Mr. Keith Hill reports

AFRICA OIL ANNOUNCES THE RENEWAL OF OML 130 LICENSE

TotalEnergies has renewed oil mining licence (OML) 130 for a period of 20 years. Africa Oil Corp. has an effective 8-per-cent interest in OML 130 through its 50-per-cent shareholding in Prime Oil & Gas Cooperatief UA. The renewal of OML 130 means that Akpo, Egina and Preowei fields will operate under the terms of the new Petroleum Industry Act (PIA), being the first assets to effectively benefit from the PIA fiscal terms.

This licence renewal, a condition precedent to the closing of Prime's debt refinancing, will allow Prime to enhance its debt capacity, reset its tenor to six years and materially increase its near-term liquidity capacity. Closing of the refinancing, expected in the next few days, will provide Prime with the scope to distribute dividends to its shareholders, including Africa Oil, during this year.

The renewal of OML 130 will also allow the company to increase the available amount of its standby corporate credit facility to $200.0-million from $100.0-million currently, significantly increasing its liquidity. This facility, which is currently unutilized, is available to be drawn until Oct. 20, 2023.

Africa Oil president and chief executive officer Keith Hill commented: "The renewal of OML 130 is very good news for the company and its shareholders. This licence is the core of our Nigerian investment and accounts for most of Prime's production and cash flows. It also includes attractive growth opportunities such as the undeveloped Preowei oil discovery, which we can now take forward towards a final investment decision. Additional opportunities include stepout exploration and appraisal drilling, that should support production rates over the coming years.

"Africa Oil has a debt-free balance sheet with significant liquidity headroom and a balanced portfolio of production and development assets in Nigeria, plus the industry's most exciting appraisal and exploration campaign in Namibia's offshore Orange basin. Drilling at the Venus-1A well is progressing well and we look forward to updates from the operator in the coming weeks."

Background information

Africa Oil completed the acquisition of a 50-per-cent shareholding in Prime in January, 2020, for a cash consideration of $519.5-million. To date, the company has received a total of $650.0-million in dividend payments from Prime and achieved payback of its Prime investment in under three years.

The main assets of Prime are an indirect 8-per-cent working interest (WI) in OML 127 (4 per cent net to AOC) and an indirect 16-per-cent WI in OML 130 (8 per cent net to AOC). OML 127 is operated by affiliates of Chevron and covers part of the producing Agbami field. OML 130 is operated by affiliates of TotalEnergies and contains the producing Akpo and Egina fields. The three fields in these two OMLs are located over 100 kilometres offshore Nigeria. All three fields have high-quality reservoirs and produce light to medium sweet crude oil through FPSO facilities. Akpo and Egina also export associated gas which feeds into the Nigerian liquefied natural gas plant. The OML 130 licence area also covers the Preowei undeveloped oil discovery. This asset is expected to be developed through a satellite subsea tieback to the existing Egina FPSO facility.

At end of first quarter 2023 Prime had an outstanding reserves-based lending (RBL) facility and a pre-export finance facility with an aggregate outstanding debt amount of $720.3-million ($360.2-million net to AOC). Prime will now complete the refinancing of both these facilities through the closing of a new RBL facility. This new facility is for a principal amount of $1.0-billion ($500-million net to AOC) with a six-year tenor. Prime also reported a cash position of $396.9-million ($198.5-million net to AOC) at end of first quarter 2023.

At end of first quarter 2023, Africa Oil had a debt-free balance sheet and a cash position of $158.2-million. The company's standby credit facility is available until Oct. 20, 2023, with an available amount of $200.0-million. This facility has a maturity of Oct. 20, 2025.

About Africa Oil Corp.

Africa Oil is a Canadian oil and gas company with producing and development assets in deepwater Nigeria and an exploration/appraisal portfolio in west and south of Africa, as well as Guyana. The company is listed on the Toronto Stock Exchange and on Nasdaq Stockholm under the symbol AOI.

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