Meren Energy Inc. (MER) Earnings Call Transcript & Summary

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 Fourth Quarter 2023 Results Management Presentation. [Operator Instructions] 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 on to Mr. Shahin Amini, Africa Oil's Head of Investor Relations. Please go ahead, Mr. Amini.

Thank you, Sandra. On behalf of management, I thank you for joining us today for our fourth quarter and full year 2023 results presentation. We appreciate your interest and support. On the call today, we have President and CEO, Dr. Roger Tucker; and our CFO, Mr. Pascal Nicodeme. Roger will start with an introduction and the highlights of the results before Pascal presents the quarter's results in more detail. Roger will then cover Africa Oil's 2024 outlook and outline our strategic priorities before we go into the Q&A session. But first, as always, I would like to remind you 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 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 SEDAR. Roger, we are ready for you. Please go ahead.

Next slide, please. Thank you very much for joining us today. Before we get into the -- the presentation, what I'd like to do is just reaffirm our strategic principles. And these are principles that have developed since we started to make presentations to the investment community back in September and remain the same. The first thing is that's slightly on the top right, that we want to remain focused on what are effectively world-class assets, both in the production demand and the exploration domain and the development and appraisal demand. We are currently partnered uniquely with Tier 1 operators and notably Total and Chevron. We wish to maintain equity exposure in the assets that we have at affordable levels not challenging our balance sheet. And we wish to try to consolidate our ownership in the core assets, which we, as I say, consider to be world class. As I've been saying to you since September, we'll see growth opportunities only within the existing core assets that we have got. And of course, we are targeting near-term rewards for shareholders. And so those are our strategic principles, which remain intact today. So next slide. In terms of how we have progressed along that line, 2023 highlights that I think are the most important to us are, firstly, the renewal of OML 130 for a further 20 years, which has, of course, freed up the possibility of making incremental investments in that area. In addition, we have received $175 million in dividends from our investments in Prime and we have, as you will see, met our midpoint predictions for 2023 both in production and cash flow from operations. We have converted OML 130 over OML 127 to the new Nigerian tax terms, which cut the headline tax rate from 50% to 30%. In addition, the thing that perhaps you're most interested in, we have had in 2023, a very successful appraisal and testing program in Namibia, which supports our concept that this is going to be a significant development of a world-class discovery. Along the way, we have maintained a strong balance sheet. We've not overstretched our liquidity in any way. We have been returning dividends and have recommenced the share buyback program, and we solely focused our investments on our underlying core assets. Next slide, please. And then to continue, I'll just reaffirm what we have already achieved in 2024, which I think is a very strong indication that our strategic direction is progressing well. We have completed the farmouts to -- or farm down to Total in Impact in Namibia. And this is a transformational transaction, which results in us being carried completely through all costs, both exploration and development all the way through to first hydrocarbons in that block. We had initiated the production startup of a Akpo West as a tieback to the FPSO, which should have over the year up to 14,000 barrels a day of incremental production. In addition, then you will have seen that there has been an announcement that we've appeared to have encountered additional hydrocarbons in a totally separate structure in Namibia in Mangetti-1X well, which has encountered hydrocarbons in at least 3 different zones, which further supports the decision that we made to continue within Namibia. And we continued investing in Block 3B/4B, which is a block that we've increased our equity position into, 26.25%. It's a block which is of strategic importance in the Orange Basin. And we are in very advanced discussions to farm down that block over the next coming months, which should allow us to proceed with good activities in that area. And with that, what I will do is pass over now to Pascal to take you through the financial aspects of 2023.

