Annual Results

ASSET SUMMARY

Status of deals

It has been a transformational year for Afentra with the completion of its first two acquisitions from INA (May 2023) and Sonangol (December 2023) resulting in the Company, at year end, holding material non-operating interests in Block 3/05 (18%), in Block 3/05A (5.33%) and in Block 23 (40%) located offshore Angola. 

A key part of the Sonangol acquisition was the successful negotiation with the Angolan Government to approve the extension of the Block 3/05 licence to 2040 and improved fiscal terms to the production sharing agreement ('PSA'). These now provide the stability and commercial environment for the future investment we plan to maximise the recovery and value of these world class assets. 

Post period, the Company received approval from the Angolan Government and completed the acquisition of a further 12% non-operated interest in Block 3/05 and 16% non-operated interest in Block 3/05A from Azule Energy Angola Production B.V. ('Azule'). The completion of this third acquisition increases Afentra's interests in Block 3/05 to 30% and Block 3/05A to 21.33%.

Current equity interests are illustrated below:

Material interests in high quality assets

Offshore Blocks 3/05 and 3/05A, located in the southern Congo Basin are high quality, shallow water, production assets with stable and robust cash flows with significant growth potential from production optimisation and near-field development prospects. 

The Blocks are operated under PSAs by two joint ventures (JVs) with a common Operator, the national oil & gas company Sonangol. Since 2022 the Afentra team has developed a close working relationship with Sonangol and the JV partnerships, actively contributing to all workshops, technical meetings and operational meetings as well as conducting offshore site visits to the extensive infrastructure located on Block 3/05. Our aim is to work collaboratively and proactively with the JV and other industry stakeholders in Angola, leveraging our deep industry expertise to optimise production operations, re-develop the asset, explore new development opportunities and reduce emissions from the fields. 

Production optimisation and increased reserves in 1H 2023

We were pleased to report that in 2023 gross combined production in Blocks 3/05 and 3/05A increased by around 8% to an average of 20,180 bopd with an exit rate in December 2023 exceeding 23,000 bopd.  This uplift in production was achieved through a combination of an increased operational uptime of 87% in 2023, the successful delivery of 30 light well interventions ('LWIs') and increased water injection volumes. The result of these efforts was reflected in gross 2P reserves for Block 3/05 increasing to 110 mmbbls⁵ and a reserve replacement ratio in excess of 150% in the first half of 2023. These reserves are from existing producing fields so do not rely upon the construction of new infrastructure which limits incremental emissions.

Continued momentum to maximise the value of the assets in 2024

Based on the success of the 2023 LWI program coupled with activities to deliver steady and increasing water injection rates, further investment will be made in 2024 toward production optimisation. This investment will be focused on an additional LWI program of up to 45 wells and further upgrades to the water injection systems.  Additional production enhancement is also possible by utilising artificial lift solutions such as electrical submersible pumps ('ESPs') and Afentra is taking the lead on technical studies and making proposals to the joint venture regarding its application in selected wells. Going forward infill drilling, development of appraised discoveries and near field exploration provide the opportunity to significantly increase production in the medium term. 

Long-term field life extension and focus on reduced emissions

The extension of the Block 3/05 licence through to 2040 alongside improved fiscal terms has supported the JV's decision to make further investments in the infrastructure in order to extend the field life of the assets. The bi-annual shutdown, which will take place in the second half of 2024, will provide an opportunity to undertake maintenance and upgrades on the field power systems. This is an important initial step to upgrade the existing infrastructure to deliver safe, secure and reliable production for a further 20 years, resulting in long-term value for all stakeholders.

Afentra is pleased to report that early progress has been made during 2023 on emissions management with the installation of new reliable power generation capabilities enabling the substitution of diesel with gas which has resulted in reduced emissions.  A drone survey was undertaken in November 2023 covering all of the Block 3/05 offshore infrastructure with the objective to identify fugitive emissions and to assist in quantifying flaring to better define the emissions profile of the asset. In addition, emissions metering systems will be installed during the bi-annual shutdown to establish an accurate baseline to inform emission reduction initiatives going forward. This forms part of a holistic gas management program to identify, measure and reduce greenhouse gas ('GHG') emissions. 

