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 Management's Presentation on the Proposed Consolidation of Prime Oil & Gas. [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 over to Mr. Shahin Amini, Africa Oil's Investor Relations Manager.

Thank you, Sandra. And I thank all those joining us today to see our presentation on the consolidation of Prime Oil & Gas into Africa Oil. Today, I am joined by our President and Chief Executive Officer, Roger Tucker; our Chief Financial Officer, Pascal Nicodeme; and our Chief Commercial Officer, Oliver Quinn. Roger will present the strategic context and the benefits of the deal for Africa Oil's shareholders before we go into a Q&A session. First, allow me to remind you of some important messages on forward-looking statements. Today's presentation includes forward-looking statements and there is no guarantee that actual outcomes will be in line with these forward-looking statements. You are encouraged to refer to our financial statements and management discussion and analysis reports that are available on our website for more details. I will now hand you over to Roger.

Thank you, Shahin, and good afternoon, everybody. Thank you very much for joining this call. I'm delighted today to be announcing our deal to take full control of Prime and consolidate its earnings and assets into Africa Oil. However, before I set out the benefits for shareholders and the strategic merits of the deal, I'd like to spend a brief moment putting today's announcement in context. This is the culmination of 10 months' work based on the strategic plan I laid out last year, which was approved by the Board, as I set out with the new company's -- the company's Chief Executive. In the intervening period, we have derisked our growth with 2 vital farm-downs. We've launched the buyback program and reiterated a commitment to a baseline dividend and we make a material advance on that again today. We promise to move forward on consolidating our positions in Prime and Impact. These are not easy steps as they currently work like complex holdings and we've done exactly that. And how will we measure these achievements? Well, this for me, has a market capitalization of approximately $1 billion. And as the management team, we believe all the steps taken this year, including today's announcement, have resulted in $1.5 billion in gross consideration. This is a huge amount of transaction activity over a very short space of time. That's at the gross level. We believe the combination of returns and growth with the addition of a new strategically aligned cornerstone Investor offers a differentiated investment case amongst all of our peer group. But let me now revise the details of today's news. Through this agreement, we consolidated BTG's 50% holding -- consolidated 50% shareholding in Prime so that Prime becomes a wholly owned subsidiary of an enlarged AOC, BTG will receive 35% of the shares in the enlarged AOC and AOC's existing shareholders retain 65% of the shares. Let me emphasize, AOC will change from being an indirect equity holder to being a direct controlling owner of these assets and cash flows in their entirety. It's a very significant change. Structuring an appropriate governance framework was a critical element for this agreement. AOC and BTG have entered into an investor rights agreement to govern the relationship as well as reconstituting the enlarged AOC's board. I will continue as AOC's President and Chief Executive Officer; and Huw Jenkins, BTG's Vice Chair and the current Chairman of Prime's Supervisory Board will be joining as a Non-Executive Chairman. The completion of this deal will require AOC's shareholders' approval and other customary consents such as government and regulatory approvals. AOC will remain listed on the TSX and the Nasdaq-Stockholm following the deal completion. AOC's existing London office will further [ serve ] as the headquarters of the enlarged AOC. So let's look at what our shareholders receive when the deal completes as a result of this transaction. As the chart shows, AOC's shareholders will see substantial immediate upside in both reserves production and free cash flows. Following the restructuring, they will gain material increase in shareholder capital returns. We will double our reserves and production base in assets that we know very well. We are set to report substantially higher operating free cash flow metrics. And we will materially enhance our position relative to our peer group of companies. The enlarged AOC following completion of this arrangement will introduce a new cornerstone shareholder returns program that will reward investors with a 3-fold increase in dividend distributions. Furthermore, there