AFRICA OIL CORP.  
REPORT TO  
SHAREHOLDERS  
FOR THE YEAR ENDED DECEMBER 31, 2024  
AFRICAOILCORP.COM  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
GLOSSARY  
means Africa Energy Corp. an international oil and gas exploration company that holds an effective  
4.9% participating interest in the Exploration Right for Block 11B/12B offshore South Africa.  
“Africa Energy”  
“Africa Oil”, “AOC”, or the  
“Company”  
means Africa Oil Corp.  
means the definitive agreement between the Company, BTG Oil & Gas and BTG Holding the entity  
which holds the interests of BTG Oil & Gas in Prime, to reorganize and consolidate their respective  
50:50 shareholdings in Prime.  
“Amalgamation  
Agreement”  
A
means all laws and regulations issued by authorities that have appropriate jurisdiction over the  
Company.  
“Applicable law”  
“Azinam”  
“Bcf”  
means Azinam Ltd.  
means billion cubic feet.  
“Blocks”  
means blocks 2912 and 2913B.  
means barrels of oil equivalent per day.  
means BTG Pactual Holding S.a.r.l.  
means BTG Pactual Oil & Gas S.a.r.l.  
“boepd”  
B
“BTG Holding”  
“BTG Oil & Gas”  
means Cash Generating Unit. A Cash Generating Unit is defined as assets that are grouped together  
into the smallest group of assets that generates cash inflows from continuing use that are largely  
independent of the cash inflows of other assets or groups of assets.  
“CGU”  
“Chevron”  
means Chevron Corp.  
“CIT”  
means Corporate Income Tax.  
C
“Concessions”, “PSC”  
or “Production Sharing  
Contract”  
means concessions, production sharing contracts and other similar agreements entered into with a  
host government providing for petroleum operations in a defined area and the division of petroleum  
production from the petroleum operations.  
means the $200.0 million facility dated October 20, 2022, with a three-year term, as amended from time  
to time.  
“Corporate Facility”  
“DD&A”  
means Depreciation, Depletion and Amortization.  
means Drill Stem Testing.  
D
“DST”  
“EPS”  
means Early Production System.  
means Earnings Before Interest, Taxes, Depreciation & Impairment, Amortization and Exploration  
Expenses.  
“EBITDAX”  
means Eco (Atlantic) Oil & Gas Ltd, an international oil and gas exploration company that holds working  
interests in four exploration Blocks offshore Namibia and operates one exploration Block offshore  
South Africa and is party with the Company in Block 3B/4B, offshore South Africa and holds working  
interest in two exploration Blocks offshore Guyana.  
“Eco”  
E
means production that is calculated using the economic interest methodology and includes cost oil,  
profit oil, tax oil and royalty oil.  
“Entitlement production”  
“ESG”  
means Environmental, Social and Governance.  
means Environmental, Social, Health and Safety.  
means Environmental and Social Impact Assessment.  
means Nigeria’s Federal Competition & Consumer Protection Commission.  
means Free Cash Flow.  
“ESHS”  
“ESIA”  
“FCCPC”  
“FCF”  
“FDP”  
means Field Development Plan.  
F
“FEED”  
means Front End Engineering and Design.  
means Final Investment Decision.  
“FID”  
“FPSO”  
means Floating Production Storage and Offloading.  
means Greenhouse Gas.  
“GHG”  
G
“IFRS Accounting  
Standards”  
means International Financial Reporting Standards as issued by the International Accounting Standards  
Board.  
means Impact Oil and Gas Ltd, a privately owned exploration company with a strategic focus on large  
scale, mid to deep water plays of sufficient materiality to be of interest to major companies. Impact has  
an asset base across the offshore margins of Southern and West Africa.  
I
“Impact”  
PAGE 2  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
“JV”  
means Joint Venture.  
J
“Kenya entities”  
means Centric Energy Kenya Limited, Africa Oil Kenya B.V Branch and Africa Oil Turkana Limited.  
means loss time injury.  
K
“LTI”  
L
“LTIP”  
means Long Term Incentive Plan.  
“Mcf”  
means million cubic feet.  
“MD&A”  
means Management’s Discussion and Analysis.  
means one thousand and one million barrels, respectively.  
means thousands of barrels of oil equivalent and millions of barrels of oil equivalent, respectively.  
means Normal Course Issuer Bid.  
M
“Mbbl” and “MMbbl”  
“Mboe” and “MMBoe”  
“NCIB”  
means National Instrument 51-101 — Standards of Disclosure for Oil and Gas Activities of the Canadian  
Securities Administrators and the companion policies and forms thereto, as amended from time to time.  
means National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings  
and the companion policies and forms thereto, as amended from time to time.  
“NI 51-101”  
N
“NI 52-109”  
“NUPRC”  
“OML”  
means Nigerian Upstream Petroleum Regulatory Commission.  
means Oil Mining Lease.  
means the oil mining lease on Block 127, offshore Nigeria which was converted to a petroleum mining  
lease under the new PIA regime in Q3 2023 with effective date 1 March 2023  
means the oil mining lease on Block 130, offshore Nigeria which was converted to three new petroleum  
mining leases and one petroleum prospecting license under the new PIA regime in Q2 2023  
“OML 127”  
O
“OML 130”  
“Petrovida”  
“PIA”  
means PetroVida Holding B.V.  
means Petroleum Industry Act.  
“PML”  
means Petroleum Mining License.  
“PML 2”  
“PML 3”  
“PML 4”  
“PML 52”  
means the Petroleum Mining License containing the Akpo field.  
means the Petroleum Mining License containing the Egina field.  
means the Petroleum Mining License containing the Preowei field.  
means the Petroleum Mining License containing the Agbami field.  
means Petroleum Prospecting License.  
“PPL”  
P
“PPL 261”  
“PPT”  
means the Petroleum Prospecting License containing the South Egina prospect.  
means Profit Petroleum Tax.  
“Prime” or “Prime Oil &  
Gas Coöperatief U.A.”  
means Prime Oil & Gas Coöperatief U.A., previously known as Prime Oil & Gas B.V., a company that  
holds interests in deepwater Nigeria production and development assets.  
“Proposed  
Reorganization”  
means the proposed reorganization and consolidation of the 50:50 shareholdings of the Company and  
BTG Holding in Prime announced by the Company on June 24, 2024.  
“PSA”  
means Petroleum Sharing Agreement.  
means Performance Share Unit.  
“PSU”  
“PXF Facility”  
“RBL”  
means Pre-Export Finance Facility.  
means Reserves Based Lending.  
means Restricted Share Unit.  
R
“RSU”  
“spud” or “spudded”  
means the initial drilling for an oil well.  
means TotalEnergies SE and subsidiaries.  
means Toronto Stock Exchange.  
means United States.  
S
“TotalEnergies”  
T
“TSX”  
“US”  
U
“VAT”  
means Value-added tax.  
V
“WI”  
means working interest.  
W
“WI production”  
means production based on the percentage of working interest owned.  
PAGE 3  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
MANAGEMENT’S DISCUSSION AND ANALYSIS  
The Management’s Discussion and Analysis (“MD&A”) focuses on significant factors that have affected the Company during the year  
ended December 31, 2024, and such factors that may affect its future performance. To better understand the MD&A, it should be read  
in conjunction with the Company’s audited consolidated financial statements for the years ended December 31, 2024, and 2023, and  
related notes thereto.  
The financial information in this MD&A is derived from the Company’s audited consolidated financial statements which have been  
prepared in US dollars, in accordance with International Financial Reporting Standards as issued by the International Accounting  
Standards Board (“IFRS Accounting Standards”).  
This MD&A was reviewed and approved by the Board of Directors. The effective date of this MD&A is February 27, 2025.  
Additional information about the Company and its business activities is available on the Company’s website at www.africaoilcorp.com  
and on SEDAR at www.sedar.com.  
PROFILE AND STRATEGY  
Africa Oil is a Canadian oil and gas company with producing and development assets in deep-water offshore Nigeria. The Company  
also has a portfolio of development and exploration assets in West and South of Africa.  
The Company’s Common Shares are listed on the Toronto Stock Exchange in Canada and the Nasdaq Stockholm Exchange in Sweden,  
under the symbol ‘AOI’.  
Africa Oil’s long-term objective is to implement a steady and predictable total shareholder returns model underpinned by an enhanced  
base dividend policy, whilst delivering organic growth from its core assets and pursuing disciplined inorganic growth opportunities  
focused on producing assets. This plan is supported by the Company’s high netback production assets in Nigeria that are included in its  
interests in PMLs 2, 3, 4 (previously part of OML 130) and PML 52 (previously part of OML 127). These PMLs provide the Company with  
a long-life cash flowing asset base, to support its business objectives over the long term, and also present development opportunities  
for supporting future production.  
The Company’s other core assets are comprised of its Orange Basin opportunity set including Blocks 2912 and 2913B offshore Namibia  
and Block 3B/4B, offshore South Africa, as well as Equatorial Guinean exploration blocks (EG-18 and EG-31).  
The Company is a unique investment opportunity, amongst its publicly-listed independent E&P peer group, for its Orange Basin  
opportunity set that includes an effective interest in the Venus light oil and associated gas discovery offshore Namibia. The Venus  
discovery, understood to be the largest oil discovery globally in 2022, has partially de-risked a new petroleum province in the Orange  
Basin that has significant prospectivity.  
HIGHLIGHTS AND OUTLOOK  
Full-Year 2024, Q4 2024 and Post Period Highlights  
•
The completion of the Proposed Reorganization is expected on or about March 7, 2025, a strategic milestone to double the  
Company’s reserves and production and allowing it to take direct control of Prime’s cash flows and balance sheet.  
•
The Proposed Reorganization will position the Company to significantly increase its annual dividend distribution to at least $100  
million or approximately $0.15 per share (assuming pro-forma issued and outstanding share count of ~675 million), which is  
approximately 3x the current annual base distribution of $0.05 per share, subject to customary board approval and consents.  
•
The Company intends to declare the first quarterly dividend of $25 million or approximately $0.037 per share on the closing of the  
Proposed Reorganisation, subject to customary board approval and consents.  
•
•
During 2024, the Company returned $67.9 million to its shareholders through the base dividend policy and share buybacks.  
During 2024, the Company materially increased its shareholding in Impact to 39.5% from 31.1% at a total cost of approximately  
$88.6 million, enhancing the Company’s influence and control over a core strategic asset and value driver in the Namibian Orange  
Basin, containing the Venus light oil field.  