Material near field development opportunities in Block 3/05A

In Block 3/05A the extended production test on Gaz-101 that began in March 2023 is set to continue, enabling further definition of the development concept for the Caco-Gazela discovery. The deployment of a downhole gauge is being used to monitor the pressures which can then be used to interpret connected oil volumes and assist in selecting the appropriate development concept for the Caco-Gazela fault blocks.

In addition, post period following a request by the Block 3/05A partnership, the Government of Angola have declared the Punja Development Area located in Block 3/05A as a marginal discovery.  As a result, the applicable fiscal incentives will be applied to this discovery, significantly enhancing the commercial value of this potential development. 

The existing Block 3/05 infrastructure provides the opportunity for production growth potential through lower emission near field tie-back developments. The JV partnership continues to review a number of these opportunities working toward value generating appraisal and development proposals. 

Onshore Blocks with low-cost development potential

Afentra submitted bids, as a non-operating partner, for onshore Blocks KON15 (1,000 km²) and KON19 (900 km²) as part of the 2nd Kwanza Licensing Round launched in 2023 by ANPG. In early 2024 Afentra was chosen by ANPG as a preferred bidder for 45% interest in both Blocks and is now engaging with the respective Operators of KON15, national oil company subsidiary, Sonangol P&P; and KON19, Angolan independent, ACREP, to discuss the engagement with the relevant authorities to negotiate the licence terms.

These two Blocks which are located adjacent to legacy fields that are currently being re-developed, offering an excellent opportunity to secure acreage over prospects that have follow on potential within the prospective post-salt and pre-salt formation plays in this area. Using legacy datasets these prospects and leads can be readily explored and appraised, which should lead to short cycle development opportunities to bring on production within short timeframes.   

These licences will expand Afentra's footprint in this attractive Angolan market by diversifying our portfolio which is principally focused on low cost, long-life stable production and low-risk development assets.  

Block 23  

Block 23 is a 5,000 km² exploration and appraisal Block located in the Kwanza basin in water depths from 600 to 1,600 meters and has a proven working petroleum system. Whilst the large Block is covered by modern 3D and 2D seismic data sets, with no outstanding work commitments remaining, much of the Block remains under-explored.  

The Block contains the Azul oil discovery, the first deepwater pre-salt discovery in the Kwanza basin. This discovery made in carbonate reservoirs has oil in place of approx. 150 mmbbls and tested at flow rates of approx. 3,000 - 4,000 bopd of light oil. The work program consists of re-processing 3D Seismic to re-evaluate the prospectivity.    

Somaliland, Odewayne Block 

The onshore Odewayne Block in Somaliland is an unexplored frontier acreage position covering 22,840km² offering the opportunity to explore an undrilled onshore rift basin in Africa.

During 2023 the Operator and Afentra collaborated to update their understanding of the petroleum systems and undertook satellite seep studies. Analysis of seeps and a water well have confirmed the presence of trace hydrocarbons and that the upper Jurassic is the likely source rock and potentially mature in the sub-surface. The next phase of evaluation of this large licence is being considered to further understand the petroleum system and exploration potential.   

Value driven growth

In conclusion, Afentra has made substantial progress, securing material non-operated interests in two high-quality assets, and demonstrating its commitment to working collaboratively within its JV partnerships and with other industry stakeholders. On Blocks 3/05 and 3/05A the successful light well intervention project coupled with the increased reliability of water injection during 2023 has resulted in a realisation of the potential upside of the assets and over 150% reserve replacement in the 1H of 2023.  In 2024 the operational activities and planning for future work programs will build on this early success and lay the foundations for continued production growth for many years ahead.   