is commitment in the returns policy to distribute 50% of excess free cash flow through additional dividends and/or share buybacks. Now turning to the strategic benefits of this transaction. We know these mid-life producing assets well and have confidence in their remaining reserves. These are complemented with low-risk, high-return opportunities such as the Preowei development project that we have spoken to frequently in the past. As already noted, the deal is highly accretive on reverses production and cash flows for AOC's shareholders. I must also highlight the vital advantage of gaining direct control of Prime's cash flows and balance sheet. There is scope to optimize and streamline operations and in turn create values through synergies that can be gained through this consolidation. For instance, the merged financial resources and capital structures provide for us to optimize debt financing for the enlarged AOC. Our Board understands that investors in this sector seek capital returns. We will therefore introduce $100 million base dividend commitment plus a further promise of 50% of free cash flow net of base dividend. The compelling technical and financial merits of the deal are ultimately enable us for us to deliver our shareholder returns commitment. In BTG, we gained a long-term, sophisticated and well-funded shareholder. We have a long-standing working relationship with BTG since we acquired our Prime interest in January of 2020. In effect, we are creating a highly differentiated and secure platform for disciplined growth. Let me remind you of the assets in question, and I've shown this particular slide many times in the past. We have interest in large-scale assets; Agbami, Akpo and Egina, that in aggregate today produce more than 300,000 barrels a day and are 3 of the top 5 producing fields in Nigeria. AOC is partnered with Tier 1 operators, Total and Chevron, whose budgets and timetable are unlikely to be disrupted by cyclical factors. These assets continue to be the priority projects for these operators and there is an attractive scope for further investments supported by favorable regulatory and fiscal framework in Nigeria. As a reminder, our licenses converted last year to the new PIA, reducing headline tax rate from 50% to 30%. There are also attractive development opportunities. The Preowei field, which we've talked about many times before, is a low-risk, high internal rate of return development opportunity with FID expected by end of 2024 with the production start-up targeting 2027, which will have predicted gross headline production of 65,000 barrels a day. And the quality of these assets comes through when we compare ourselves in the space. It reflects our superior profitability metrics. So let's have a look at the metrics against our peer group. First of all, in terms of excellent EBITDA. When we advanced in the position where we were, in the light orange to the dark orange, much further to the right, we advanced into a distinct new peer group. We've effectively jumped out of our peer group. In addition, we enjoy a high EBITDA margin driven by our premium Brent pricing and lower operating costs. Our full year 2023 EBITDA per barrel is $61 and that is 60% higher than the peer group average of $38. Looking at costs. Our average $15 per barrel OpEx is about 1/3 below the peer group average. So high-quality assets yielding excellent financial returns. So it is fair to say that the proposed consolidation is a great achievement for AOC as we doubled our reserves in production in our world-class assets, taking up year-end 2023 reserves. The pro forma company has a material reserve base of more than 100 million barrels. And taking the [ middle ] points of our 2024 production guidance, the enlarged AOC would have average daily production of 36,000 barrels a day. This provides for a healthy reserve and production index of 8 years, ahead of -- which is obviously ahead of our Orange Basin production, which is likely to start-up in 2029 or 2030. Considering the technical and financial benefits, it is natural for AOC to seek this consolidation and take direct control of our cash flows. Replacing our current equity method of accounting with consolidating 100% of Prime's financials makes us a simpler and more easily understood company. This will also open up new business development opportunities, which would otherwise be unavailable to us. There are opportunities through merging and optimizing the business where we gained, for instance, benefits of a larger scale capital structure and also eliminating duplicated governance costs. Recall that we have partnered with BTG since January 2020 when we acquired our interest in Prime. In