•
•
•
Significant year-end 2024 combined Africa Oil and Prime cash balance of $460.9 million.  
Post year-end 2024 received a $31.6 million dividend from Impact.  
Prime’s highlights and results net to Africa Oil’s 50% shareholding:  
»
Recorded full-year average daily WI production of approximately 17,000 barrels of oil equivalent per day (“boepd”) and average  
daily entitlement production of approximately 19,400 boepd. These compare with mid-range 2024 Management Guidance of 17,500  
boepd and 19,500 boepd for WI and entitlement production, respectively.  
»
»
Recorded full-year 2024 cashflow from operations of $267.8 million which compares with mid-range 2024 Management Guidance of  
$275.0 million.  
Prime’s cash position of $199.7 million and debt balance of $375.0 million resulting in a Prime net debt position of $175.3 million at  
December 31, 2024.  
PAGE 4  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
HIGHLIGHTS AND OUTLOOK - CONTINUED  
FINANCIAL SUMMARY (1)  
Three months ended  
Years ended  
December 31,  
December 31,  
December 31,  
2024  
December 31,  
2023  
Unit  
2024  
2023  
AOC highlights  
Net income/ (loss)  
$’m  
6.2  
(88.8)  
(279.1)  
87.1  
Net income/ (loss) per share – basic  
$/ share  
0.02  
(0.19)  
(0.62)  
0.19  
Cash position  
$’m  
61.4  
232.0  
61.4  
232.0  
Prime highlights, net to AOC’s 50% shareholding  
WI production  
boepd  
17,200  
19,500  
18,500  
21,700  
17,000  
19,400  
19,800  
22,400  
Entitlement production  
boepd  
$’m  
Cash flow from operations (2)  
EBITDAX  
52.9  
242.3  
8.8  
64.1  
112.3  
16.7  
267.8  
519.5  
197.2  
175.3  
300.4  
460.3  
149.1  
298.9  
$’m  
Free Cash Flow  
Net debt  
$’m  
$’m  
175.3  
298.9  
(1) The table includes non-GAAP measures. Definitions and reconciliations to these non-GAAP measures are provided on pages 13-16.  
(2) Cash flow from operations before working capital adjustments and interest payments.  
OUTLOOK  
Consolidation of the Ownership in Prime  
On June 23, 2024, the Company entered into a definitive agreement (the “Amalgamation Agreement”) with BTG Pactual Oil & Gas  
S.a.r.l. (“BTG Oil & Gas”) and BTG Pactual Holding S.a.r.l. (“BTG Holding”), the entity which holds the interests of BTG Oil & Gas in Prime,  
to reorganize and consolidate their respective 50:50 shareholdings in Prime (the “Proposed Reorganization”). On completion of the  
Proposed Reorganization, which is expected on or about March 7, 2025, Africa Oil will hold 100% of Prime with BTG Oil & Gas receiving  
239,828,655 newly issued common shares in Africa Oil, representing approximately 35.5% of the outstanding share capital of the  
enlarged Africa Oil as of February 26, 2025.  
The Proposed Reorganization provides the enlarged Africa Oil with a number of strategic and financial benefits, including:  
•
100% increase in working interest Proved plus Probable (“2P”) reserves and production on a pro-forma basis, for BTG receiving  
approximately 35.5% of the shares in the enlarged Africa Oil.  
•
•
Increased scale and balance sheet strength along with the potential to benefit from lower borrowing costs.  
The introduction of a long-term cornerstone shareholder that is strategically aligned with Africa Oil and committed to growing a  
sustainable upstream oil and gas business, will, after completion, deliver superior value creation and shareholder capital returns.  
•
•
•
BTG Oil & Gas’ support has the potential to increase Africa Oil’s access to business opportunities and potentially unlock new sources  
of growth capital, while complementing Africa Oil’s disciplined capital allocation and financial decision making through BTG Oil &  
Gas’ participation on the Board.  
Enabling direct control of Prime’s cash flows and balance sheet through the consolidation of Africa Oil and BTG Oil & Gas’ respective  
interests in Prime versus the equity accounting method that is followed by Africa Oil today for its investment in Prime. This in turn will  
facilitate greater transparency and visibility of Prime’s financial performance for Africa Oil’s shareholders.  
Significant scope to streamline the business processes and decision making to achieve cost savings.  
PAGE 5  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
HIGHLIGHTS AND OUTLOOK - CONTINUED  
The enlarged Africa Oil is expected to have significant scale with robust long-term free cash flows and a low leverage balance sheet,  
driven by large-scale and high netback assets in deepwater Nigeria.This will be complemented by funded development and exploration  
projects in the prolific Orange Basin.  
These pillars will provide a strong platform for the enlarged Africa Oil to implement steady and predictable shareholder returns  
underpinned by an enhanced base dividend policy, whilst delivering organic growth from its core assets and pursuing inorganic  
growth opportunities supported by a long-term and committed strategic shareholder. The enlarged Africa Oil’s objective is to deliver a  
superior investment case relative to its peer group through a combination of financial discipline, sustainable total shareholder returns,  
and funded growth.  
Namibia Orange Basin Appraisal and Exploration Campaign  
Block 2913B, offshore Namibia, contains the Venus light oil field, discovered by the Venus-1X well, drilled in 2022 and subsequently  
successfully appraised with three further wells and four drill stem tests. The Joint Venture is continuing to progress the proposed  
development of the Venus Field, with development studies ongoing. The Venus Field is expected to be the first development in Block  
2913B, producing 150kbopd (gross field) of ~45° API oil, with final investment decision expected by the end of H1 2026.  
During 2024, two additional 3D seismic acquisition programs were completed to facilitate further exploration over the southern and  
northern parts of the Blocks. This has resulted in most of the licensed area now being covered by 3D seismic. This data is currently  
being processed and interpreted and will help further evaluate prospects and leads in the far northern and southern parts of the Blocks.  
On February 3, 2025, the Deepsea Mira drilling rig spud the Marula-1X exploration well within the southern part of Block 2913B. This  
well will target Albian-aged sandstones, within the Marula fan complex and has the potential to unlock further exploration targets  
across the south, which is an area lying at the heart of the prolific Kudu source-rock kitchen. Deepsea Mira is also expected to drill the  
Olympe prospect, targeting Albian sands within a structural closure on Block 2912.  
On January 10, 2024, the Company announced a strategic farm down agreement between its investee company Impact Oil and Gas  
Limited (“Impact”), and TotalEnergies, that allows the Company to continue its participation in the world class Venus oil development  
project, and the follow-on exploration campaign on the Blocks with no upfront costs. This transaction frees up the Company’s balance  
sheet for the pursuit of other growth opportunities and shareholder capital returns. As announced on November 1, 2024, this farm  
down deal closed following the receipt of the final approval from Government of Namibia.  
At the date hereof, AOC has an interest in this program through its 39.5% shareholding in Impact, which in turn has a 9.5% WI in each  
of Block 2913B (PEL 56) and Block 2912 (PEL 91).  
Nigeria  
Agbami field performed in line with expectations throughout 2024. Planned maintenance on one of the three compressors commenced  
at the end of Q4 2024 and continued into Q1 2025. The remaining two compressors will also be overhauled over the coming 2 years  
to maintain high equipment uptime. Processing of the 4D-M3 seismic acquired in Q3 2024 is underway and other preparations for  
the next drilling campaign, scheduled for 2026, are continuing as planned. A planned full-field shut down for maintenance activities is  
scheduled for Q4 2025.  
The Egina field completed the year above the production plan thanks to its high production efficiency and successful well interventions  
during Q3 2024 and Q4 2024. Well planning for a 2025 drilling program based on the 4D-M2 acquired in Q2 2024 is ongoing with  
drilling commencing in Q1 2025.  
The Akpo field ended the year with production rates in line with those at the start of 2024, primarily due to the Akpo West wells  
performing above expectation and the infill well on Akpo main offsetting natural decline in the field. A total of 3 new producers and 1  
new injector were completed and tied back to the Akpo FPSO in 2024. Overall, for 2024, production was below the production plan  
due to drilling delays pushing the expected production gains from drilling to the second half of the year. Well planning for additional  
infill drilling, based on the 4D-M4 seismic acquired in Q1 2024, and potential near field exploration are underway.  
The 2023 and 2024 Egina and Akpo drilling campaign was paused in November 2024 to allow time to mature drilling opportunities  
from the 2024 seismic acquisition campaigns. The 2025 campaign kicked off in January 2025 as planned.  
Progress on phase 2 of the Preowei Field front end engineering design (“FEED”) is now subject to further cost optimization and the  
results of ongoing field development studies on the basis of the 4D baseline seismic acquisition acquired in Q2 2024. These work  
streams are aimed at supporting an FID decision on the project and enabling Engineering, Procurement, Construction and Installation  
(“EPCI”).  
PAGE 6  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
HIGHLIGHTS AND OUTLOOK - CONTINUED  
South Africa Orange Basin, Block 3B/4B  
Block 3B/4B lies to the southeast and on trend with a number of Orange Basin oil discoveries including Venus. There is approximately  
14,000 km of 2D seismic and 10,800 km2 of 3D seismic over the block, identifying a large opportunity set of exploration prospects.  
On August 28, 2024, the Company announced the completion of the farm down agreement with TotalEnergies and QatarEnergy for  
the Orange Basin Block 3B/4B. The Company retained a 17.0% interest in Block 3B/4B and transferred the operatorship of the block to  
TotalEnergies, for a maximum consideration of $46.8 million, including the exploration carry of its retained interest.  
On January 10, 2025, the Company completed a separate transaction with Azinam, a subsidiary of Eco for the transfer of a 1.0% (one  
percent) interest to the Company, increasing the group’s direct interest in Block 3B/4B to 18.0%. The Company will have the benefit of  
exploration carry for the additional 1.0% interest assigned to it by Azinam.  
An Environmental Authorization for exploration activities (drilling of up to 5 exploration wells) was granted by the Department of  
Mineral Resources and Energy for the Republic of South Africa on September 16, 2024. The legislative notification and appeals process  
is in progress with the relevant regulatory agencies.  
Equatorial Guinea  
On December 23, 2024, the Company was granted a 1 year extension to the first exploration sub period on both two exploration  
licenses (EG-18 and EG-31), offshore Equatorial Guinea. The Company also received approval of the first amendment to the EG-31  
Production Sharing Contract (PSC). The amendment expanded the block boundary to ensure that the full extent of the two main  
exploration prospects were captured fully within the block boundary.  