FINANCIAL REVIEW

Deal completions and revenue generation highlight a successful year

2023 was a year of financial transformation for Afentra. We completed our two inaugural transactions in Angola and also successfully executed our first crude oil lifting generating $26.4 million of revenue in Q3. These were major milestones for the Company which help to solidify our position in Angola and demonstrate the successful progress of our strategy to deliver sustainable shareholder returns. In addition, post period, having received approval from the Angolan Government, the Company completed the Azule acquisition transaction (our third in Angola) in May 2024.

With regards to Company debt financing, we effectively utilised and managed our debt facilities, meeting all required covenants and completing on the INA and Sonangol transactions with an aggregate debt to equity split of 63% / 37% resulting in a year end debt position of $31.7 million and a net debt position of $12.3 million.

We also entered into our first hedge arrangement in December 2023 purchasing a $70/bbl floor for the 70% (315 kbbls) of the February 2024 crude oil lifting at a cost of $1.50 per bbl to secure downside protection at the time of relatively high volatility observed in the markets.

For 2024, our focus on M&A remains unchanged as we continue to seek to build our portfolio via value accretive opportunities, in Angola, as well as in other jurisdictions in the West Africa region.

From an asset perspective, our second crude oil lifting (450,000 bbls) on Block 3/05 in February 2024 generated $38.2 million of revenue. We will continue to strive to be a proactive and collaborative non-operating partner in the Angolan Blocks 3/05 and 3/05A, bringing forward our technical and commercial expertise to safely and efficiently deliver cash returns and investment opportunities, as well as ensuring that value is protected, all executed within a sound internal control framework.

Financing Highlights:

RBL, $34.8 million Financing drawn to fund INA and Sonangol asset acquisitions. Key Terms:

•       5-year tenor effective from May 2023

•       8% margin over 3-month SOFR ('Secured Overnight Financing Rate')

•       Semi-annual linear amortisations

•       The key financial covenant for the RBL is the ratio of Net Debt to EBITDA (less than 3:1)

 Working Capital Facility, up to $30 million revolving facility. Key Terms:

•       5-year tenor effective from May 2023

•       4.75% margin over 1-month SOFR

•       Repayable with proceeds from liftings

Non-IFRS measures

The Group uses certain measures of performance that are not specifically defined under IFRS or other generally accepted accounting principles. These non-IFRS measures can include capital investment, debt and adjusted EBITDAX.

Income Statement

2023 production from Afentra's interests in Blocks 3/05 and 3/05A, post the completion of INA and Sonangol transactions, averaged 3,509 bopd (2022: nil).

2023 revenue of $26.4 million (2022: nil) consisted of 1 lifting from Block 3/05 of 300kbbls at a realised price of $88.0/bbl.

Cost of sales during the year totalled $12.6 million (2022: nil).

The profit from operations for 2023 was $2.4 million (2022: loss $9.0 million) as a result of the inaugural lifting in August 2023. During the year, net administrative expenditure increased to $11.5 million (2022: $9.0 million) predominantly as a result of exceptional (one off) costs associated with the RTO process ($1.6 million in the period) and an increase in staff costs and share based payment charges ($1.8 million).

In 2023, a portion of the Group's staff costs and associated overheads have been expensed as pre-licence expenditure ($4.8 million), or capitalised/recharged ($34k) where they are directly assigned to capital projects. This totalled $4.8 million in the year (2022: $3.1 million) reflecting continuing M&A project activity.

Finance income was received (interest on deposits) in the year of $240k (2022: $86k). Finance costs increased during 2023 to $3.5 million (2022: $197k), primarily due to the operation of RBL and WC facilities.

The loss for the year was $2.7 million (2022: loss $9.1 million):

Group adjusted EBITDAX totalled $11.1 million (2022: $5.2 million loss):

The basic and diluted loss per share was 1.2 cents per share (2022: loss 4.1 cents per share). No dividend is proposed to be paid for the year ended 31 December 2023 (2022: $ nil).

Statement of financial position

At the end of 2023, Non-current assets totalled $174.0 million (2022: $21.9 million), the increase entirely related to the acquisition of the Company's interests in Block 3/05, Block 3/05A and Block 23.