fact, they provided the bridge loan to AOC that allowed us to acquire the Nigerian assets. So I am delighted to have a major financial group and sophisticated energy investor wanting to become AOC's new cornerstone investor. BTG is the largest investment bank in Latin America with $300 billion of assets under management and has global reach through its international presence. They have deep, long-standing expertise in the energy sector, including their long-standing investment in Prime alongside us. Through other successful investments in the upstream oil and gas, they've shown a long-term commitment to the sector. We have total strategic alignment in growing a sustainable upstream company, whilst maintaining commitment to substantial shareholder returns. BTG can also facilitate access to new business opportunities and potentially unlock new sources of funding across the capital structure. I want to just frame our growth opportunities within our recent achievements and the proposed consolidation. Our existing opportunity set provides us with long-life projects, offshore Nigeria and Namibia. Our 2 strategic farm-down agreements achieved earlier this year position us as the leading independent E&P company in the Orange Basin. We have our interest in the funded Venus development project and we have our carried high Impact exploration assets, offshore Namibia and South Africa. So the new management team has delivered innovative strategic transactions, thereby removing the funding pressure from AOC's balance sheet. These are complemented with our short cycle investment projects offshore Nigeria that will be funded from operating cash flow. I trust that you agree that with doubling our scale through this consolidation, maintaining a strong balance sheet with healthy leverage ratios and a new cornerstone shareholder, we are a more attractive and capable deal counterparty. Formulating and presenting a clear capital allocation framework has been one of my top priorities since joining AOC. And as you would have seen from our past presentations, maintaining sufficient liquidity and a robust balance sheet is the foundation of our business. This sustains our growth and shareholder capital returns through the business cycle. I am pleased that we have excellent alignment with BTG on the capital allocation framework, including the base dividend policy of $100 million with flexibility to distribute excess free cash flow to shareholders. The enlarged AOC will benefit from a mix of growth opportunities. Our investment focus is deploying development capital on short cycle production growth such as the infill drilling and the Preowei development project offshore Nigeria. These are complemented by our funded Venus development project offshore Namibia and are funded exploration assets in the Orange Basin. Considering our strong balance sheet and high net back production and with the entry of a sophisticated cornerstone investor, we will be in a great place to pursue growth and take advantage of opportunities in upstream oil and gas as the industry evolves through the energy transition. We believe the combination of returns and growth following this deal offer a differentiated investment case amongst our peer group. In terms of the steps to completion, time line -- it's actually a series of steps, all of which are routined. The deal is basically a shareholding reorganization. Africa Oil and BTG have established relationships in Nigeria with a track record of doing successful business in the country and both parties will remain invested in Nigeria. The deal will require AOC shareholder approval. And we plan the shareholder meeting to be around mid-October after proxy document circulation in September. Final consents and approvals, including Nigerian Government approval, are expected by the end of Q3 2025, but obviously we'll push to make that as quick as possible. And so in summary and before opening up for questions, a quick reminder of the highlights of this deal for our shareholders. 1, we gain full control of Prime's license, and therefore, its cash flows and balance sheet. 2, we can now introduce a revised, stronger shareholder returns policy and know with greater confidence how to plan and control our capital allocations. 3, to reiterate the return policy, bring shareholders an enlarged base dividends and incremental dividend distributions and possibly share buybacks. And the group gains a committed cornerstone shareholder with a strong platform with greater scale to support further growth opportunities. And with that, we will welcome your questions. And I will ask 2 of my colleagues to come up and stand beside me. So yes, Oliver Quinn and Pascal will now join me.

