Africa Oil Corp has announced its financial and operating results for the three months and year ended December 31, 2015.
Subsequent to December 31, 2015, the company completed its previously announced (November 9, 2015) farmout transaction with Maersk Olie og Gas A/S, a Danish oil and gas company owned by the Maersk Group (Maersk) whereby Maersk acquired 50% of Africa Oil's interests in Blocks 10BB, 13T and 10BA in Kenya and the Rift Basin and South Omo Blocks in Ethiopia in consideration for reimbursement of a portion of Africa Oil's past costs and a future carry on certain exploration and development costs.
To date, US$439.5 million of farmout related proceeds have been received from Maersk: US$350 as reimbursement of past costs incurred by the company prior to the agreed March 31, 2015 effective date and US$89.5 million representing Maersk's share of costs incurred between the effective date and December 31, 2015, including a carry reimbursement of US$15MM related to exploration expenditures.
An additional US$75 million development carry may be available to Africa Oil upon confirmation of existing resources. An updated assessment of contingent resources is currently ongoing. Upon Final Investment Decision (FID), Maersk will be obligated to carry Africa Oil for an additional amount of up to US$405 million depending on meeting certain thresholds of resource growth and timing of first oil.
At December 31, 2015, the company had cash of US$104.2 million and working capital of US$49.5 million. During 2015, the company completed several private placements for gross proceeds of US$275 million. During the fourth quarter of 2015, as a result of exploration results to date and current oil industry environment, the company wrote off US$70.7 million of capitalised intangible exploration assets relating to Ethiopia. The remaining carrying value of the intangible exploration assets in Ethiopia is US$18.4 million.Adapted from a press release by Louise Mulhall
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