At the end of 2023, Current assets stood at $36.7 million (2022: $31.0 million) including; inventories of $13.4 million (2022: $ nil), cash and cash equivalents of $14.7 million (2022: $20.4 million), restricted funds of $4.9 million (2022: $10.2 million) and trade and other receivables of $3.6 million (2022: $419k).

At the end of 2023, Current liabilities were $38.8 million (2022: $2.9 million) including borrowings of $6.8 million (2022: $ nil), contingent consideration of $4.6 million (2022: $ nil) and trade and other payables of $27.3 million (2022: $2.7 million). The increase in trade and other payables is related to the Company's share of Joint Venture working capital items (Block 3/05 and Block 3/05A).

At the end of 2023, Non-current liabilities were $123.8 million (2022: $160k) including borrowings of $25.0 million (2022: $ nil) and contingent consideration/provisions of $98.9 million (2022: $33k).

Group net assets at the end of 2023 totalled $48.0 million (2022 $49.8 million). Movements in the component parts of Group net assets are predominantly as a result from the acquisitions made in 2023 and the associated movements in assets, liabilities and debt. Increases versus 2022 balances in both non-current assets ($152.3 million) and current assets ($29.5 million) are offset by corresponding increases in non-current liabilities ($123.2 million) and current liabilities ($53.3 million) resulting in an overall $1.8m decrease in Group net assets in 2023 vs 2022.

Cash flow

Net cash inflow from operating activities totalled $12.3 million (2022: outflow $6.7 million), the increase predominantly due to the acquisitions of Block 3/05 and Block 3/05A and the revenue from the Company's first lifting.

Net cash used in investing activities totalled $45.9 million (2022: $10.3 million) the increase predominantly due to the acquisitions of Block 3/05 and Block 3/05A.

Net cash generated in financing activities totalled $28.0 million (2022: used $225k) primarily as a result of the net drawdowns on debt facilities.

During the year there were minimal cash investments on the Odewayne Block in Somaliland due to the Group's interest being fully carried by Genel Energy Somaliland Limited for its share of the costs during the Third and Fourth Periods of the PSA.

Accounting Standards

The Group has reported its 2023 and 2022 full year accounts in accordance with UK adopted international accounting standards.

Cautionary statement

This financial report contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil and gas exploration and production business. Whilst the Directors believe the expectation reflected herein to be reasonable in light of the information available up to the time of their approval of this report, the actual outcome may be materially different owing to factors either beyond the Group's control or otherwise within the Group's control but, for example, owing to a change of plan or strategy. Accordingly, no reliance may be placed on the forward-looking statements.

Anastasia Deulina - Chief Financial Officer

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED STATEMENT OF CASHFLOWS

FOR THE YEAR ENDED 31 DECEMBER

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1.     General information

The results announcement is for the year ended 31 December 2023.

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2023 or 2022, but is derived from those accounts. Statutory accounts for 2022 have been delivered to the Registrar of Companies and those for 2023 will be delivered following the Company's Annual General Meeting.

The auditors have reported on those accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under s498(2) or (3) Companies Act 2006.

While the financial information included in this announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs.

The Annual Report and Accounts and the notice for the Company's Annual General meeting, which is to be held at 10.00 a.m. on 27 June 2024, will be posted to Shareholders on 4 June 2024.

2.     Going concern

The Group business activities, together with the factors likely to affect its future development, performance and position are set out in the Asset summary. The financial position of the Group and Company, its cash flows and liquidity position are described in the Financial Review.

The Group has sufficient cash resources for its working capital needs and its committed capital expenditure programme at least for the next 12 months from the signing of the annual report. Consequently, the Directors believe that both the Group and Company are well placed to manage their business risks successfully.

The Group has sufficient cash resources based on existing cash on balance sheet, proceeds from future oil sales and utilisation of the revolving working capital facility   to meet its liabilities as they fall due for a period of at least 12 months from the date of signing these financial statements, based on forecasts covering the period through to 31 December 2025, notwithstanding the impact of the situation in Ukraine and the Middle East and the resultant impact to commodity prices and foreign exchange rates.  