Thank you, Roger. The first [ new set ] of these annual results is the [ path ] that we have successfully met our 2023 guidance. In terms of production, slightly a -- midpoint in terms of [indiscernible] in production and also in terms of cash flow from operations, slightly below $300 million versus the guidance we put out of $290 million. We can already see the impact of the field campaign that we are carrying out on Egina and Akpo. And note that the Q4 production was slightly down similarly due to planned maintenance so we expect this to recover in Q1 and Q2 of 2024. I think this is the evidence that we are sitting on a world-class assets, which are very predictable and have a very robust performance. And again, in this guidance, this is the evidence that we feel are giving us credit in. Next slide, please. Next slide is the financial highlights for Africa Oil. We are posting this year $87 million of net income which is a significant improvement compared to last year. But still, this year has been impacted by a few exceptional items, noncash still, but exceptional items. The latest one in Q4 was an impairment at high level of $132 million. So without that impairment, we would have posted basically a $43 million result for the quarter. And this impairment is simply due to an increased discount rate at Prime level due to the now lower tax rate which is applicable in Nigeria. This is a big [ concern ] but when you compare to weighted average cost of capital, if you decrease your tax rate you basically [indiscernible] on the debt, and therefore, the cost of debt is increasing. So it's a bit of a mechanical impact that we saw in Q4, and we actually saw the benefit of this decreased tax rate in the previous quarters in Q2 and Q3. When we converted to the PIA, we only had question, we have -- at that time, we had a positive effect where we, basically, posted about $200 million of credit due to the release of deferred tax liabilities. So Q4 has been impacted negatively this time, but Q2 and Q3 have been impacted positively again because of this change in tax rate. Although I have said that the performance has been consistent over the year. We see a little bit of impact from Kenya. We posted in Q2, the final impairment a [indiscernible] of $60 million, [indiscernible] final exit from Kenya, otherwise, there have been no other exceptional item in this year. Next slide, please. So this slide really shows how we have managed our cash this year. We've received $175 million from Prime by dividends. And what this half showed is basically that we have [indiscernible] means, and we have all the -- spent that we could spend. We spent $29 million shareholder on returns, both with dividends, about $23 million and share buyback of [indiscernible]. We restarted the share buyback [indiscernible] from that we have -- end of last year. We spent also in investment activities, in exploration in Nigeria and South Africa for [ $15 million ] [indiscernible] in Impact to make sure that we will keep our equity stable, even increase during this exciting occasion, exploration campaign in Namibia. So we've done that for $44 million. Continuing around [ G&As], we had a few remaining cost, I would say, in relation to exit from Kenya which stands at [ $60 million ] on tax settlement with the KRA, the Kenyan tax authority. We've also spent [ in and around ] the settings on historical cost disputes with our partners in Kenya, which are already one-offs. So all-in it means that our [indiscernible] have actually increased by [indiscernible] to $2 million. We really began in a way to maintain that strong balance sheet while continuing to return part of the cash to our shareholders. Next slide please. So just a snapshot on the prices we've achieved this year and last year at Prime level. So the -- as you know, we've put in place a new oil marketing strategy with continues to estimate [ sale ] place on the actual [ average ] trends. You might remember a few years ago when we were saying our [ plan ] goes forward. We were always exposed to potential increase in the oil price, which is not the case anymore. Now we are following closely [ daily ] trends. And the reason is that -- thanks to that [indiscernible] marketing strategy, we are saving most of our cargo spot, we sold actually all our cargo spot in Q4. We sold most of the cargo spots in 2023 and we've achieved an average sale price of about $84 but after [indiscernible] $83 average dated Brent last year. At the same time, still trying to protect our downside. And for instance, we bought 1 million barrels of production at a strike price of about $80 per barrel that is going to protect us from March to May this year. So we're still very conscious of potential downside in the oil prices, but actually at the same time at least the Brent market. The next slide is a snapshot of Prime's financials, which shows how stable the platform is, the performance has been in terms of EBITDAX and the cash flow from operations. As I said almost $300 million of cash flow from operation last year for Prime [indiscernible] almost $500 million of EBITDAX while maintaining a very strong balance sheet. The [ RPL ] is holding at $750 million gross at the moment, price [indiscernible] and $150 million of cash. So very, very stable business and conservative way of managing our [indiscernible]. Next slide, just to come back on our shareholder return program. Since we put in place that set program, we gave about [ $200 ] million since 2022 and the Board has decided to continue the existing dividend. So we are going to distribute $0.025 a share in March, again, semi-annual annual dividend. And as you all know, we have restarted our share buyback back in December 2023. So there have been a few questions regarding why we started the buyback last year. Obviously, last year was a sort of transitioning here when -- we have to focus on [indiscernible] our power and impact to ensure we could continue to fund our phase 1 exploration campaign in Namibia. First thing for us to have a conservative management of our cash balance. Now that we have signed the farmout agreement [indiscernible] Impact. We are much more predictable situation. And you know we were starting our share buyback and we have to focus on managing share buyback. Next slide, and well here I hand back to you.