The Company is continuing with the farm down process for Blocks EG-18 and EG-31 as well as subsurface studies to enhance the  
definition of multiple targets already identified. The Company holds an operated WI of 80.0% in each of Blocks EG-18 and EG-31.  
SUMMARY OF 2024 MANAGEMENT GUIDANCE AND ACTUALS  
Prime, net to AOC’s 50% shareholding:  
WI production (boepd) (1)  
Entitlement production (boepd) (1)  
Cash flow from operations (million) (2, 3)  
Capital investment (million)  
2024 Actuals  
17,000  
2024 Updated Guidance  
16,500 – 18,500  
18,000 – 21,000  
$260.0 - $290.0  
19,400  
$267.8  
$76.3  
$80.0 - $110.0  
(1) All of the Company’s production is contributed solely by its shareholding in Prime. Entitlement production is calculated using the economic  
interest methodology and includes cost oil, profit oil, tax oil and royalty oil and is different from WI production that is calculated based on  
project volumes multiplied by Prime’s effective WI.  
(2) Cash flow from operations before working capital adjustments and interest payments.  
(3) Prime does not pay dividends to its shareholders, including the Company, on a fixed pre-determined schedule. Previous number of  
dividends and their amounts should not be taken as a guide for future dividends to be received by the Company. Any dividends received by  
the Company from Prime’s operating cash flows will be subject to Prime’s capital investment and financing cashflows, including payments of  
Prime’s RBL principal amortization, which are subject to semi-annual RBL redeterminations, and Prime’s minimum cash on hand requirements.  
Africa Oil will announce its 2025 Management Guidance on the closing of the Proposed Reorganization, which is expected on or about  
March 7, 2025.  
PAGE 7  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
THE COMPANY’S SHAREHOLDING AND WORKING  
INTERESTS  
The Company’s material interests and material exploration partnership interests as at December 31, 2024, are summarized in the following  
table:  
Africa Oil’s Shareholding in Prime Oil & Gas Coöperatief U.A. (50%) (1)  
Country  
Concession  
License renewal  
Working Interests  
Prime  
Chevron Corporation  
Famfa Oil  
8%  
32%  
60% (carried)  
PML 52  
November 24, 2044(2)  
NIGERIA  
Prime  
TotalEnergies  
SAPETRO  
32%  
48%  
20% (carried)  
PML 2, 3, 4 and  
PPL 261 – PSA  
May 24, 2043(2)  
Africa Oil’s Shareholding in Impact Oil & Gas Limited (39.5%)  
Country  
Concession  
License renewal  
Working Interests  
Impact  
9.5%  
TotalEnergies  
QatarEnergy  
NAMCOR  
50.5%  
30%  
10% (carried)  
PEL 56 (Block 2913B)  
April 1, 2025  
NAMIBIA  
Impact  
9.5%  
TotalEnergies  
QatarEnergy  
NAMCOR  
47.2%  
28.3%  
15% (carried)  
PEL 91 (Block 2912)  
October 1, 2027  
Africa Oil’s Direct Working Interests (3,4)  
Country  
Concession  
License renewal  
Working Interests  
AOC  
17% (6)  
TotalEnergies (Operator) 33%  
SOUTH AFRICA  
Block 3B/4B  
October 26, 2024 (5)  
QatarEnergy  
Azinam  
24%  
5.25%  
19.75%  
Ricocure (Pty) Ltd  
EG-18  
EG-31  
AOC (Operator)  
GEPetrol  
80%  
20%  
EQUATORIAL  
GUINEA  
March 1, 2026  
(1) At December 31, 2024, the Company had a 50% shareholding in Prime. On completion of the Proposed Reorganization, the Company will hold  
a 100% interest in Prime. Completion of the Proposed Reorganization is targeted to occur on or about March 7, 2025.  
(2) Renewal of the rights under OML 130 resulted in the award of three new petroleum mining leases and one petroleum prospecting license.  
These cover some of the areas previously covered by OML 130, with some of the areas also relinquished. These are PML 2 (Akpo field), PML  
3 (Egina), PML 4 (Preowei) and PPL 261 (South Egina). 50% of the production (currently from PMLs 2 and 3, future production from PML 4 and  
potential future production from PPL 261) is covered by a PSA framework, in which Prime owns a 32% WI. Prime’s net WI in these assets is  
therefore 16%. Conversion of OML 127 to the new PIA earlier this year also resulted in the new designation of PML 52 for the license area that  
contains part of the Agbami oil field.  
(3) Net WI are subject to back-in rights or carried WI, if any, of the respective governments or national oil companies of the host governments.  
(4) The Company has agreed with its JV parties its withdrawal from the entirety of the production sharing contracts and joint operating agreements  
for Blocks 10BB, 13T and 10BA in Kenya with effect on and from June 30, 2023. The Company is waiting for government consent to complete  
its withdrawal and the transfer of rights and future obligations.  
(5) The operator has submitted an application for license renewal. This is currently awaiting Government approval.  
(6) As at December 31, 2024, the Company held a non-operated WI of 17%. On January 13, 2025, the Company announced the completion of  
the agreement with Eco for the acquisition of an additional 1% from Azinam, as a result of which the Company increased its interest to 18%.  
Information on the Company’s equity interests in Africa Energy, Eco and Impact is included in ‘Equity Investments in Associates’ on pages  
18-19.  
PAGE 8  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
BUSINESS UPDATE  
Macroeconomic conditions  
Q4 2024 was the most subdued quarterly period during 2024 for international oil price decks. Average Bloomberg Dated Brent price of  
$74.7/bbl compared to an average of $80.3/bbl for Q3 2024, and full-year 2024 average of $80.7/bbl. During Q4 2024 Bloomberg Date  
Brent traded at a high of $81.2/bbl and a low of $71.3/bbl.  
Full-year 2024 average price of $80.7/bbl was approximately 2% lower than full-year 2023 average of $82.6/bbl and approximately 5%  
lower than the preceding 3-year average of $84.8/bbl.  
The overall price weakness during 2024 was driven by the negative outlook for Chinese economic activity, above-average OPEC spare  
capacity and the outlook of growing supplies from non-OPEC countries. These factors were countered by geopolitical tension in the  
Middle East and concerns over a widening conflict in the region.  
The conflict in the Middle East impacted maritime traffic through the Red Sea, including the flow of oil tankers, during 2024 and highlighted  
the risks to oil supplies from the region, which remains a key production area for the global markets. These challenges reiterated the  
strategic advantage of West African oil production for the Atlantic basin markets.  
Nigeria economic environment  
Nigeria’s year-on-year headline inflation rate reached a new record of 34.8% in December 2024 driven by higher transport costs and  
consumer spending during the holiday season. This followed an upward trend in inflationary pressure from August 2024, after a brief  
reversal with inflation falling from 34.2% in June to 32.2% in August. Inflationary pressures, exacerbated by the devaluation of the country’s  
currency, Naira, have resulted in significant economic hardship leading to social unrest in the country. The Central Bank of Nigeria raised  
interest rates six times last year in an attempt to control inflation, and the government of Nigeria expects headline inflation to drop to 15%  
during 2025, in part helped by lower imports of petroleum products. However, the outlook for Nigerian economic activity, productivity  
gains and in turn inflationary direction remains highly uncertain.  
Prime’s business in Nigeria has limited exposure to these local economic developments with its revenues denominated in US Dollars.  
Also, considering the location of the producing assets in deepwater, offshore Nigeria, Prime’s operations are shielded from the security  
challenges faced onshore Nigeria.  
SHAREHOLDER RETURNS  
On completion of the Proposed Reorganisation, subject to the customary consents and approvals, including Africa Oil’s board approval,  
the Company plans to implement an enlarged annual base dividend of $100 million, to be distributed to its shareholders on a quarterly  
basis. The Company also intends to distribute 50% free cashflows net of the base dividend of $100 million in supplementary special  
dividends and/or share buybacks, subject to the customary consents and approvals.  
On February 27, 2025, the Company announced its intention to declare the first quarterly dividend of $25 million or approximately $0.037  
per share, on the closing of the Proposed Reorganisation. This and other future dividend distributions are subject to customary board  
approval and consents.  
During 2024 the Company returned $67.9 million to shareholders through its base dividend policy and share buybacks executed under  
its Normal Course Issuer Bid (“NCIB”).  
The Company distributed two semi-annual dividends for a total of $0.05 per share (approximately $22.6 million) during 2024. The  
Company views the 2024 distributions to have been prudent with due consideration for its capital allocation options and the priority of  
maintaining a strong balance sheet in a range of market scenarios.  
The Company repurchased its shares under a NCIB program that was launched on December 6, 2023, and which expired on December  
5, 2024, as well as a new program that was launched on December 6, 2024. In total, during 2024, the Company repurchased a total of  
26,519,932 at an average price of C$2.34 per share with an aggregate amount of $45.3 million.  
During Q4 2024, the Company repurchased a total of 4,587,700 shares at an average price of C$1.90 per share.  
Pursuant to the current NCIB (launched on December 6, 2024) Africa Oil is authorized to repurchase through the facilities of the TSX,  
Nasdaq Stockholm and/or alternative Canadian trading systems, as and when considered advisable by Africa Oil, up to 18,362,364  
Common Shares of the Company, which represented 5% of its “public float” of 367,247,289 Common Shares as at November 22, 2024.  
Purchases of Common Shares may occur over a period of up to twelve months commencing December 6, 2024, and ending on the earlier  
of December 5, 2025, the date on which the Company has purchased the maximum number of Common Shares permitted under the  
NCIB, and the date on which the NCIB is terminated by Africa Oil. There cannot be any assurances as to the number of Common Shares  
that will ultimately be acquired by the Company. Any Common Shares purchased by Africa Oil under the NCIB will be cancelled.  
In Canada, Bill C-59 sets out taxes on repurchases of equity, with a 2% tax applying to the net value of shares repurchased by any  
corporation resident in Canada whose shares are listed on a designated stock exchange. Bill C-59, was enacted on June 20, 2024, and the  
Company has accrued for the tax payable on shares purchased during 2024.  