The Board has looked at a combination of downside scenarios, including a production shortfall alongside lower than anticipated oil prices. The impact of the downside  scenarios can be mitigated by the implementation of hedges of 70% of the remaining 2024 cargos. Further scenarios associated with additional acquisitions of Kon 15 and Kon 19 have also been reviewed and the Board believe that liquidity is sufficient to pursue these opportunities and cover all financial covenants, the tests of which, for current borrowings, have been passed for the Historic Ratio (Net debt/Ebitda) and the Gross liquidity test, and are not forecast to be breached within the going concern period. The Board also notes the implementation of the hedging policy and is confident in the utilisation of commodity-based derivatives to manage oil price downside risk. Thus, the Board believes its appropriate to continue to adopt the going concern basis of accounting in preparation of the financial statements. 

The Directors have at the time of approving the financial statements, a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future.

3.     Property, plant and equipment

Block 3/05 PSA, Angola: Afentra Angola Ltd 18%, Sonangol (Operator) 36%, M&P 20%, Azule 12%, Etu Energias 10% and NIS-Naftagas 4%.

Block 3/05A PSA, Angola: Afentra Angola Ltd 5.33%, Sonangol (Operator) 33.33%, M&P 26.68%, Azule 16%, Etu Energias 13.33% and NIS-Naftagas 5.33%. 

The right of use asset (office lease) is depreciated on a straight-line basis over the lifetime of the lease contract. The current lease term is for 8 years, ending in 2024. See Note 7 for further information on the additions in the year.

4.     Other non-current assets

The Group have reviewed the accounting treatment for the decommissioning fund held by the Block 3/05 Operator and have recognised a non-current asset and an offsetting non-current liability for $77.0 million, which equates to the present value of the future decommissioning liability. It is management's view that the future liability for decommissioning is represented by the totality of the funds held by the Operator, specifically for such purposes. The non-current asset held for decommissioning liability is limited to the lower of the present value of the future decommissioning liability and the amount of the funds held by the Operator.

5.     Borrowings

The Group has activated elements of both the RBL Facility and Working Capital facility in order to facilitate the completion of the INA and Sonangol acquisitions. As at 31 December 2023, the Group has drawn down $34.8 million (RBL) and $ Nil million (Working Capital) with the following key terms:  

RBL Facility

·      5-year tenor

·      8% margin over 3-month SOFR (Secured Overnight Financing Rate)

·      Semi- annual linear amortisations  

·      Key financial covenant of Net Debt to EBITDA < 3:1  

Working Capital up to $30 million revolving facility  

·      5-year tenor  

·      4.75% margin over 1-month SOFR  

·      Repayable with proceeds from liftings

A charge is placed on Afentra (Angola) Ltd shares to Mauritius Commercial Bank Limited as required by the terms of the debt facilities.

6.     Contingent consideration and provisions

a.     Contingent consideration

Provisions include contingent consideration payable to SNL and INA on Blocks 3/05 and 3/05A:  

INA acquisition: 

·      Tranche 1: The contingent consideration for 3/05 relates to the 2023 and 2024 production levels and a realised brent price hurdle up to an annual cap of $2.0 million;  

·      Tranche 2: The contingent consideration for 3/05A relates to the successful future development of the Caco Gazela and Punja development areas, with production and oil price hurdles. The maximum payable for these development areas is $5.0 million.  

SNL acquisition: 

·      The contingent consideration for the SNL acquisition is payable annually over the next 10 years in each year where production exceeds 15,000bopd, and the realised oil price exceeds $65. The maximum annual amount payable is $3.5 million, resulting in a total maximum payment of $35 million over 10 years. 

Management have reviewed the contingent payments related to the SNL and INA acquisitions, which are dependent upon production levels, future oil price hurdles and future 3/05A developments. Judgement has been applied to the probability of the circumstances occurring that would give rise to some or all of the future payments. For each tranche of contingent consideration Management have applied a multiple scenario approach with 4 scenarios applied to each tranche along with the related weightings of probability resulting in an expected amount payable. 

