• Africa Oil Corp (TSX:AOI) has posted their 2019 statement of reserves
  • Africa Oil owns 50 per cent of Prime Oil, which in turn owns stakes in several Nigerian oil fields
  • Proved reserves are up from the pro forma calculation of 49.2 million to 52.3 million barrels of oil equivalent
  • Oil reserves are up on pro-forma estimates, as market conditions continue to play havoc with energy companies supply curves
  • Africa Oil Corp (AOI) is holding steady at C$0.85 per share with a market cap of $400 million

Africa Oil Corp (TSX:AOI) has admitted they produced 3 million less barrels of oil last year than expected as intense market volatilty assailed energy companies.

Pro-forma calculations for the year had estimated some 49.2 million barrels of oil equivalent would be available to the company, but that number now sits at 52.3 mmboe.

This is almost certainly due to a vast oversupply of oil on the market, which has meant some of the worst oil prices on record.

The Vancouver company’s primary source of oil reserves is their 50 per cent stake in Prime Oil and Gas.

Prime’s primary assets are indirect interests in two deepwater Nigeria Oil fields.

The first asset is operated by Chevron affiliates and contains the producing Agbami oil field.

The second is operated by affiliates of TOTAL S.A and contains the producing Akpo and Egina fields.

Africa Oil CEO, Keith Hill, said that the current market conditions were some of the most challenging ever for the international oil and gas sector.

“Net to our 50 per cent shareholding, Prime has a modest 2020 cash flow from operations, before capital investment and financing cash flows.

“Furthermore, with 95 per cent of Prime’s 2020 oil production hedged at an average price of $66 per barrel, we are in a much stronger position relative to our peers to withstand the current turmoil,” he added.

The company has stated it is taking action to curb discretionary spending, in an effort to ride out the wave until they understand the “magnitude and duration” of the market forces being felt.

COVID-19 shutdowns and an oil price war between OPEC and Russia have virtually halved the share prices of North American listed energy producers.

Africa Oil was trading around C$1.65 at the start of year, it is nearly half that now.

Africa Oil Corp (AOI) is holding steady at $0.85 per share at 9:43 am EST.

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