PAGE 9  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
BUSINESS UPDATE - CONTINUED  
EQUITY INVESTMENT IN PRIME – NIGERIA  
The Company’s 50% equity interest in Prime as at December 31, 2024, is accounted for as an investment in joint venture under the equity  
method on the Balance Sheet. During the period the Company recorded a 50% share of Prime’s net income or loss as well as a 50% share  
of its other comprehensive income or loss in the period in the Consolidated Statement of Net (Loss)/ Income and Comprehensive (Loss)/  
Income. Dividends received are disclosed as a cash flow from investing activities in the Consolidated Statement of Cash Flows.  
The main assets of Prime are an indirect 8% WI in PML 52 and an indirect 16% WI in PMLs 2, 3 and 4 as well as PPL 261. PML 52 is  
operated by affiliates of Chevron and covers part of the producing Agbami field. PMLs 2, 3 and 4 and PPL 261 are operated by affiliates of  
TotalEnergies and contain the producing Akpo and Egina fields. The three fields in these PMLs are located over 100 km offshore Nigeria.  
All three fields have high quality reservoirs and produce light to medium sweet crude oil through FPSO facilities. Akpo and Egina also  
export associated gas which feeds into the Nigerian liquified natural gas plant, whilst Agbami associated gas is mostly reinjected.  
All amounts included in the narrative discussions below are net to the Company’s 50% shareholding in Prime as at December 31, 2024,  
unless otherwise noted.  
Production and Operations  
Production Metrics – rounded  
Three months ended  
Years ended  
December 31,  
December 31,  
December 31,  
December 31,  
Unit  
2024  
2023  
2024  
2023  
Total gross field production  
boepd  
270,300  
296,700  
273,600  
314,200  
Net to AOC’s 50% shareholding:  
Average daily WI production (1)  
Average daily entitlement production  
Oil volumes sold  
boepd  
boepd  
MMbbl  
bcf  
17,200  
19,500  
-
18,500  
21,700  
2.0  
17,000  
19,400  
4.5  
19,800  
22,400  
6.4  
Gas volumes sold  
2.5  
2.4  
8.7  
9.5  
Oil/gas percentage split  
%
74%/26%  
80%/20%  
77%/23%  
81%/19%  
(1) Production allocation occurs periodically and can result in a change in production numbers previously reported.  
The total gross field production in Q4 2024 was lower than Q4 2023, primarily due to the expected natural reservoir decline across all  
assets.  
The total gross field production in 2024 was lower than 2023 primarily due to a planned maintenance shutdown at the Akpo FPSO and  
the expected natural reservoir decline across all assets. The Agbami and Egina fields production was in line with the plan for 2024. The  
Akpo field underwent a full field shutdown in mid-March to perform maintenance on equipment with production resuming in mid-April.  
New wells drilled and completed in Akpo continue to exceed expectations and assist offsetting the natural production decline of the field.  
Entitlement production is calculated using the economic interest methodology and includes cost oil, profit oil, tax oil and royalty oil. It  
differs from WI production which is calculated based on field volumes multiplied by Prime’s effective WI in each Block. The cargoes lifted  
by Prime and described below represent Prime’s share of cost oil, profit oil and included in the comparative period part of income tax oil  
in relation to the period prior to conversion to the new PIA regime. The remaining part of income tax oil and royalties was either lifted and  
sold by the operator or paid in cash, to settle the tax and royalty obligations to the Nigerian state. From August 2023, Prime has been lifting  
its own entitlement production and paying its tax in cash. Aggregate oil equivalent production data comprises of light and medium crude  
oil and conventional natural gas production net to Prime’s WI in the Agbami, Akpo and Egina fields. These production rates only include  
sold gas volumes and not those volumes used for fuel, reinjected or flared.  
In Q4 2024, Prime was allocated no oil liftings. Cargos initially scheduled for Q4 2024 have been pushed into Q1 2025 resulting in a large  
underlift position at the end of Q4 2024. Up to 5 cargos are scheduled to be lifted in Q1 2025 unwinding this large underlift position.  
In Q4 2023, Prime was allocated 4 oil liftings with total sales volume of approximately 3.9 million barrels or 2.0 million barrels net to the  
Company’s 50% shareholding at an average realized oil price of $86.6/bbl.  
In 2024, Prime was allocated 9 oil liftings with total sales volume of approximately 9.0 million barrels or 4.5 million barrels net to the  
Company’s 50% shareholding at an average realized oil price of $84.6/bbl. In 2023, Prime was allocated 13 oil liftings with a total sales  
volume of approximately 12.9 million barrels or 6.4 million barrels net to the Company’s 50% shareholding at an average realized oil price  
of $84.6/bbl.  
PAGE 10  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
BUSINESS UPDATE - CONTINUED  
Financial  
Prime’s financial information is presented in note 5 of the financial statements on a 100% basis, with a reconciliation to the Company’s  
50% share of Prime’s net assets and net income. In Q4 2024 and full year 2024, the result from the 50% investment in Prime was an  
income of $159.3 million and $226.0 million respectively (Q4 2023 and full year 2023 – loss of $79.3 million and a profit of $228.0 million  
respectively). As at December 31, 2024, the Company’s investment in Prime was $328.4 million (as at December 31, 2023 - $572.5 million)  
following the recognition of a non-cash impairment charge of $436.7 million as a result of the significant decrease in the Africa Oil share  
price between June 24, 2024, when the Company announced the Proposed Reorganization and December 31, 2024. The fair value of the  
existing 50% shareholding in Prime decreased as the fair value considers the number of Africa Oil shares that were agreed in relation to  
the purchase of the additional interest in Prime and the trading value of Africa Oil shares as this is an observable fair value input under  
IFRS Accounting Standards. As at December 31, 2024, the fair value of the Company’s existing shareholding in Prime was calculated to  
be $328.4 million based on the Africa Oil share price of CAD 1.97 as of December 31, 2024, and the USD/CAD exchange rate of 1.4384  
as of December 31, 2024.  
All amounts presented and discussed below are net to AOC’s 50% shareholding in Prime (unless otherwise stated) to reflect AOC’s 50%  
shareholding in Prime.  
Financial Metrics(1)  
Three months ended  
Years ended  
December 31,  
December 31,  
December 31,  
December 31,  
Net to AOC’s 50% shareholding:  
Unit  
2024  
2023  
2024  
2023  
Total revenues  
$’m  
2.2  
173.6  
391.4  
581.1  
Cost of Sales (2)  
Gross profit  
Opex/boe (3,4)  
$’m  
$’m  
(34.0)  
36.2  
9.9  
103.1  
70.5  
12.0  
208.6  
182.8  
10.3  
299.0  
282.1  
9.2  
$/boe  
Cash flow from operations before working  
capital  
$’m  
$’m  
52.9  
29.3  
64.1  
43.9  
267.8  
273.6  
300.4  
237.9  
Cash flow from operations  
Free cash flow  
Free cash flow/boe (4)  
$’m  
8.8  
4.4  
16.7  
8.4  
197.2  
27.8  
149.1  
18.2  
$/boe  
Tax  
Capex (5)  
$’m  
$’m  
$’m  
23.3  
20.5  
11.0  
5.9  
27.2  
50.0  
60.3  
76.3  
36.0  
(122.7)  
88.8  
Dividends paid  
175.0  
Net Debt  
$’m  
$’m  
175.3  
242.3  
0.3  
298.9  
112.3  
0.7  
175.3  
519.5  
0.3  
298.9  
460.3  
0.7  
EBITDAX  
Net Debt/EBITDAX (6)  
ratio  
AOC Net Cash/ (Debt) inclusive of  
50% Prime Net Debt  
$’m  
(113.9)  
(66.9)  
(113.9)  
(66.9)  
(1) The table includes non-GAAP measures. Definitions and reconciliations to these non-GAAP measures are provided on pages 13-16  
(2) Given the nature of Prime’s operations in terms of oil cargo liftings and the variability in their frequency from one quarter to next, the non-cash  
accounting treatment of underlift/overlift and the timing between recording revenues and receipts of sales cash, leads to high variability in  
Prime’s quarterly financial metrics. Please refer to the commentary in the rest of this section for the specific details of this period’s changes  
relative to the corresponding historical period.  
(3) Opex represents production costs presented on Prime’s Statement of Net Income and Other Comprehensive Income in note 5 to the  
financial statements.  
(4) Boe is calculated on an entitlement basis.  
(5) Full year 2024 amount includes the PML 52 license renewal fee and 2023 amount includes the PMLs 2, 3 and 4 and PPL 261 license renewal  
fee both of which have been capitalized to oil and gas interests.  
(6) Calculated on a 12-month rolling basis until December 31, 2024, and December 31, 2023, respectively.  
PAGE 11  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
BUSINESS UPDATE - CONTINUED  
Total Revenues  
Three months ended  
December 31,  
Years ended  
December 31,  
December 31,  
2024  
December 31,  
2023  
Unit  
$’m  
2024  
2023  
Per Prime’s financial statements  
Total revenue  
4.4  
347.2  
782.7  
1,162.2  
Net to AOC’s 50% shareholding:  
Oil revenue  
$’m  
$’m  
-
2.2  
-
170.7  
2.9  
-
381.1  
10.3  
-
545.3  
8.1  
Gas revenue  
PPT revenue  
$’m  
19.8  
7.9  
Royalty revenue  
Total revenue  
Realized oil prices (1)  
Oil volumes sold  
Realized gas prices  
Gas volumes sold  
$’m  
-
-
-
$’m  
2.2  
-
173.6  
86.6  
2.0  
1.2  
2.4  
391.4  
84.6  
4.5  
581.1  
84.6  
6.4  
$/bbl  
MMbbl  
$/bcf  
Bcf  
-
1.0  
2.5  
1.2  
0.9  
8.7  
9.5  
(1) Realized oil prices might be different to values calculated from the table above due to roundings.  
There were no oil liftings in Q4 2024 and therefore no oil revenue was recognized compared to Q4 2023. Cargos initially scheduled for  
Q4 2024 have been pushed into Q1 2025 with up to 5 cargos scheduled to be lifted in Q1 2025.  
The decrease in oil revenue in 2024 was lower due to lower liftings in 2024 compared to 2023.  
PPT revenue is revenue recognized for tax oil, being Prime’s share of entitlement production that is sold by the operators to settle its  
tax obligations to the Nigerian state. As the tax oil lifted by the operator on behalf of Prime is sold to 3rd party customers and proceeds  
are used to settle Prime’s tax liabilities, this share of PPT is considered to be within the scope of IFRS 15, ‘Revenue from contracts with  
customers’. Consequently, this portion of income tax is presented gross in revenue and offset in current income tax expense. Prime has  
no longer reported PPT revenue since August 2023 following conversion to PIA as PPT is no longer due under the act with Prime lifting its  
own entitlement production and paying its tax in cash.  