In addition, Management has applied a discount rate that approximates to the incremental borrowing rate in arriving at a present value at the balance sheet date of the probable future liabilities. The discount rate is based at a market rate of 9.1%. Management is therefore comfortable with the liabilities recorded at the balance sheet date in respect of these contingent future events. 

In applying Management's judgement to the different scenarios and applying the discount rate noted above results in contingent consideration of $26.5 million. A 2% increase in the discount rate would result in a reduction in contingent consideration of $1.6 million and a 2% decrease in the discount rate would result in an increase in contingent consideration of $1.8 million. The impact of removing the scenarios that have an expectation the realised brent price hurdles will not be met (5% original weighting) and including a relative increase in the base case scenarios would increase the contingent consideration by $0.6 million.

b.     Decommissioning and other provisions

As part of the acquisition of Block 3/05 from SNL and INA the Group is responsible for the future cost of decommissioning the wells. As set out in Note 4 the decommissioning is prefunded and held by the Block 3/05 Operator and the Group has recognised a non-current asset to offset the decommissioning non-current liability of $77.0 million, which equates to the present value of the future decommissioning liability.

The cost of the decommissioning is equal to the agreed decommissioning plan. The Group's share of this cost is $99.7 million. In calculating the decommissioning liability at 31 December 2023 the cost has been inflated to provide the future cost of decommissioning at a rate of 2.5% and then discounted to the present value at a discount rate of 4.07%. This results in a decommissioning liability of $77.0 million.

The impact of changes to the inflation and discount rates, independently, would result in the following. An increase in the inflation rate to 3% would increase the decommissioning liability by $6.6 million. An increase in the discount rate to 4.25% would decrease the decommissioning liability by $2.2 million. A decrease in the inflation rate to 2% would decrease the decommissioning liability by $6.1 million. A decrease to the discount rate to 4.00% would increase the decommissioning liability by $0.9 million.

Movements in current and non-current provisions (contingent consideration) during 2023 are primarily due to the acquisitions of the INA and Sonangol interests in Angola (Block 3/05 (18%) and Block 3/05A (5.33%).

7.     Asset acquisitions

During the period the Group completed the acquisition of interests in Block 3/05 (18%) and Block 3/05A (5.33%) offshore Angola for a net $48.1 million payment with subsequent contingent payments of $26.5 million. See Note 6a for details of the contingent consideration.

The Group performed an assessment of the SNL and INA acquisitions to determine whether the acquisition should be accounted for as an asset acquisition or a business combination. For both transactions, the Group established that under IFRS11, joint control does not exist, and therefore the Group have deemed the acquisition to qualify as an acquisition of group of assets and liabilities, not of a business.  Furthermore, the Group gave regard to guidance included under IFRS 11- Joint Arrangements, and will account for its share of the income, expenses, assets, and liabilities from the acquisition date.

The consideration (contingent and actual consideration paid) was allocated to assets and liabilities based on their relative fair values.

8.     Subsequent events

Subsequent to the Balance Sheet date of December 31st, the following business deliverables occurred:

·      Afentra submitted bids, as a non-operating partner, for Blocks KON15 (1,000 km2) and KON19 (900 km2) located in the Kwanza onshore Basin and in January has been informed that it has been selected as the preferred bidder for 45% equity in both Blocks.

·      In February 2024, the Company sold its first 2024 cargo of 450,000 bbls of crude oil. The sales price inclusive of the Brent premium was $85/bbl, generating pre-tax sales of $38.2 million to Afentra.

·      In March 2024 conditional share option awards were granted to the Executive Directors of the Company under the terms of the Afentra plc Founders' Share Plan. 

·      In March 2024, Afentra with its partners agreed and initialed the PSA for the onshore Block KON19 with Agência Nacional de Petróleo, Gás e Biocombustíveis ('ANPG') and now await the formal approval of the Angolan Government.