[Operator Instructions] We will now take the first question coming from the line of Matt Cooper from Peel Hunt.

Congratulations on the deal. I clearly understand the rationale from your side in terms of creating a more material E&P with much more simplified financial structure. And from BTG's side, what's the key rationale for the deal to gain exposure to your Namibian exploration?

Obviously, you will have to ask BTG. But in Huw's statement, it is apparent that they do highly regard this management team and they are looking to create a significant growth vehicle. They want to grow this entity. They have supported the valuation that we hold of Venus, hence, why we've ended up with the exchange ratio. And it's very gratifying that financial institution at the scale and skill of BTG have reviewed that data and applied it, as you can work out, a significant valuation to our interest in the Orange Basin. But it was -- the deal isn't fundamentally driven by their desire to get into specifically Venus, it's more a desire to create a new vehicle which they can use, that we can use to grow.

I think I could just add, there's an obvious simplification for both sides, Mark, right, in the sense that Roger talked about eliminating the governance process through Prime and that gets simplified. So there are some synergies around that, but there's just a big efficiency in doing that, and I think both sides recognize that very clearly.

And will there be much of a cost benefit to that kind of essentially reduced G&A or is it more just a case of less uncertainty around timing of distribution of dividends and a more standard financial statement for an E&P?

There will be cost savings. As I said, the headquarters will come to here. The single element that we've got sort of common IT issues, systems, et cetera, and we can actually streamline all of that. We obviously have the governance of Prime, which can obviously now completely disappear because it actually falls into the new entity. But the real reason for doing this isn't to do reduction in G&A, there will be a reduction and we will target the best that we possibly can get from that, but it's the creation of a fundamentally new entity which is driving us forward.

Okay. That's helpful. I just wanted to ask, what do you see as kind of the critical path steps to achieving the guided 3Q next year completion? And also, do you think there's much scope to beat on that guidance?

Yes, I think it's a good question. So there's 2 critical steps in there. Of course, one is, Africa Oil shareholder vote, which we've signaled in this package, it's kind of October. Also, we feel fairly confident around that given the accretion of the deal and the strategic case, but it's important that we get that shareholder support. So that's kind of step one. And then the other point in there is really Nigerian regulatory approvals. So we've had very good engagement so far with the Nigerian authorities, but they were aware of this announcement before today, of course, and worked together on that. So we'll need a consent if you like, but I think what we're very confident about is if you think about this transaction compared to other Nigerian transactions. This isn't a sale, right? It's clearly not a cash transaction where one party is buying and one is leaving. Everybody's staying. We're kind of reiterating our commitment to Nigeria, if you like. So we feel it's a very positive story for the country, it's a very positive story for the investors. But we still, of course, need our partner and the government's consent. And that probably comes as kind of last step, if you like for a completion.

So to put it another way, we've used -- we've given you sort of a conservative guidance. We would do all we can to bring that forward and then we'll keep you informed of how we're getting on as we go through it. But as Oliver said, this isn't a typical case where somebody is selling up and leaving and taking cash off the table in Nigeria, both the shareholders are continuing.

Yes, okay. Makes sense. And obviously, a key indication of that is I assume your new dividend policy becomes active on completion of this deal. So that's why it's kind of been planned. And then I guess the kind of final question, and clearly, this increases your scope to do further M&A given it's all equity. Can you kind of comment on the sort of maximum scale of M&A deal that you might look at now?

Well, this one has doubled the production of the company. And I think I've sat down with you before and we had some very lofty aspirations of where we want to take the production level. I'm not going to give you an absolute scale. What actually I will say though is that what we have in this company that does differentiate us are these big world-class assets. We won't be looking to acquire things which don't fit in the asset class range. Do you see what I mean? So we want to stick within these type of asset. And as I think I mentioned when we met, anything we do will be driven from the rocks up, not from the spread sheet down. And that's one of the things I think that BTG are interested in, in relation to the way that we do our work. And I think it's a great fit between the way we work and the way that they work.

Yes. And if you -- one might say, we think about it, Mark, which I think is about what are we creating more than the other way around, which is what can it do? It created something as described, very strong balance sheet, very clear and strong returns and dividend policy. All the CapEx taken out through the transactions that we've done. So the organic growth, if you like, through -- into the mid next decade is built in there and at low CapEx. So you put all that together and you say, well, okay, that is an incredibly strong platform in the independent E&P sector. What it then goes and does, I mean, that's a matter of discipline in terms of the organics and growth. But as Roger said, a lot of this conversation has been around strategic alignment with a big new shareholder. And so I think there's a multiple sets of things we could go and do that. But I think you'll see us be disciplined, because again, we're not going to water down the platform, if that makes sense, just for the sake of it. But we do feel it is a compelling and strong platform to go lead some consolidation.