Thank you very much, Pascal. Well, I think what we ought to do is just quickly go through once again and reaffirm the assets that we consider to be core. And then Nigeria, Equatorial Guinea, Namibia, and the West Coast of South Africa. These are, as already what we've saying since September latest we are going to focus all of our money and intellectual [indiscernible] while trying to clean up the rest of the portfolio. And I've always said that there is enough running on existing in these assets to create significant value. So the next slide, please. The first one, of course, is production-based asset and you obviously know very well. And the thing that we obviously say, we've been saying to you, is it's often forgotten the [indiscernible] with these assets that we're investing in that are currently doing over 300,000 barrels a day at the gross level. Hence, they are now mature, they have completed their production levels and they're very, very reliable and stable and predictable as has been pointed out by Pascal. We now via the OML 130 extension, have the ability because of the extension in the contract life to consider about bringing on and indeed do it, tie-back [ search ] and the first 1 will be Preowei, which hopefully is going to be FID-ed by the end of 2024. So again, world-class assets, very stable, very secure and our foundation of our financial structure of the company. Next slide. So how did we perform in terms of reserves and how did these assets perform? And we have published our reserves report, which you would have seen. And we are very happy with what has happened in here. The first thing to point out, you notice the third point is that we have dealing in assets that are relatively mature now. We had a reserve replacement ratio of over 50% in reserving these assets. So that means that we actually [ net to us ] produced 7.2 million barrels of oil from these assets, but we have replaced by 3.6 million barrels of the reserves. In terms of our 2P working interest reserves, you can see that we are at 52.2 million barrels now. And then, of course, the staggering number is the number on the far right, which is our 2P NPV10 net to us from 1.2 billion barrels (sic) [ $1.2 billion ]. The guidance as shown below. And we are very confident that we will come in on that production guidance. So world-class assets, stable and we're still able to do 50% in reserves replacement ratio. The next slide please, Pascal. And then what we drop down to is what we consider this as an incredibly exciting basin that we're in. What I've been saying since September to everyone is that we are here in the midst of what is going to be an emerging new petroleum profits, not just a single discovery. And you can see up in the north, what are highlighted in the Namibia and down in the South 3B/4B. But across on the right, you can see the evolution of the development of this new product. So Shell discovered the Graff field back in February 2022, Venus then came in was discovered in February '22 as well, a new very interesting discovery by Galp, Mopane in January 2024 and then we bought Mangetti in February 2024. And so this is the way these provinces development, it's early to say, but this appears to be a super charged petroleum province. Then down in the south, and we'll come on to in a little bit more detail, you'll see as an extension of the basin, still in the same basin, our block 3B/4B, which we consider to have very significant prospectivity and is on trend with the discoveries that have been made at the moment in Namibia. And we are -- I mean as I said before, actively in discussions with several parties in respect to making a farm into that area. So if we go up now to the next slide and have a look at our acreage in Namibia, the Board is getting bigger and bigger. So we've got [indiscernible]. So you can see the Venus field. There are now being 3 successful wells on the Venus structure [indiscernible] as a world-class light oil discovery. The operator has high confidence in the development of Venus by the statements that they have made. And we've always said that there is very significant -- the reason we want to [ leave it law ] is that there is very significant follow-on exploration across the activity around Venus which has already been developed by first indications of success of Mangetti-1X, seismic -- 3D seismic is in southern part of the block, is not covered at the moment by 3D seismic, is underway in some parts of the block and you should get access to that data which will allow us to delineate further cost activity towards the end of this year. Now the fantastic thing about the deal what we have done with Total in farmout is that there's no further [ cost ] on our balance sheet of this asset -- this world-class asset until first production is established whenever that is. On the next slide, please, is just a little update on EG. This is a very different situation, and we call this an infrastructure-led exploration in Equatorial Guinea because the principal asset is located right around an LNG facility, which has got significant coverage and we've assigned the acreage block EG-31 which has got significant prospectivity. It's previously never been explored really for oil. And so we are trying to target gas prospectivity in that block in order to immediately tieback to the LNG facility, which has got significant ullage in it. Farmout discussions in that block are ongoing, and we have an objective of achieving and completing a deal by the end of 2024, but as early as possible. Next slide, please. So go back then to what we're going to try to achieve in 2024, and we've made a good start. We're going to consolidate and streamline and financially derisk the portfolio. That can take a series of routes. We want to maintain our financial flexibility in order to accelerate growth. We want to maintain our shareholder capital returns. And we want to maintain the balance sheet strength to keep maximum flexibility. In terms of what we achieved, we've got the farmout and full carry in Namibia. We have acquired additional interest in this and that's now gone through in 3B, 4B. We have launched the share buyback program again, and you'll see that we initiated that program again because we bottomed on it directly after the day that we announced the Total transaction and in fact we will maintain the base dividend policy and we will achieve farmouts or farmdowns in 3B, 4B and EG-31. And we will pursue, if we can, further consolidation of our core assets and those are our strategic priorities in a very tight and clearly defined portfolio of core assets, which, as I keep repeating are of world class. Thank you very much. And that's the end of our presentation.

