment the cargo, one month before the cargo is actually offtaken, the oil price falls below that threshold, then the offtaker can sell the oil. can't go forward. So it's not exactly an aging policy, it's not 100% perfect, it's not 100% equivalent to a good option even if it looks really like a good option. But I think in an upward market it's very useful because it avoids to get locked into forward sales which are basically potentially run into significant losses the oil price continues to go up, which is basically what happened in 2021, 2022, when the oil price started to go up again. We had basically 60 to 70% of our cargo sold forward. We were a bit stuck and we unfortunately had a few edge losses. But as you see from mid-2020 to the mechanism we have in place, it's very efficient to track the average dated brand. So we are basically selling spot now with a form of downward protection if the oil price was to go down significantly. So I think that's a good prediction. Now to answer these questions fully, if we were to increase leverage at prime level, and if we wanted to maximize the leverage at prime level, we would probably have to turn to a more robust edging instrument than the one we have. So it could be buying stock options, buying put options. It could be starting to forward sales again, or maybe have more sophisticated instruments like Colbers. But I think we would look into that if we decide to do a large acquisition at prime level and we decide to increase average. Very good.

a question from one of our long-standing shareholders and nick um anything you can say on the actual west size of 2p likely production from the three wells and gentlemen if it's okay i'm going to answer this we haven't actually provided that level of detail as of now and i think it's very important for us to coordinate our public statements with prime and the operator so nick is there with us i will work back on that as a priority and we'll get back on the level of detail. As of now, we can't go into that level of detail. We don't want to upset relationships and step on anyone's toes, specifically the operator. Look, I'm mindful that we've only got a minute or two left, so I propose that we finish here. I'll hand over back to the operator for the finishing remarks. Well, nothing there. Roger, do you want to say anything?

No, thank you very much all for attending. And we look forward to seeing you on another webcast soon.

Yes. And just to remind everyone that the recording of the webcast is available, even given another 24 hours, and it will be on. And as always, please reach out to me if there are questions. Thank you so much for your time. Very grateful for your support. On that note, goodbye.

This concludes today's conference call. Thank you for participating. You may now disconnect.