[Operator Instructions] There are no further questions on the telephone at this time, please continue with the webcast questions.

I will do, Sandra. So we do have a number of questions. One is on, well, it's kind of asked by the Matt regarding potential M&A activity, but this one is from a different angle. Given BTG's Latin American credentials and routes, is it possible that Africa Oil could be looking for opportunities beyond Africa, possibly in Latin America?

We will be rebranding the company on completion. And as I said in the previous answer, what we're looking for would be a particular type of asset in a particular type of situation. And you're absolutely right, BTG have tremendous relationships in that part of the world and maybe in other parts of the world. And so we will look at assets outside of Africa. And often people then say, well, you're a West Africa specialist. Well, actually I'm not. I've worked in every single continent in the world, including in Russia. And indeed, I ran the biggest redevelopment project in Latin America, in Venezuela. And so actually, we and Oliver has worked also all over the world. So it is not a risk if we go and step out into something else. But as I say, critically, it will be a style of asset replicating to a certain extent the stuff that we've got at the moment. And we will not be forced into doing something that doesn't fit.

Let's put a question to Pascal. Obviously, we've talked about the larger company and the consolidated capital structure. Pascal, would you share your views around the synergies and optionality? And can we reduce, for example, reduce our cost of capital? As a former banker, how do you view this?

I think bias this year. We are clearly changing lead. And it's clear that we will be able to tap different financing options. As of today, you know that we have this RBL facility in place at that Prime level. We do have this coverage facility at the Africa Oil which we are really using as a liquidity road map, which is not drawn at the moment. It's clear that by doubling our production, we will be able to refinance the existing RBL with the changed structure a little bit. And we will make the appetite for potential bondholders even greater. So I think clearly there is a matter of size here. And doubling the size of the company will enhance the possibility of raising capital at the Africa Oil level definitely. In terms of cost of capital, I think the Prime RBL is already quite cost competitive. But definitely, we will continue to refinance and extend this debt facility in order to maintain and potentially minimize our cost of capital.

Oliver, can you give an update on the office of minority?

Yes, sure. So I think as we announced earlier, we've made a cash offer to buy out some of the minority shareholders in Impact Oil & Gas, which of course is the parent of the Venus discovery in Namibia. So that's proceeding very well. I think the guidance we gave was that we would announce at the end of Q2. Obviously, we're heading pretty close to that. So I think I won't talk about numbers today given we're talking about something else, but we'll announce the final position on that shortly. But essentially happy with how that process has gone.

Roger, any views on how the Impact -- this is the deal between Impact and TotalEnergies. Any views or comments on its progress?

Actually, I've just had a text from Total just saying that the approval process is going according to plan and the final approval is in with the Ministry, but they do not see any issues. So we consider the final approval will be coming eminently. I can't give you an exact date, but Total don't see any issue.

Excellent. There's a question on the completion of the deal and whether there is a much of the risk refusal on this deal from any other entities?

So I mean, obviously, we're amalgamating something that we're already in being Prime both parties. So on one of the assets, Agbami OML, the unit covers OML 127. There is a preempt Prime at the asset level. But I think our consideration is that doesn't necessarily apply to this transaction because it's been very clear. It's a reorganization of the shareholder and it's an amalgamation, if you like. So it's a different situation.

Pascal, through this deal, is there any impact, are there any potential benefits in relation to the withholding, dividend withholding, hence, the Prime is currently exposed to in Nigeria?

I think the Prime structure is going to remain unchanged for the moment. So the withholding that is charged between Nigeria and the Netherlands is going to stay in place. And we -- there is no plan to change the existing structure from that perspective. So I expect the withholding tax will stay in place.