Before I go back to the operator, Sandra, and she can remind everyone on the instructions of how to submit questions. I would like to set some boundaries. So I do apologize, but this has got to happen. Management will not comment on the ongoing farmdown processes for blocks, 3B, 4B and EG-31 and EG-18 other than what's already been said. I trust you can appreciate, these are commercially sensitive matters and it would be inappropriate to comment at this time. We will update you on this in due course when there is material update to be shared. We also note media reports regarding third-party legal and commercial disagreements related to block EG-31. The company will not comment on such third-party matters. So with those points, now I would like to go back to Sandra, who will remind everyone on the Q&A process. Sandra, please go ahead.

[Operator Instructions] We will now take the first question from the line of Alex Smith from Investec.

A couple of quick questions for me. I think first, just a step-up in CapEx of Prime. Is this driven primarily from the underspend in '23? Or is it more activity from infill drilling. And maybe just a picture on kind of what steady state capital investment looks like? And then second of all, just given the balance sheet strength and the goal to kind of increase shareholder returns and starting the buyback program. Is there a preference for more dividends or more buybacks in the medium term? It would be good to kind of get some clarity on that as well, please.

So let me start with the CapEx especially the actual CapEx compared to guidance in 2023. I mean you're perfectly correct that the drilling campaign started late and so we didn't spend a full budget in 2023. We expect to catch up in 2024 on this infill [indiscernible] relatively lower CapEx spent in 2023. In terms of dividend versus buyback, we decided to [ instate ] a dividend some years ago, which we want to keep in pace to show our commitment in the long-term shareholder returns. And the share buyback is really the adjustment that we want to dial up or down when the conditions are ideal. Obviously, at this stage is what we believe should be a very depressed share price. There is an incentive price to increase the share buyback, and we've been in discussion with our Board to do so. So please bear with us on that.

We will now take the next question, one moment please, from the line of Matt Cooper from Peel Hunt.

I don't know if you're able to give any color on the scheduling options being considered for the rigs currently operating on Venus.

We can't give huge amounts of information on that because it's obviously the operators demand. However, I think that it is interest, as I'm sure you've seen like the fact that the Total has acquired 75% of the Tungsten Explorer from Vantage Drilling, which is now a 10-year contract. It's up mostly in Total, it's a very clever deal, which will give you an indication of the scale of drilling program that is anticipated for the Orange Basin. We anticipate that there will be both rigs in -- on the Namibia block for the foreseeable future, but then one of them may go off into different in areas. But that's basically all I can say just pointing to an interesting in development from our wonderful operator, which sort of points to the scale of activity in the block. Is that helpful anyway?

Yes. No, no, I understand you are limited on what you can say, but that's helpful. I also wanted to ask on the $132 million Prime impairment. You mentioned that was partially due to a change in technical assumptions in OML 130. I don't know if you are able to give any more details on that?