Up to the end of July 2023, PML 52 royalties were presented gross in both revenue and cost of sales. No royalty revenue has been  
reported anymore since August 2023 with PML 52 royalties being paid in cash and presented in cost of sales.  
Cost of sales  
Three months ended  
Years ended  
December 31,  
December 31,  
December 31,  
December 31,  
$’m  
2024  
2023  
2024  
2023  
Per Prime’s financial statements  
Total cost of sales  
(68.0)  
206.3  
417.2  
598.0  
Net to AOC’s 50% shareholding:  
DD&A  
43.5  
17.9  
43.7  
24.0  
31.5  
3.9  
186.0  
73.1  
180.9  
75.5  
Production costs  
Movements on overlift/underlift balances  
Royalties – oil and gas  
Total cost of sales  
(102.4)  
7.0  
(85.6)  
35.1  
11.8  
30.8  
(34.0)  
103.1  
208.6  
299.0  
Cost of sales decreased in Q4 2024 and 2024 compared to Q4 2023 and 2023 primarily due to a large underlift movement in Q4 2024 and  
2024 compared to an overlift movement in Q4 2023 and 2023. Cargos initially scheduled for Q4 2024 have been pushed into Q1 2025  
resulting in a large underlift position at the end of Q4 2024 which is a credit to cost of sales. Up to 5 cargos are scheduled to be lifted in  
Q1 2025 unwinding this large underlift position.  
PAGE 12  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
BUSINESS UPDATE - CONTINUED  
Opex/boe  
Opex/boe is a non-GAAP measure which represents production costs on a per barrel of oil equivalent basis (using entitlement  
production). This allows the Company to better analyze performance against prior periods on a comparable basis. The most direct  
financial statement measure is production costs, disclosed in note 5 to the financial statements. Entitlement production is calculated  
using the economic interest methodology and includes cost recovery oil, tax oil, profit oil and royalty oil and is different from WI  
production that is calculated based on project volumes multiplied by Prime’s effective WI in each Block.  
Three months ended  
December 31, December 31,  
Years ended  
December 31,  
December 31,  
Unit  
$’m  
2024  
2023  
2024  
2023  
Per Prime’s financial statements  
Production costs  
35.6  
48.0  
146.1  
151.0  
Net to AOC’s 50% shareholding:  
Production costs  
$’m  
17.9  
1.8  
24.0  
2.0  
73.1  
7.1  
75.5  
8.2  
Entitlement production  
Opex/boe  
MMboe  
$/boe  
9.9  
12.0  
10.3  
9.2  
Production costs have decreased in 2024 compared to 2023 because of planned shutdown maintenance costs during H1 2024.  
Opex/boe decreased in Q4 2024 compared to Q4 2023 primarily from the lower production costs.  
Opex/boe increased in 2024 compared to 2023 as a result lower entitlement production despite a decrease in production costs.  
Entitlement production is used as the denominator as production costs include carry of costs that are recovered through entitlement  
production.  
Cash flow from operations  
Cash flow from operations before working capital is a non-GAAP measure. This represents cash generated by removing the impact  
from working capital from cash generated by operating activities and is a measure commonly used to better understand cash flow from  
operations across periods on a consistent basis and when viewed in combination with the Company’s results provides a more complete  
understanding of the factors and trends affecting the Company’s performance. A reconciliation from cash flow from operations to cash  
flow from operations before working capital is shown below:  
Three months ended  
Years ended  
December 31,  
December 31,  
December 31,  
December 31,  
$’m  
2024  
2023  
2024  
2023  
Per Prime’s financial statements  
Cash flow from operations  
58.6  
87.8  
547.2  
475.8  
Net to AOC’s 50% shareholding:  
Cash flow from operations  
29.3  
43.9  
273.6  
237.9  
Working capital adjustments included in cash flow  
from operations  
Changes in trade and other receivables  
Changes in over/underlift balances  
(67.2)  
102.4  
(11.6)  
23.6  
56.0  
(31.4)  
(4.4)  
(78.4)  
85.6  
16.0  
(11.8)  
58.3  
Changes in other working capital balances  
Total working capital adjustments  
(13.0)  
(5.8)  
20.2  
62.5  
Cash flow from operations before working capital  
52.9  
64.1  
267.8  
300.4  
PAGE 13  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
BUSINESS UPDATE - CONTINUED  
Cash flow from operations before working capital decreased in Q4 2024 compared to Q4 2023. This is primarily from lower oil prices  
and lower tax payments in Q4 2024.  
Cash flow from operations before working capital decreased in 2024 compared to 2023. This is primarily from lower production  
volumes in 2024 compared to 2023 and lower other operating income partly offset by lower tax payments in 2024 Other operating  
income recognized in 2023 consisted of investment tax credits which could be offset against PPT which is no longer applicable since  
Prime operates under the PIA terms.  
Cash flow from operations decreased in Q4 2024 compared to Q4 2023 primarily as there were no liftings in Q4 2024 compared to Q3  
2023 with working capital adjustments being relatively consistent.  
Cash flow from operations has increased in 2024 compared to 2023 as there were lower liftings in 2024 compared to 2023 and there  
was a working capital release in the 2024 compared to a working capital build in 2023.  
FCF and FCF/boe  
FCF is a non-GAAP measure. This measure represents cash generated after costs, and is a measure commonly used to assess the  
Company’s profitability. A reconciliation from total cash flow (a GAAP measure) to FCF (a non-GAAP measure) is shown below:  
Three months ended  
Years ended  
December 31,  
December 31,  
December 31,  
December 31,  
Unit  
2024  
2023  
2024  
2023  
Per Prime’s financial statements  
Total cash flow  
$’m  
$’m  
$’m  
$’m  
$’m  
(21.2)  
22.0  
16.8  
-
(85.6)  
100.0  
18.9  
-
247.3  
72.0  
71.9  
3.2  
(179.5)  
350.0  
122.3  
5.3  
Add back dividends  
Add back debt service costs (1)  
Add back derivatives  
FCF  
17.6  
33.3  
394.4  
298.1  
Net to AOC’s 50% shareholding:  
FCF  
$’m  
8.8  
1.8  
4.4  
16.7  
2.0  
197.2  
7.1  
149.1  
8.2  
Entitlement production  
MMboe  
$/boe  
FCF/boe  
8.4  
27.8  
18.2  
(1) Debt service costs comprise interest payments, repayments and drawdowns of third-party borrowings.  
FCF and FCF/boe in Q4 2024 has decreased compared to Q4 2023 primarily from the lower cash flow from operations.  
FCF and FCF/boe has increased in 2024 compared to 2023 primarily from the higher cash flow from operations and lower tax payments.  
FCF/boe is a non-GAAP ratio which represents FCF on a per barrel of oil equivalent basis using entitlement production which allows  
the Company to better analyze performance against prior periods on a comparable basis. Entitlement production is calculated using  
the economic interest methodology and includes cost oil, profit oil, tax oil and royalty oil and is different from WI production that is  
calculated based on project volumes multiplied by Prime’s effective WI in each Block.  
Tax  
The tax expense is made up of the following items:  
Three months ended  
Years ended  
December 31,  
December 31,  
December 31,  
December 31,  
$’m  
2024  
2023  
2024  
2023  
Per Prime’s financial statements  
Petroleum Profit Tax  
Deferred tax income  
Education tax  
-
(24.5)  
2.1  
-
(87.3)  
7.9  
(2.3)  
(80.9)  
14.2  
138.1  
(570.9)  
21.9  
Corporate income tax  
Withholding tax on dividends  
Capital gains tax  
17.1  
15.0  
33.0  
3.9  
74.9  
13.0  
-
130.1  
22.5  
134.3  
28.0  
33.0  
-
Other taxes  
3.2  
3.9  
3.2  
Total tax  
46.6  
11.7  
120.5  
(245.4)  
Net to AOC’s 50% shareholding:  
Total tax  
23.3  
5.9  
60.3  
(122.7)  
PAGE 14  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
BUSINESS UPDATE - CONTINUED  
The tax charge was higher in Q4 2024 compared to Q4 2023. Deferred income tax was higher in Q4 2023 compared to Q4 2024  
following an impairment recognized in Prime in Q4 2023 which resulted in a deferred tax release. Corporate income tax was lower in  
Q4 2024 compared to Q4 2023 from lower revenues in Q4 2024 compared to Q4 2023 and lower corporate income tax rates. Capital  
gains tax in Q4 2024 relates to the income recognized by Prime under the Securitization Agreement at a Capital Gains Tax rate in  
Nigeria of 10 percent.  
There was a tax charge in 2024 compared to an income in 2023. In 2023, Prime renewed the OML 130 license resulting in OML  
130 operating under the terms of the new Petroleum Industry Act as from June 1, 2023, and Prime voluntarily converted the OML  
127 license. The renewal of the OML 130 license resulted in the award of three new petroleum mining leases and one petroleum  
prospecting license. These cover some of the areas previously covered by OML 130, with some of the areas also relinquished. These  
are PML 2 (Akpo field), PML 3 (Egina), PML 4 (Preowei) and PPL 261 (South Egina). The conversion of the OML 127 license resulted in  
the award of PML 52. Under these terms, PML 2, 3, 4 and 52 and PPL 261 are subject to a 30% Corporate Income Tax regime compared  
to the previous 50% PPT regime which resulted in the release of $62.0 million of deferred tax liabilities for PML 52 and $346.0 million  
of deferred income tax liabilities PML 2, 3 and 4 and PPL 261 during 2023. Capital gains tax in 2024 relates to the income recognized  
by Prime under the Securitization Agreement at a Capital Gains Tax rate in Nigeria of 10 percent.  
Petroleum Profits Tax is a tax on the income of companies engaged in upstream petroleum operations in Nigeria. The PPT rate for  
petroleum operations under production sharing contracts with the Nigerian National Petroleum Corporation (NNPC) is 50%. Since  
operating under the new PSA terms following conversion during 2023, the leases and licenses are no longer subject to PPT.  
Education tax is imposed on every Nigerian company at a rate of 3.0% of the assessable profit in the period.  