There was a nice comment here from Peter. Investor in Hawaii would like to thank AOC management team for outstanding presentation. I'm very jealous. Peter from Hawaii. Thank you, Peter. Appreciate the comment. There's a question on -- they're seeking further clarification on the lockbox mechanism. And do you expect dividends to continue to be distributed from Prime to its shareholders prior to completion of the deal?

Yes. So there is -- I mean, that's a relatively complex question to deal with, but yes. Look, effectively, there's an effective date on the transaction. And of course there will be a true-up whenever we complete so that we'll take account of dividends from Prime and any other cash that might leak either side out of the system. But it's a fairly conventional lockbox, and therefore, true-up mechanism. We don't believe it will be a material difference to anything we presented today in terms of the final outcome. I think the final point would be we have accounted for this potential 1 year completion period. And obviously, it becomes quicker. That's a simpler process, but it's a conventional approach there.

And there's a number of questions. I think this is quite -- we may have to give sort of details with reference to what is already available in the public domain. But there are a number of questions on how investors should think about the valuation of this proposed consolidation?

So I've got a couple of points here, again, without getting into too much detail, but it's going to be not a simple cash acquisition transaction with a headline dollar amount because of the nature of the amalgamation and rollout. So the way we think about this is the ratio, right? So we've got an exchange ratio of 65-35. And so the question becomes, how did you get there, right, because that's the value split, if you like, in the consolidation? So really important point is this was an NAV approach. So we looked at Africa Oil's NAV. So that's obviously Nigeria, Namibia cash or other exploration assets like Africa, for example. And on the Prime and BTG side, slightly simpler in that obviously pure Nigeria business, right? And then on top of that, there's some overheads. So the headline to take from that is in terms of the valuation is that the 65-35 accounts for the NAV as we've agreed on our other assets. So on Namibia, on the expiration assets and obviously on cash as well. So it is all our asset values are accounted for. Now of course, we're issuing equity. But by doing this in an NAV-to-NAV way, what we're really saying is it's not share price driven, it's driven by additions of equity on the back of the NAV-to-NAV calculation. So effectively what we're doing in NAV is a classic kind of public to private thing and taking out any discount in our share price to the NAV. So that makes us comfortable as AOC that we're getting value for our assets. And it's also comfortable I think to BTG in the sense that we're co-owners of the main asset, Nigeria, and they've done, Roger said earlier, some detailed work on our other assets to get comfortable with those. So that is really important. In terms of the philosophy, it's a NAV-to-NAV. The second way to -- second point really to think about is the numbers. So a lot of this is actually quite public. So the first point is on Nigeria where we through our Canadian regulatory disclosures have an independent valuation report out there, which you can go find and you can point me to it if you can't. But essentially that says, the last report, that AOC 50% share of Prime is worth depending on this kind of rate somewhere $700 million to $800 million. So you can take that public value for Nigeria. You can then go to one of the other big bricks, which is Namibia. And as we just talked about, we've partnered out there to buy out minority shareholders, which we're pursuing an implied gross value of impact and that offer was $805 million. So there's a number out there. For Impact, we own 31% today and we'll go up a little bit more in our Impact ownership of that offer so you can kind of get a read through of that number. And then our cash number is circa 200 I think last 10 results, just under. So -- and then we have some value for South Africa where we've got a carried interest, which we announced earlier this year. So the numbers are out there in that sense to look at what makes up our NAV, if you like, in public data, which is good. And obviously, Prime is an asset we shared, so you can see the numbers set on the both sides effectively. So you can see the philosophy, which is NAV-to-NAV. And then you can see the numbers that are in there. And when you triangulate that, I think you can see quite clearly that drives the 65-35 ratio in terms of an equity split of the pro forma.

Very well, folks. There's a follow-up question. Didn't give you a chance to take a breather. Yes, I've got an easy one. Well, maybe it's not an easy one, but a little bit light-hearted question here. Roger, would you consider making the new company [ Bull Oil Company ]?