There are 2 other changes on top of -- I mean the main change, as I said, the one that has largest impact is the change in this contract and the price assumptions. Yes. And they have also changed the price assumptions, that's one. And the change in technical assumption is mainly rescheduling of production sharing contracts which actually has lowered the NPV, but nothing -- no change in reserve actually.

Okay. So that's a minor effect and it's primarily work scope as opposed to....

Yes, the largest impact is back from the change in this contract, which is now 5.5%, what it used to be at around 10%.

Okay. That's helpful. And then I just wanted to ask on the 5 new wells drilled in [indiscernible] so far. I just wondered if the well rates and also the time taken to drill those wells, are those kind of tracking predrill expectations?

We are satisfied with them, yes.

Okay. I'll sort the one in there with a quick answer. So if you could give maybe an update on your M&A strategy? And how attractive you see the M&A environment in West Africa at the moment.

I don't think we can give you any specifics on that as we are talking about 2023 results, but we are constantly reviewing opportunities in and around our assets. But as I said at the start don't expect us to leave into [indiscernible] or anywhere else. And we're only focused on the countries and around the assets that we already own.

Okay. And looking for if production assets are at a reasonable scale.

Yes.

Thank you. There are no further questions on the audio at this time. Please continue with the web questions.

Yes. Well, we've got plenty of questions from the webcast, but before I go to those, I'd like to apologize because we have received a few comments that the quality of audio isn't good enough. I do apologize. We did test the system, but clearly, the gremlins have got in the way today. So I apologize for that. We do our best to improve the quality as we make progress. Hopefully, it has got better. So -- going to the webcast, Roger, Pascal, a large number of questions about shareholder capital returns. Most of those are about buybacks. I'm not going to go through each one because some are repeat -- repetition. But really the gist of the inquiries is, what is the policy on the share buybacks? Why did we reduce the share buybacks during the month of February by 75%. And could we potentially consider doing a substantial issuer bid on top of the normal course of issuer bid. So if I may, I'm going to put this to Pascal first, and then Roger you can chime in.

Yes. So I mean you need to keep in mind that share buyback is always subject to the forecast that the company is making and the optimization of our cash position. I mean, last year, we've been in blackout for a very long period of time due to the drilling company in Namibia. Again, recently, we have been in blackout because we were drilling on Mangetti. So you need to know that during this blackout period, we are unable to change the instructions we are leading to our focus. So we need to be extremely conservative when we start -- when we had a blackout period which was the case in February when we decided to slowdown a little bit. Now we are out of blackout because in Mangetti we are going to be out of blackout tomorrow due to the financial statements released in communication. Therefore, we will be able to change our construction to our focus again. So please bear with us on that.

Roger?

I think the -- what I will say this is a general question. We hear everywhere on the share buybacks. The interesting thing about this company is it is very active. And as Pascal said, we think it is prudent to be conservative with share buybacks as we go into blackouts. The problem with that is that if the company is so active, we spend lots and lots of time in blackout. I know that frustrates everyone. But as Pascal states once you really blackout, you cannot modify the terms of your buyback program. And so I'm afraid that we will continue to reduce this as we go into blackout. And so on the positive side, you've got a company that is actively doing stuff and has got stuff to announce. On the negative side, we do have to reduce to maintain prudence as we go into these blackouts. And it's a function of the fact that we are anticipating in terminating potential transactions and drill. Pascal, do you want to add anything to that?

Well, I just want to mention that the new share price is particularly depressed at the moment. So there is definitely a logic to continue the share buyback and [ uncertain ] to maybe to increase it in the near future.

I think that's actually a good opening for the next question, Roger, something that you said. I think we need to tackle this. There is a question about the G&A costs and the fact that they've gone up. And the question is, well, can you justify this? Could you achieve the same with fewer people?

So the G&A has gone up and the reason it's gone up actually on the other side of the equation, the advisers' costs [indiscernible] et cetera, has gone down. And back in last September, the Board approved the strategy that we are now pursuing and that required us to beef up the team. And so we have had a couple of extra people come on Board, namely, Oliver Quinn, who is our Chief Commercial Officer; and Joanna Kay, who is our General Counsel [Audio Gap] which was generated by Africa Oil totally internally. Likewise, the management of the farmdown processing through the 4B and EG is now entirely managed [Audio Gap] of the strategy is being done using [Audio Gap ] extra people. Could we do it with less people? You could if you didn't want to try to grow the company and the Board has permitted to trying to grow the company, hence, the transactions that we're doing at the moment.