Capital expenditure  
Capital expenditure in Q4 2024 and 2024 amounted to $20.5 million and $76.3 million, respectively, net to the Company’s 50%  
shareholding in Prime. Capital expenditure in Q4 2024 mainly related to Prime’s share of the PML 52 renewal fee. In 2024, capital  
expenditure mainly related to the infill drilling campaign on PML 2, with the drilling and completion of two Akpo West wells, and the  
drilling of a third Akpo West well that completed during April 2024 as well as the PML 52 license fee renewal.  
Expenditures in Q4 2023 and 2023 of $27.2 million and $88.8 million mainly related to the OML 130 drilling campaign with the drilling  
of two production wells on the Akpo West Field. Capital expenditure in 2023 also included the share of the OML 130 renewal fee.  
Dividends paid  
In Q4 2024, Prime made one dividend payment with a net payment to the Company of $11.0 million (Q4 2023 – one dividend payment  
with a net payment to the Company of $50.0 million). In 2024, Prime made two dividend payments with a net payment to the company  
of $36.0 million (2023 – three dividend payments with a net payment to the Company of $175.0 million).  
Net Debt  
Net Debt is a non-GAAP measure. Net Debt is calculated as loans and borrowings less cash and cash equivalents.  
December 31,  
2024  
December 31,  
2023  
As at/ $’m  
Per Prime’s financial statements  
Loans and borrowings  
Cash and cash equivalents  
Net Debt  
750.0  
(399.5)  
350.5  
750.0  
(152.2)  
597.8  
Net to AOC’s 50% shareholding:  
Net Debt  
175.3  
298.9  
Net to AOC’s 50% shareholding, Prime has $199.7 million of cash and $375.0 million of debt (as at December 31, 2023 - $76.1 million  
of cash and $375.0 million of debt).  
During 2024, $250.0 million of the commitments under Prime’s RBL facility were cancelled, reducing the principal amount from $1,050.0  
million to $800.0 million. $750.0 million remains drawn and outstanding at December 31, 2024.  
PAGE 15  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
BUSINESS UPDATE - CONTINUED  
EBITDAX and Net Debt/EBITDAX  
EBITDAX is a non-GAAP measure.This is used as a performance measure to understand the financial performance from Prime’s business  
operations without including the effects of the capital structure, tax rates, DD&A, impairment and exploration expenses. A reconciliation  
from total profit (a GAAP measure) to EBITDAX (a non-GAAP measure) is shown below.  
Net Debt/EBITDAX is a non-GAAP measure. Net Debt divided by EBITDAX is a measure of the leverage.  
Three months ended  
Twelve months ended  
December 31,  
December 31,  
December 31,  
December 31,  
$’m  
2024  
2023  
2024  
2023  
Per Prime’s financial statements  
Total profit/ (loss)  
318.7  
(158.6)  
452.0  
456.0  
Add back:  
Tax  
46.6  
22.7  
8.1  
11.7  
22.7  
120.5  
97.8  
(245.4)  
89.5  
Finance costs  
Finance income  
DD&A and Impairment  
Exploration expenses  
EBITDAX  
(2.1)  
(6.4)  
(6.8)  
87.0  
1.5  
350.6  
0.3  
372.0  
3.1  
625.0  
2.3  
484.6  
224.6  
1,039.0  
920.6  
Net Debt  
(350.5)  
(597.8)  
Net Debt/EBITDAX  
0.3  
0.7  
Net to AOC’s 50% shareholding:  
Net Debt  
(175.3)  
519.5  
0.3  
(298.9)  
460.3  
0.7  
EBITDAX  
Net Debt/ EBITDAX  
AOC Net Cash  
61.4  
232.0  
(66.9)  
AOC Net Cash/(Debt) inclusive of 50% Prime Net Debt  
(113.9)  
EBITDAX has increased in Q4 2024 compared to Q4 2023. The increase is mainly relating to other operating income recognized by  
Prime in Q4 2024 under the Securitization Agreement as no comprehensive resolution was reached among all unit parties in respect of  
the tract participation in the Agbami field by December 27, 2024. This is offset against lower production volumes.  
EBITDAX has increased in 2024 compared to 2023. The increase is mainly relating to other operating income recognized by Prime  
in Q4 2024 under the Securitization Agreement as no comprehensive resolution was reached among all unit parties in respect of the  
tract participation in the Agbami field by December 27, 2024. This is offset against lower production volumes and the fact that no other  
operating income related to tax credits is recognized in 2024 as Prime operates now under the PIA terms.  
Crude Oil Marketing  
In considering Prime’s cargo liftings, the reader should note that the timing and the frequency of these can vary based on a number  
of factors such as: reservoir performance; actual realized oil price; capex; opex; underlift/overlift positions and marine logistics. The  
revenue numbers reported for Prime include cost oil, profit oil, tax oil and royalty oil where relevant for each field.  
Prime uses contingent physical forward sales contracts for the marketing and sale of its lifted entitlement production, to manage  
commodity price risk and ensure stability in cash flows in line with the marketing strategy. Prime does not fix the Dated Brent component  
of the sales price at the time of entering the contract, instead using a trigger pricing mechanism, whereby Prime gives an irrevocable  
instruction to an off-taker to fix the Dated Brent component of a cargo, if the forward curve price goes below a certain trigger based on  
a percentage of the Brent forward curve (at the time the instruction was given) for the month of the expected lifting. If the forward curve  
price never goes below that threshold, the cargo is sold spot.  
In Q3 2024, Prime purchased an Asian put option for one million barrels of oil. This option protects Prime against price movements  
below $75.0/bbl in the period between January 2 and March 31, 2025. If the average spot price in the period between January 2 and  
March 31, 2025, falls below $75.0/bbl then Prime is compensated in cash for the difference with the strike price of $75.0/bbl. If the  
average spot price in the period is above the strike price the option would expire and Prime benefits from the higher price.  
PAGE 16  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
BUSINESS UPDATE - CONTINUED  
In Q3 2024, Prime also entered into a zero-premium Asian Dated Brent Collar transaction for one million barrels of oil. This contract  
protects Prime against price movements below $75.0/bbl with a cap of $90.85/bbl in the period between December 1, 2024, and  
February 28, 2025. If the average spot price in the period between December 1, 2024, and February 28, 2025, falls below $75.0/bbl  
then Prime is compensated in cash for the difference with the strike price of $75.0/bbl. If the average spot price in the period is above  
$90.85/bbl then Prime has to compensate in cash for the difference with the strike price of $90.85/bbl. Based on the average spot price  
to the date of release of this MD&A, Prime expects no actual cash settlement for this Asian Dated Brent Collar.  
The average cargo size lifted is one million barrels of oil.  
Oil sales were comprised of the following:  
Three months ended  
Years ended  
December 31,  
December 31,  
December 31,  
December 31,  
Oil Sales  
Unit  
2024  
2023  
2024  
2023  
Number of cargo liftings  
Of which:  
-
4
9
13  
Sold forward with the trigger price  
mechanism activated  
-
-
2
2
Sold at spot  
-
4
7
11  
-
4
9
13  
Gross crude oil sales  
Quantity in Mboe  
Mboe  
$/bbl  
-
-
3,943.3  
86.6  
9,012.8  
84.6  
12,891.7  
84.6  
Average sales price  
Average Bloomberg Dated Brent for  
the period  
$/bbl  
-
84.3  
82.7  
82.6  
Subsequent to the period-end, Prime sold three cargos with an average Dated Brent price of $81.6/bbl. Prime is expected to lift 2 more  
cargoes before the end of Q1 2025. Of the 7 cargoes expected for the remainder of the year post Q1 2025, 5 cargos are hedged with  
an average trigger price of $65.2/bbl. As of the date of this report none of the trigger prices have been triggered.  
Other non-GAAP measures related to Prime  
This MD&A includes non-GAAP measures, non-GAAP ratios and supplementary financial measures as further described herein.  
These non-GAAP figures do not have a standardized meaning prescribed by IFRS Accounting Standards and, therefore, may not be  
comparable with the calculation of similar measures by other companies. The Company believes that the presentation of these non-  
GAAP figures provides useful information to investors and shareholders as the measures provide increased transparency and the ability  
to better analyze performance against prior periods on a comparable basis.  
BLOCK 3B/4B – SOUTH AFRICA  
OnAugust28,2024,theCompanyannouncedthecompletionof thestrategicfarmdownagreementwithTotalEnergiesandQatarEnergy.  
The Company retained a direct 17.0% non-operated interest in the block and operatorship was transferred to TotalEnergies.  
Transaction highlights are:  
•
•
Maximum transaction value of up to $46.8 million to the Company.  
The Company will receive, subject to achieving certain milestones defined in the farm down agreement, staged payments for a total  
cash amount of $10.0 million, of which $3.3 million was received at completion with the remaining balance to be received in two  
successive payments conditional upon achieving key operational and regulatory milestones.  
•
The Company will also receive a full carry of its 17.0% retained share of all JV costs, up to a cap, that is repayable to TotalEnergies  
and QatarEnergy from production, and which is expected to be adequate to fund the Company’s share of drilling for 1-2 wells on  
the license.  
On January 13, 2025, the Company announced the completion of the agreement with Eco to acquire an additional 1.0% (one percent)  
interest from Azinam Limited, Eco’s wholly owned subsidiary, in exchange for all common shares and warrants held by the Company in  
Eco. The Company now holds 18.0% in Block 3B/4B and is no longer a shareholder in Eco. Africa Oil will benefit from the carry agreed  
between Eco, TotalEnergies and QatarEnergy for this incremental interest  
The Company expects that the first exploration well on Block 3B/4B can be drilled during 2026.  
PAGE 17  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
BUSINESS UPDATE - CONTINUED  
BLOCKS EG-18 AND EG-31 – EQUATORIAL GUINEA  
The Company has two PSCs with the Republic of Equatorial Guinea for offshore Blocks EG-18 and EG-31. The Company holds an  
80% operated interest, subject to back in rights by GEPetrol in both Blocks. Work programs on both Blocks include re-processing of  
existing 3D seismic surveys and identification of prospects within the first 2-year sub period. A 1-year extension of the first Exploration  
sub-period was granted on December 23, 2024, extending the renewal period to March 1, 2026. At the end of 2024, all financial  
commitments for the initial exploration period have been met, the 1 year extension should enable the required technical work to be  
completed.  
EQUITY INVESTMENTS IN ASSOCIATES AND INVESTMENT HELD FOR SALE  
As at December 31, 2024, the Company held equity investments in three oil and gas companies, which provides exposure to several  
high-impact exploration drilling prospects in South Africa, Namibia, and Guyana.  