·      In March 2024, Afentra announced that it had received approval from the Angolan Competition Authority for the acquisition from Azule of a 12% non-operating interest in Block 3/05 and a 16% non-operating interest in Block 3/05A, offshore Angola.

·      In April 2024, Afentra announced that it had received approval from the Government of Angola for the Azule Acquisition.

·      In April 2024, Afentra announced that the Government of Angola had declared the Punja Development Area in Block 3/05A a marginal discovery with improved fiscal terms now applicable for the remainder of its term.

·      In May 2024, Afentra announced the completion of the Azule acquisition resulting in Afentra holding non-operated interests of 30% in Block 3/05 and 21.33% in Block 3/05A, including the following completion settlement figures:

·      Net completion payment of $28.4 million, with Afentra inheriting crude oil stock of c.480,000 barrels.

·      Net completion payment to be funded by $4.9 million held in escrow, $17.0 million from the agreed RBL and $6.5 million from cash resources.

·      Further contingent payments payable to Azule include up to $14.0 million over two years for Block 3/05 (subject to oil price thresholds) and up to $15.0 million (for future developments, subject to oil price thresholds and production hurdles in Block 3/05A).

·      Following the Azule acquisition, the total RBL drawn is $47.3 million, the total working capital facility drawn is $13.7 million, and the cash balance is $14.8 million, resulting in a net debt of approximately $46.2 million.

·      After completing the Azule acquisition, the company holds a stock of c. 840,000 barrels, that can be valued at $63.0 million (based on $75 per barrel) on a pre-tax basis.

·      The company expects to sell its next cargo of crude oil (around 450,000 barrels) in June 2024.

·      Mauritius Commercial Bank continues as the lender to the company. Trafigura retains an interest in the RBL facility and will continue as offtake provider.

DEFINITIONS AND GLOSSARY OF TERMS

$                                                       US dollars

2D                                                    Two dimensional

2C                                                     Denotes best estimate of Contingent Resources

2P                                                     Denotes the best estimate of Reserves. The sum of Proved plus

                                                         Probable Reserves

AIM                                                   AIM, a SME Growth market of the London Stock Exchange

AGM                                                 Annual General Meeting

ALNG                                                The Angola LNG project

ANPG                                               Agência Nacional de Petróleo, Gás e Biocombustíveis (holder of the mining rights of Exploration, Development and Production of liquid and gaseous hydrocarbons in Angola)

Articles                                              The Articles of Association of the Company

Block 3/05                                         The contract area described in and covered by the Block 3/05 PSA

Block 3/05A                                       The contract area described in the Block 3/05A PSA

Block 23                                            The contract area described in and covered by the Block 23 PSA

Board                                                The Board of Directors of the Company

bbls                                                  Barrels of oil ('k-' / 'mm-' / 'bn-' for thousand / million / billion)

Bopd                                                    Barrels of oil per day ('k-' / 'mm-' for thousand / million)

Bwipd                                                   Barrels water injection per day

CCRA                                                Climate Change Risk Assessment

Companies Act or Companies Act      The Companies Act 2006, as amended 2006

Company                                          Afentra plc

CPR                                                  Competent Persons Report

Directors                                           The Directors of the Company

E&E                                                  Exploration and evaluation assets

E&P                                                     Exploration and production

EBITDAX (Adjusted)                          Earnings before interest, taxation, depreciation, depletion and amortisation, impairment, share-based payments, provisions, and pre-licence expenditure

EITI                                                   Extractive Industries Transparency Initiative

Entitlement Reserves                         Entitlement production/reserves refers to the share of oil/gas that a company is entitled to receive based on fiscal and contractual agreements governing the specific asset.