Thank you, Roger. One for Pascal. Hopefully, easy one. There's a question on our short-term deposit yields. Could you just give a ballpark figure for what we're getting for those?

Yes. So we -- at the moment, we sit on roughly [ $200 ] million of cash. We have $64 million deposited with Canadian banks and higher saving accounts. We also have about [ $120 ] million of time deposits over 1 month or 3 months or whatever. So only with investment with banks. So quite conservative way of managing the treasury, but we are still managing to get between 5.2% and 5.4% at the moment, which I think is quite competitive by taking relatively small risk and may improve. So of course, one parameter that we want this CapEx remain available. We don't want to invest into [ exotic ] products or commit into long investment time line.

Thank you, Pascal. One on Prime production, the observation is that the 2024 guidance is down and there's increasing gas production. Are we concerned about the production is about to collapse. Well, I'm not but then it's not a question to me. So Roger, what do you think?

No, we're not concerned the production is going to collapse. I mean there's -- there are 2 reserve reports that have been written by external consultants, all of whom support the production profiles that we think we put together. So as I said right at the start, the one attraction, I think, of Africa Oil in these assets is that they will not fall over because they are so large.

Very good. And I suppose I would add to that. We've actually got a good track record of with our guidance. We keep hitting the midpoint. So I think that goes to the predictability of these assets and let's face it. In the last 4 years, we've got so much money out of this or the reserves, and we saw our material reserves that have been absolutely fantastic assets. I'm going to go to a number of questions from one of our long-standing private investors in Sweden, [ Mikael ]. there is one on buybacks. And I think we've tackled that, Mikael, I hope you accept the answer we've given you to that. There's one on communication strategy. Obviously, there's a degree of frustration over what has been disclosed so far on our high-impact catalysts offshore Namibia. And the question is, well, when can we expect to hear more? When are you in a position to provide those critical technical data?

Well, I'll take that one. The -- we are, as I said at the start, associated with tier-1 operators. And Total is an incredible operator, both for us in Nigeria and the Namibia Chevron likewise. However, we are restricted under the terms of our agreements in going out and issuing more information than the operator is actually currently issuing into the public markets. And obviously, we have access to the raw data and we have our own opinions and we make our own decisions on the basis of that data. But currently, we are restricted in exactly what we can say to the market and you must -- I can say unfortunately we must follow what the operator says. But as drilling goes on and [Audio Gap] we start to see that there is going to be [indiscernible] and all the rest of it. There will ultimately be a time for a significant announcements on just what the potential of these assets are. When that is and when we can start putting pressure on that is something that, obviously, we're working on at the moment. But we are determined to be a good partner with Total. And we don't want any leaks if you like. But there's an awful lot of data that you can get, which comes from the NAMCOR and I think at some point, NAMCOR will start to just state oil company in Namibia. NAMCOR will start to put pressure on the operators. By the way, it's exactly the same in the Shell block. Shell releasing an awful lot of information on their block as well. And this is sort of normal, if you like, for the majors that hold things until they're absolutely ready to reveal the entire story. So we hear you, and we are doing our best to work our way through this.

I think this final one we'll take from Mikael is, can you provide more color or elaborate on your valuation thinking when you did the Impact farmout bill? Is there anything you can provide. I think I can first start it. Or if there are any -- all right. Let me start, and then you can correct my mistakes. So we do have very detailed discounted cash flow models. We look at the whole range of scenarios -- technical scenarios. But as you can imagine, this is a very fast-moving story, which really reflects the great opportunity we have here. And it is fast moving. So obviously, we had that detailed analysis when we sort of, as a shareholder, an impact made at decision in relation to that strategic farmout. But again, to Roger's earlier point, the fact that we had this Mangetti success post the farmout just goes to show what a good decision it was. There's a lot of running room on this block, and [indiscernible] is very important and is all plateful well, will be paid for on the completion of the deal, but they're currently picking up the tabs already. So there is no upfront cost. And so yes, it's -- we're very, very pleased with that. Roger?