The Company held the following equity investments in associates and investment held for sale as of December 31, 2024:  
Africa Energy  
1,407,812,249  
276,982,414  
-
Eco  
370,173,680  
54,941,744  
-
Impact (1)  
1,139,147,442  
343,545,659  
105,918,737  
449,464,396  
Issued and Outstanding  
Shares held by AOC at January 1, 2024  
Shares acquired in the period  
Shares held by AOC at December 31, 2024  
276,982,414  
54,941,744  
AOC’s holding (%) – December 31 2024  
AOC’s holding (%) – December 31 2023  
Share price (CAD) on December 31, 2024  
Exchange rate to USD on December 31, 2024  
19.67%  
19.67%  
0.03  
14.84%  
14.84%  
0.21  
39.46%  
31.09%  
-
-
0.70  
0.70  
(1) Impact is a privately held UK company and no share price is available.  
Impact  
Impact is a private UK oil and gas exploration company with assets located offshore Namibia and South Africa.  
In the year ended December 31, 2024, the Company acquired an additional 105,918,737 shares from various parties. The total cost for  
these purchases was approximately $88.6 million.  
Through these transactions, the Company has materially increased its interest from 31.1% at start of 2024 to 39.5% at end of 2024,  
enhancing its rights and influence over a core strategic asset and value driver for Africa Oil.  
On February 24, 2022, Impact announced that the Venus-1X exploration well in Block 2913B, offshore Namibia, had discovered  
hydrocarbons. 4 subsequent wells, Venus-1X side track, Venus-1A, Venus-2A and Mangetti-1X have been drilled and tested to appraise  
the Venus discovery. The Joint Venture is continuing to progress the proposed development of the Venus Field, with development  
studies ongoing. The Venus Field is expected to be the first development in Block 2913B, producing 150 kbopd (gross field) of ~45°  
API oil, with final investment decision expected by the end of first half of 2026.  
During Q1 2025, the joint venture completed the drilling of Tamboti-1X exploration well in Block 2913B. Tamboti-1X was safely  
and successfully drilled to a total depth of 6450mMD on Block 2913B, approximately 12km northeast of the Mangetti-1X well and  
approximately 25km north-northwest of the Venus-2A well, using the Deepsea Mira semi-submersible drilling rig. Black oil was  
encountered within 85m of net reservoir of lower quality Upper Cretaceous sandstones, belonging to the Mangetti fan system. A DST  
program was completed at the Tamboti-1X location, and results from the acquired log, core and DST data are currently under analysis.  
During 2024, two additional 3D seismic acquisition programs were completed to facilitate further exploration over the southern and  
northern parts of the combined blocks. This has resulted in most of the licensed area now being covered by 3D seismic. This data is  
currently being processed and interpreted and will help further evaluate prospects and leads in the far northern and southern parts of  
the Blocks.  
On February 3, 2025, the Deepsea Mira drilling rig spud the Marula-1X exploration well within the southern part of Block 2913B. This  
well will target Albian-aged sandstones, within the Marula fan complex and has the potential to unlock further exploration targets  
across the south, which is an area lying at the heart of the prolific Kudu source-rock kitchen. Deepsea Mira is also expected to drill the  
Olympe prospect, targeting Albian sands within a structural closure on Block 2912.  
On November 1, 2024, the Company announced the completion of a strategic farm-down agreement between its investee company,  
Impact, and TotalEnergies. Following the closing of this deal, Impact retains a 9.5% interest in the Blocks that is fully carried for all joint  
venture costs, with no cap, through to first commercial production. Impact also received a cash reimbursement of approximately $99.0  
million for its share of the past costs incurred on the Blocks net to the farmout interests.  
This agreement provides Impact with a full interest-free carry loan over all of Impact’s remaining development, appraisal and exploration  
costs on the Blocks from January 1, 2024 (“Effective Date”), until the date on which Impact receives the first sales proceeds from oil  
production on the Blocks (“First Oil Date”).  
On and from the First Oil Date, the carry is repayable to TotalEnergies in kind from 60% of Impact’s after-tax cash flow net of all joint  
venture costs, including capital expenditures. During the repayment of the carry, Impact will pool its entitlement barrels with those of  
TotalEnergies for more regular off-takes and a more stable cashflow profile and will also benefit from TotalEnergies’ marketing and sales  
capabilities.  
PAGE 18  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
BUSINESS UPDATE - CONTINUED  
Africa Energy  
Africa Energy is a TSX-Venture (Toronto) and Nasdaq First North Growth Market (Stockholm) listed international oil and gas exploration  
company with an interest in Block 11B/12B offshore South Africa. There are two gas condensate discoveries (Brulpada and Luiperd) on  
this block in proximity to offshore gas infrastructure and onshore gas market in Mossel Bay, South Africa.  
On July 1, 2024, Africa Energy announced that CNR International (South Africa) Limited, a partner in Block 11B/12B, has provided  
notice to the joint venture partners that it will withdraw from its 20% interest in the Block. On July 29, 2024, TotalEnergies EP South Africa  
B.V., the operating partner on the Block, and QatarEnergy International E&P LLC announced that they will withdraw from their 45%  
and 25% operated interests in the Block, respectively. Under the joint operating agreement, the withdrawing parties will assign their  
interest free of charge to Main Street 1549 Proprietary Ltd. (“Main Street”), the non-withdrawing partner, which currently has a direct  
10% participating interest in Block 11B/12B.  
The Company owns 49% of the common shares and 100% of the Class B shares of Main Street. The remaining 51% of the common  
shares of Main Street are held by Arostyle. In light of the withdrawal of the joint venture partners in Block 11B/12B, and subject to all  
relevant regulatory approvals, Main Street expects to hold a 100% participating interest in Block 11B/12B.  
On December 20, 2024, Africa Energy announced that it has entered into a non-binding agreement with Arostyle Investments (RF)  
Proprietary Ltd. (“Arostyle”), to restructure their join investment in Main Street. Under the non-binding agreement, Africa Energy and  
Arostyle agreed that subject to all relevant regulatory approvals, the Parties will restructure Main Street resulting in the Company holding  
a direct 75% participating interest and Arostyle holding a direct 25% participating interest in Block 11B/12B, with the relationship  
between the Parties being governed by the existing Joint Operating Agreement in respect to Block 11B/12B.  
Africa Energy and Arostyle believe that natural gas will play a critical role in South Africa’s energy transition, and the use of indigenous  
gas from Block 11B/12B discoveries are currently the most material domestic supply option in South Africa  
Eco  
Eco is a TSX-V and AIM-listed oil and gas company that operates and holds WI in four exploration Blocks offshore Namibia and operates  
one exploration Block offshore South Africa and is a party with the Company in Block 3B/4B, offshore South Africa. Eco also has a direct  
WI and indirect interest in two exploration Blocks offshore Guyana, the Orinduik and Canje Blocks. The Company’s ownership interest  
was approximately 14.8% at December 31, 2024.  
On July 26, 2024, the Company signed an agreement with Eco to acquire an additional 1.0% interest in Block 3B/4B from Azinam  
Limited, Eco’s wholly owned subsidiary, in exchange for all common shares and warrants over common shares held by the Company in  
Eco. On January 13, 2025, the Company announced the closing of this transaction. The Company is no longer a shareholder in Eco and  
its representative on Eco’s Board of Directors has resigned from this position.  
ENVIRONMENTAL, SOCIAL AND GOVERNANCE  
The Company is committed to being a responsible company that integrates sustainability considerations throughout its decision-  
making and operational management. The Company is focused on the effective identification and management of risk in its operational  
activities and, to the extent that it is reasonably able to influence them, those of its JV parties and investee companies. The Company  
selects its operating parties in part on their ability and commitment to manage ESG risks effectively. The Company monitors operator  
performance and works with operators where possible and necessary to improve performance. The Company’s role as the custodian  
of its shareholders’ capital is to ensure robust governance systems are in place to minimize risks and deliver our sustainability goals.  
As part of those governance systems, the Company receives operator ESG performance data from Prime on a quarterly basis, which  
allows it to monitor alignment with agreed ESG targets and objectives. Prime developed an updated ESG Strategy and GHG Roadmap  
in 2024, focused on compliance with IFC Performance Standards, a long term plan for net zero Scope 1 and 2 GHG emissions by 2050  
and zero routine flaring by 2030.  
Prime has reported good flare performance during 2024 despite flare events on Agbami and Egina related to operational and  
maintenance issues.  
Reductions in flaring and fugitive emissions will support Prime’s objectives to reduce working interest scope 1 greenhouse gas (“GHG”)  
emissions by 25% by 2025 and by 35% by 2030 compared to a 2020 baseline as part of Prime’s Net Zero by 2050 for scope 1 and 2  
emissions.  
Additionally, Prime commissions independent Environmental, Social, Health and Safety (“ESHS”) monitoring reviews conducted  
annually to support its reserves-based lending facility. The 2024 Monitoring Review found that overall, Prime is managing the ESHS  
aspects of its business, in its non-operated role, “exceptionally well,” with no significant issues that would impact financing.  
The Company has completed an environmental and social impact assessment to support permitting and licensing to support exploration  
drilling activities in Block 3B/4B in South Africa. The Company submitted an ESIA application for proposed drilling activities on Block  
3B/4B during Q2 2024. An Environmental Authorization was issued by the regulator in September 2024 and that is being followed by  
a stakeholder consultation and appeals process which concluded in December 2024. The regulator is then expected to provide its final  
decision on the appeals during mid-2025.  
As part of its compliance with its PSC requirements in Equatorial Guinea and in line with the Company’s Social Investment Framework,  
the Company has funded the renovation of a school at Ayene in mainland Equatorial Guinea. In addition to the PSC requirements,  
Africa Oil funded school supplies for all student and classrooms at the recently renovated school.  
PAGE 19  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
BUSINESS UPDATE - CONTINUED  
The Company’s environmental and social management system, which is overseen by the Board-level Sustainability Committee  
(previously the ESGHS Committee), aims effectively and appropriately to identify, monitor and address environmental, health & safety  
and social risks to our business and investments, in addition to identifying opportunities for performance improvement and risk  
reduction. The Company maintains a risk register by which it monitors financial, operational and ESG risks to the Company. Africa Oil  
regularly undertakes annual independent HSEC audits and engages with a range of ESG ratings assessments in support of investor and  
broader stakeholder engagement, as well as to identify opportunities for performance improvement.  