Bull Oil? I'd tell you, it's actually really difficult to come up with a name. Actually, everything is taken, but I don't think we would call it Bull Oil, no. We'll obviously have to have a long discussion with lots of people around the table and probably take up the whole board meeting deciding out what we call it. But we've got some time to consider.

All right. Actually, I'm going to really ask the difficult ones, Pascal. I feel sorry about this. But there's a question from Carl. Would you consider giving a substantial issuer bid now?

Well, I think first we need to go through this completion process before we change the diameters of our share buyback for sure. So I think we just announced the deal. We want to make sure that we go through this completion process without any problem. I don't think it would be reasonable to trigger the specific buyback now.

Yes. Thank you for that. There's a number of questions on our positions in [indiscernible] Africa, which we are not going to read those questions out. We want to keep this presentation very much on this transformational deal, consolidation of Prime. And we really have nothing new to share on those investments. And going back to you, Oliver, there's a number of questions on the number of shares being issued to BTG. Is that going to change? Could you shed some colour on that mechanism?

So again, I'll try and give a simple answer to something that's relatively complex, of course. But now what we will do is, we've agreed -- we want to correct share count of Africa Oil today, if you like, the day of announcement and we will issue a set number of shares to BTG on that basis. So it's a fixed number of shares. And again, that's an important point if you think about the triangulation evaluation rates, fixed number of shares. We don't anticipate share count changing before completion in any significant way. But clearly, share counts can go up and down to small amounts. But that share count drives share issuance to BTG drives the 35-65 -- gives you the 30-65 ratio.

Bear with me as I screen some of these questions, most of these were answered. And there's a question actually from Bloomberg on saying whether there's any scope for perhaps additional dividend payments this year from Africa Oil? I think, again, it goes to...

I think it's relatively saying, yes, I'm sure that we are not going to make any significant changes in operational [indiscernible] So the promise is to not shift significantly.

I think there's a number of questions about when Africa Oil shareholders could expect to receive the new base dividend for the pro forma company? You've answered it on a couple of occassions. It's really post completion of the transition.

It's a dividend framework that commences for the pro forma company at completion. That's right.

Very good. Okay. Apologies for the delay on my part. And just as I said, a number of questions were lot of just are now repeated. Sandra, maybe we could check to see if there's any more interest on the telephone line, please?

[Operator Instructions] No questions on the telephone at this time.

Okay, there's one question here. Roger, obviously, you've delivered a very significant deal in line with your stated objective, which is consolidating your core assets and Oliver kind of gave updates on our offer to minorities. Is there scope for perhaps further consolidation in Impact?

There's always scope. We have no intention of going beyond, particularly in this period that we're going towards completion, going beyond the sum of money that we committed, which we announced at this time. So we were not going to go beyond that, but we will keep monitoring the situation in Impact. But don't expect us to suddenly do another transaction beyond the one had a maximum sum attached to it when we made the announcement of the acquisition of the -- potential acquisition of the minority interest.

And there's a question from Peter again. I'll tackle this. He is just seeking updates on operational -- technical updates. At this point in time, again, we want to keep the focus on this strategic transaction. We don't have any new updates at this point on Nigerian operational updates. But please do look forward to our next quarterly call. We will give a comprehensive operational updates on the infill drilling program, perhaps an update on Preowei. Very good. Well, I think most of these questions from the webcast have also been answered, we're getting to basically repeat ourselves. So just sending the mic back to you Roger for any final comments.

No, I don't have anything specific. But thank you all very much for joining us. As I stated at the start, we think that this is, and it's an oft misused word, a transformational transaction for Africa Oil taking us in to a totally new peer group of companies. So once again, thank you all very much for joining and we will sign off now.

Well, I still have one final [indiscernible] and special mention only one person who worked very hard, who is not here, Joanna Kay, our Chief Legal Officer. Hopefully she can get some sleep having got the documents. But on that note, operator, over to you to disconnect the call.

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