Yes, it is -- we obviously know what we think the value of it is today. I've also said, and I said at the Pareto Conference in London that should the opportunity arise, we maybe buyers of additional equity in this asset and should that occur, should it occur, we may, well, see what our minimum internal value that this asset is. There's nothing in discussions at the moment but we have a very, very clear idea of what the value -- the NPV of this asset is both existing in this discovery, potentially in the exploration potential on the block.

Thank you. Next question. Again, on valuation, but one step -- one level higher. Any views on valuation of Africa Oil. With all your respect, gentlemen, I'll tackle this one as well. Obviously, as a Canadian issuer, we can't tell you what the value is. That would be a red line that we will never cross. What I'd point you to is our statement of reserves and our year-end numbers. So you can take the statement of reserves. You know what the independent valuation of the Prime assets are. And then you need to look at our combined net debt with Prime. So that will obviously take you along. I think the bottom line is that we are probably trading at a ridiculously low value now where there's hardly -- well, I would say, 0 value for Venus. So anyhow, that will be your starting point. So I don't know, Roger, Pascal, if you want to add anything to that. So I will point you to the statement of reserves as the starting point for valuing the company. A couple of strategic ones I have here for you, Roger. One is, in the past, Africa Oil had guided to have the aspiration to buy producing assets. Is that still part of the plan? Or have we stopped that -- is this development endeavor.

By additional production I didn't answer the question earlier on. We are not going [indiscernible] we've got so much potential in the existing core assets, another producing asset in -- and I'm just saying it off the top of my head, no specific rise in you [indiscernible]. We will look at opportunities around the existing assets. And once we've stabilized and maximized the value of the existing core assets, we will then take a strategic decision of what we do with the company in the next phase of growth. But what we're trying to do at the moment is tick off all of the consolidation opportunities that we have, get ourselves into a position that we have a strong foundation to look at other opportunities, and we'll be having [indiscernible] in the next 4, 5 months in the company.

There is a question on Agbami. It is obviously well known, well reported in the media that Equinor and Chappal had agreed a deal. Do you have any comments on the status of this?

We can say that Prime has decided not to execute its preemption rights in respect of the Chappal-Equinor transaction, and we will stand on the sidelines just watching as that deal progresses through to completion.

There's a question on the Preowei development. Can you elaborate on the parameters that would be used for a final investment decision for this project? Is there anything holding it back?

No, there's nothing holding it back at all, it has passed all its internal economic approvals and it is now going to progress through to FID.

Actually, I think we still continue to have a bit of issue with this audio. So what I'm going to do is actually, hopefully, this might help bring this forward to you as a self and we have an issue with that speaker, yes, possibly. So maybe I have that one as well. So hopefully, that helps, if you could just come closer to this. Thank you, Roger. Sorry about this. There is -- someone has made the observation that Maggy Shino, the Petroleum Commissioner in Namibia, had said recently that the Namibian government and NAMCOR expect to have appraisal reports on all these discoveries offshore in Namibia. So on the Shell Block Galp and obviously, the Total operated 2913B. And basically, people are now speculating whether we are getting very close to having more information on Venus. And could there be an FID in 2024. I think the -- hopefully, this is now -- this audio is now better. And I apologize as I don't know whether any of you are aware, but today is the day that we are moving offices and we're in a sort of borrowed office, which hasn't really worked terribly well. So I apologize for the poor audio.

Yes, in a previous question, I -- asked about when can you expect more information on Namibia. I did point towards there are other sources of information namely NAMCOR. And I think that this question is pointed right to it. I do think that NAMCOR again start to push for more fulsome, if you like, information to be submitted because after all, there's some fairly significant strategic decisions that the government have of Namibia needs to make. In terms of FID on Venus in 2024, personally and I'm not speaking for Total, I would doubt it because I think there is some more work to be done. And as the CEO of Total said, what we need to do is identify the sweet spots in this huge geography in order to place the first FPSO in the correct place and that is quite a complex thing to do at these water depths, which requires both seismic and integration of well data. It's not impossible. They go for FID in 2024, but personally as a regional geoscientist, I would doubt it.