EOR                                                  Enhannced Oil Recovery

ERCe                                                ERC Equipoise Limited (author of the Competent Person's Report)

ESP                                                      Eletrical Submersible Pumps

Farm-in & farm-out                             A transaction under which one party (farm-out party) transfers part of its interest to a contract to another party (farm-in party) in exchange for a consideration which may comprise the obligation to pay for some of the farm-out party costs relating to the contract and a cash sum for past costs incurred by the farm-out party

FID                                                   Final investment decision

FSO                                                  Floating storage and offloading

G&A                                                  General and administrative

GBP                                                  Pounds sterling

G&G                                                 Geological and geophysical

Genel Energy                                     Genel Energy Somaliland Limited

GHG                                                 Greenhouse gases                       

GOR                                                     Gas Oil Ratio

Group                                               The Company and its subsidiary undertakings

H&S                                                  Health and Safety

HSSE                                                Health, Safety, Security and Environment

hydrocarbons                                    Organic compounds of carbon and hydrogen

IAS                                                   International Accounting Standards

IFRS                                                 International Financial Reporting Standards

INA                                                   INA-Indstrija Nafte d.d

IOC                                                   International oil company

IPCC                                                 Intergovernmental Panel on Climate Change

JV                                                     Joint venture

JOA                                                  Joint operating agreement

k                                                       Thousands

km                                                    Kilometre(s)

km²                                                   Square kilometre(s)

KPIs                                                  Key performance indicators

lead                                                  Indication of a potential exploration prospect

Lifex                                                 Life extension capex

LNG                                                      Liquefied Natural Gas

London Stock Exchange or LSE         London Stock Exchange Plc

LTI                                                    Lost time Injury

LTIP                                                  Long-term incentive plan

LWI                                                   Light Well Intervention

M&A                                                 Mergers and acquisitions

m                                                      Metre(s)

NFA                                                  No Further Activity - forecast without new Capex invested

NOCs                                                MNational oil company

O&G                                                                 Oil and gas

OECD                                               Organisation for Economic Cooperation and Development

Op.                                                   Operator

Opex                                                                Operating expenditure

Ordinary Shares                                 ordinary shares of 10 pence each

Petroleum                                          Oil, gas, condensate and natural gas liquids

Petrosoma                                        Petrosoma Limited (JV partner in Somaliland)

Prospect                                           An area of exploration in which hydrocarbons have been predicted to exist in economic quantity. A group of prospects of a similar nature constitutes a play.

PSA                                                  Production sharing agreementQCA Code   Corporate Governance Code for Small and Mid-Size Quoted Companies 2018

RBL                                                  Reserve-Based Lending

Reserves                                           Reserves are those quantities of petroleum anticipated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions. Reserves must satisfy four criteria; they must be discovered, recoverable, commercial and remaining based on the development projects applied. Reserves are further categorised in accordance with the level of certainty associated with the estimates and may be sub-classified based on project maturity and/or characterised by development and production status

RTO                                                  Reverse takeover (pursuant to Rule 14 of the AIM Rules)

SPA                                                  Sale and Purchase Agreements

Seismic                                             Data, obtained using a sound source and receiver, that is processed to provide a representation of a vertical cross-section through the subsurface layers

SOFR                                                Secured Overnight Financing Rate

Shares                                              10p ordinary shares

Shareholders                                     Ordinary shareholders of 10p each in the Company

Subsidiary                                         A subsidiary undertaking as defined in the 2006 Act

Sonangol                                          Sonangol Pesquisa e Producao S.A.        

Sonangol EP                                     Sociedade Nacional de Combustíveis de Angola, Empresa

                                                         Pública

TCFD                                                Task force on Climate-related Financial Disclosure

Third and Fourth Period                      Exploration terms: Third Period is to May 2025 with a work commitment of 500km 2D seismic acquisition; Fourth Period is to October 2026 with a work commitment of 1,000km 2D seismic acquisition and one exploration well

Trafigura                                            Trafigura PTE

TRIF                                                  Total Recordable Incident Frequency

United Kingdom or UK                       The United Kingdom of Great Britain and Northern Ireland

Working Interest or WI                        A Company's equity interest in a project before reduction for royalties or production share owed to others under the applicable fiscal terms

ZRF                                                   Zero Routine Flaring