Africa Oil Corp. has proposed acquiring up to 8.0% of the issued shares in Impact Oil and Gas Limited from minority shareholders.
This is expected to lead to AOC holding 39.1% of Impact, as the former currently holds a 31.1% shareholding in the latter.
The move, announced on March 18, 2024, is the kind of transaction that any small, independent producer with some decent cash flow should pay some attention to.
The significance of the proposed buy is derived from Impact’s 19.5% stake in Blocks 2912 and 2913B, the two leases where the French major TOTAL has discovered the giant Venus field and adjoining accumulations.
With 39.1% holding in Impact, AOC will have around 7.8% of these two acreages. But we are getting ahead of ourselves.
TOTAL is in the process of concluding a farmin into Impact‘s stakes in these acreages, a transaction that, when concluded, will leave Impact with 9.5% of these two blocks.
The farm is awaiting the consent of Namibian authorities. Should that be consummated, and should AOC conclude the 8% acquisition, AOC will have around 3.9% of Blocks 2912 and 2913B.
TOTAL’s Venus accumulation (two billion barrels of oil equivalent recoverable reserves) has moved up the scale of the most likely-to-be-developed of all the several discoveries made in Southern Africa in the last four years.
AOC says that the offer it is making is at a price of $ 0.728 per Impact share, for a consideration of up to approximately $64 million, which implies a valuation of USD 805 million for 100% of the issued share capital of Impact.
“The share purchase is contingent upon finalising the farm-down transaction for Impact’s Namibian assets, as announced on January 10, 2024. Africa Oil Corp. is extending the offer to certain minority shareholders, with acceptance open until April 5, 2024. Africa Oil Corp. is not bound to acquire a specific number of shares in Impact.”