Thank you Roger. We've just got a few minutes left. I just want to give one final opportunity if there's anyone out there that want to submit a question over the conference call line and speak to us. So Sandra, would you be able to just have a look, see if anyone that wants to raise their hand.

[Operator Instructions] No questions at this time. Please continue.

Okay. A strategic one that Roger could tackle, is the company considering broadening its investment area outside of Africa?

Right at the moment, we've got -- as I said, we've got a very, very nice set of core assets which have got plenty of running room in them. To maintain the strategy and as I said, we are going to have to make a strategic decision on what we do next in the next 4, 5 months or so. We will consider all options. But at the moment, we are going to be focused purely on the assets that we have got.

Very good. George has just confirmed we have better audio. So great. That's good. And there was one -- someone just texted me. It's great as getting questions text, everything, WhatsApp. But the text question is that apparently, the point was missed on the substantial issue a bit, you kind of tackled it Pascal, but it keeps coming, coming and coming. Would you be able to just wrap things on around the share buybacks, but specifically tackle the SIB?

Yes. So yes, at the moment, so we have this NCI being placed where we are kept at 10% of our [indiscernible] and so we are targeting by a significant portion of that 10% [indiscernible]. We still want to be conservative and keep our cash position to prepare for potential other deals [indiscernible] has discussed potentially the -- potential consolidation of our investments into our various companies. So that's something we are considering at the moment, which means that we need to stick to part of the $230 million that we on the balance sheet as of today. So I think the immediate answer would be not for the moment until we have clarity on this consolidation. And I think Roger hinted a few ideas in terms of impact on Prime potentially. So that's something we keep in mind. But at the same time, we have ample flexibility with NC, the current NCIB to increase the speed of the NCIB which we are definitely considering at the moment. And so that's a decision that is going, of course, to be revisited at least by the Board on a quarterly basis. So we had a Board meeting yesterday. We will have another one in the quarter's time to make sure that the level of the NCIB is set at the right level.

Okay. Two questions on the strategic farmdown deal between Impact and Total. One is, if Impact and by extension Africa oil carried on all the activities now, are we covered on Mangetti?

Yes. So the carry covers exploration and appraisal expenditures on both blocks until production starts.

And that's from the beginning of this year.

That's from now this year.

Beginning packaged at the 1st of June -- 1st of January.

Packaged into the 1st of Jan, the first cash call to be received by Total this year is basically [indiscernible]. So this is the first time that Total is going to pay cash flow on our behalf. And they are going to pay all the cash flows going forward. But I think that's -- the key point to make is that we will not have to [ stand in our corner ] in equity raises for Impact going forward. Okay, which is a key point for us. As you know, we spent $44 million last year [ stand in our corner ] and this year could have been much longer. And there's no interest on the cap and there is no interest on the cap.

Yes. So just to reaffirm that we talk about the 2 blocks. We do have 2 pieces of acreage but the carry covers activity, including, say, Mangetti, including the next exploration well, which is it's going to be somewhere else in the block, and it accumulates over the work on both of these blocks until first hydrocarbons. So includes development as well, everything.

Yes. We're running it well. We have run out of time. I'm going to go off script here and share some of my own personal experience, if I may. I've had the privilege of being involved with the Africa Oil story for 13 years now. Some of you know, I used to cover it as a sell-side analyst, and I joined the company 4 years -- well, 4.5 years ago. The company is in absolutely great shape and hopefully, you can see that in our year-end results. I'm very happy, and I have to say that the recent changes that Roger has implemented are very good, and we are in an excellent shape, and we have a great platform to take the next steps. And we will see this volatility in the markets, and we will get through this as we always have. That is my view, and that's my position, I feel very strongly about it. On that, Roger, over to you for any concluding remarks.

Yes. And all what I will say is I do apologize for this audio. It wasn't anticipated to be like this. And the next one we will be in our new offices. And you've probably seen me on screen here. We're absolutely freezing cold in here because not only is the audio bad, but the heating in the room isn't working. So we do need to get off fairly soon. But thank you very much for participating in this, and we'll see you next time.