Africa Oil is committed to regular review and update of its sustainability strategy to ensure continued alignment with both the Company’s  
evolving business and the broader global context.  
The Company was awarded a gold rating by the ESG rating agency EcoVadis in February 2024. The independent evaluation undertaken  
concluded that the Company was within the top 3% of all companies evaluated for ESG performance.  
To the extent possible given its non-Operator role on assets, the Company endeavors to undertake its activities in line with the  
International Finance Corporation’s Performance Standards on Environmental and Social Sustainability and independent monitoring  
reviews are conducted on a regular basis to assess compliance with those standards. The most recent review was completed in  
December 2024. This found that Company management systems were fit for purpose to manage ESG risks. The report is published,  
along with all other Independent Monitoring Group reports, on Africa Oil’s website.  
The Company’s 2024 Sustainability Report is under preparation and will be disclosed on the Company website, as in previous reports  
it will contain information on our performance and strategy.  
On an ongoing basis, the Company monitors the development of applicable legislation to ensure compliance with evolving policy and  
associated regulatory requirements. As the Company has a primary listing in Canada on the Toronto Stock Exchange and a secondary  
listing in Sweden on the Oslo Stock Exchange, this includes sustainability disclosure requirements in both Canada and the EU, including  
the EU Corporate Sustainability Reporting Directive.  
PAGE 20  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
SELECTED ANNUAL INFORMATION  
December 31,  
December 31,  
2023  
December 31,  
2022  
For the years ended  
2024  
Statement of Net (Loss)/ Income and Comprehensive  
(Loss)/ Income:  
Net (loss)/ income attributable to common shareholders ($’m)  
(279.1)  
87.1  
(60.3)  
Data per Common Share:  
Basic (loss)/ income per share ($/share)  
Diluted (loss)/ income per share ($/share)  
(0.62)  
(0.62)  
0.19  
0.18  
(0.13)  
(0.13)  
Balance Sheet:  
Working capital ($’m)  
Total assets ($’m)  
62.1  
214.7  
966.2  
158.6  
917.7  
615.2  
In 2024, the Company recorded a net loss attributable to common shareholders of $279.1 million which is a decrease from the net  
income of $87.1 million recorded in 2023. In 2024, this is primarily made up of income from the Company’s investment in Prime of  
$226.0 million offset against losses from the Company’s investment in associates of $38.7 million and an impairment in the Company’s  
investment in Prime of $436.7 million as the fair value of the Company’s existing shareholding in Prime was calculated based on the  
implied value of the Proposed Reorganization, which was in excess of the carrying value resulting in a non-cash impairment loss on the  
investment in Prime.  
In 2023, the Company recorded a net income attributable to common shareholders of $87.1 million which is an increase from the loss  
recorded in 2022 of $60.3 million. In 2023, this is primarily made up of income from the Company’s investment in Prime of $228.0  
million offset against losses from the Company’s investment in associates of $47.0 million and impairment recognized to its Kenyan  
intangible exploration assets of $62.2 million writing these assets down to nil. The net income attributable to common shareholders in  
2023 of $87.1 million has increased from a loss of $60.3 million in 2022 as the income from Prime has increased by $81.4 million and  
the impairment recognized in relation to the Company’s intangible exploration assets in Kenya has decreased by $108.4 million. This is  
offset by an increase in the share of loss from investments in associates of $38.8 million.  
In 2024, the basic and diluted loss per share was $0.62 (2023 – the basic income per share was $0.19 and the diluted income per share  
was $0.18). The loss per share has arisen primarily from the impairment recognized to the Company’s investment in Prime.  
In 2023, the basic income per share was $0.19 and the diluted income per share was $0.18 (2022 - the basic loss and diluted loss per  
share was $0.13). The net basic and diluted income per share has increased from 2022 as the income from Prime is higher and the  
impairment in Kenya is lower.  
In 2024, the decrease in working capital was driven by a decrease in cash balances following the acquisition of additional shares in  
Impact and shareholder returns. In 2024 the decrease in total assets is primarily due to the decrease in cash balances and the decrease  
to the Company’s investment in Prime from the impairment recognized.  
In 2023, the increase in working capital was driven by an increase in cash balances and lower payables following settlement of a  
provision for joint venture matters and joint venture payables in Kenya. In 2023, the increase in total assets is primarily due to increases  
in cash balances and the Company’s investment in Prime.  
PAGE 21  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
SUMMARY OF QUARTERLY INFORMATION  
Summarized quarterly results for the past eight quarters are as follows:  
31-Dec  
2024  
30-Sep  
2024  
30-Jun  
2024  
31-Mar  
2024  
31-Dec  
2023  
30-Sep  
2023  
30-Jun  
2023  
31-Mar  
2023  
For the three months ended  
Share of profit/ (loss) from equity  
investments in joint venture and  
associates ($’m)  
152.1  
18.3  
9.7  
0.4  
7.2  
(80.8)  
51.3  
47.1  
178.0  
106.9  
32.5  
Net income/ (loss) attributable to  
common shareholders ($’m)  
6.2  
442,690  
449,667  
(289.2)  
3.5  
460,991  
474,746  
(88.8)  
462,231  
472,942  
21.9  
461,199  
473,846  
Weighted average shares  
– Basic ‘000  
442,960 451,231  
442,960 464,890  
462,340 456,229  
473,959 467,839  
Weighted average shares  
– Diluted ‘000  
Basic income / (loss) per share ($)  
Diluted income/ (loss) per share ($)  
0.02  
0.02  
(0.65)  
(0.65)  
0.00  
0.00  
0.01  
0.01  
(0.19)  
(0.19)  
0.10  
0.10  
0.23  
0.23  
0.05  
0.05  
SUMMARY OF KEY ITEMS OF FINANCIAL PERFORMANCE IN THE THREE MONTHS AND YEARS ENDED  
DECEMBER 31, 2024, AND DECEMBER 31, 2023  
Three months ended  
Years ended  
December 31, December 31,  
December 31, December 31,  
2024  
159.3  
(13.3)  
6.2  
2023  
(80.8)  
(9.0)  
2024  
226.0  
(32.4)  
(279.1)  
48.0  
2023  
181.0  
(31.9)  
87.1  
Share of profit/ (loss) from investment in joint venture  
General and administrative expenses  
Net income/ (loss)  
(88.8)  
4.9  
Adjusted net (loss)/ income  
(3.2)  
84.5  
Share of profit from investment in joint venture  
In Q4 2024 and 2024, the Company’s share in the result of its 50% equity investment in Prime was $159.3 million and $226.0 million  
respectively (Q4 2023 and 2023 – loss of $80.8 million and a profit of $181.0 million respectively).  
The figures below explaining the movements in the results of Prime are based on Prime’s gross balances as per its financial statements.  
Prime revenues decreased by $342.8 million in Q4 2024 compared to Q4 2023, driven by no liftings in Q4 2024 compared to four  
liftings in Q4 2023. There was a decrease in costs of sales of $274.3 million, primarily driven by an underlift movement during Q4  
2024 of $204.8 million compared to an overlift movement in Q4 2023 of $63.0 million. This resulted in a decrease in gross profit to  
$72.4 million in Q4 2024 from $140.9 million in Q4 2023. In Q4 2023 there was an impairment recognized of $263.3 million and no  
impairment recognized in Q4 2024. Other operating income increased by $329.7 million in Q4 2024 compared to Q4 2023 relating  
to other operating income recognized by Prime in Q4 2024 under the Securitization Agreement as no comprehensive resolution  
was reached among all unit parties in respect of the tract participation in the Agbami field by December 27, 2024. Finance income  
decreased by $10.2 million in Q4 2024 compared to Q4 2023, mainly driven by an accounting loss on derivatives in Q4 2024. There  
was a tax charge in Q4 2024 of $46.6 million compared to $11.7 million in Q4 2023. The increase was mainly driven by capital gains  
tax in Q4 2024 in relation to the income recognized by Prime under the Securitization Agreement at a Capital Gains Tax rate in Nigeria  
of 10 percent. This has resulted in Prime’s profit increasing from a loss of $158.6 million in Q4 2023 to a profit of $318.7 million in Q4  
2024, an increase of $477.3 million.  
Prime revenues decreased by $379.5 million in 2024 compared to 2023, mainly driven by lower liftings and no PPT and royalty revenue  
recognized in relation to the Agbami field. PPT revenue has no longer been reported in gross revenues since August 2023 with Prime  
lifting its own entitlement production and paying its tax in cash and no royalty revenue has been reported since August 2023 with PML  
52 royalties being paid in cash and presented in cost of sales. There was a decrease in costs of sales of $180.8 million, primarily driven  
by an underlift movement during 2024 of $171.2 million compared to an overlift movement of $23.6 million in 2023. This resulted in  
a decrease in gross profit to $365.5 million in 2024 from $564.2 million in 2023. Other operating income increased by $305.0 million  
compared to 2023, mainly relating to $329.7 million of other operating income recognized by Prime in 2024 under the Securitization  
Agreement as no comprehensive resolution was reached among all unit parties in respect of the tract participation in the Agbami field  
by December 27, 2024. Other operating income in 2023 related to investment tax credits that offset PPT that Prime no longer receives  
under the PIA. In 2023 there was an impairment recognized of $263.3 million and no impairment recognized in 2024. There was a tax  
charge in 2024 of $120.5 million compared to an income of $245.4 million in 2023. Prime renewed the OML 130 license resulting in  
OML 130 operating under the terms of the new Petroleum Industry Act as from June 1, 2023, and Prime voluntarily converted the OML  
127 license to operate under the new Petroleum Industry Act from March 1, 2023, with all key conditions precedent fulfilled during  
PAGE 22  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
SUMMARY OF QUARTERLY INFORMATION - CONTINUED  
2023. Under these terms, OML 127 and OML 130 are subject to a 30% Corporate Income Tax regime compared to the previous 50%  
PPT regime which resulted in the release of $62.0 million and $346.0 million of deferred income tax liabilities during 2023 for OML 127  
and OML 130 respectively. Prime recognized a capital gains tax charge in 2024 of $33.0 million in relation to the income recognized  
by Prime under the Securitization Agreement at a Capital Gains Tax rate in Nigeria of 10 percent. This has resulted in Prime’s profit  
decreasing from $456.0 million in 2023 to $452.0 million in 2024, a decrease of $4.0 million.  
General and administrative costs  
On June 24, 2024, the Company announced that it had reached an agreement with BTG to acquire the remaining 50% interest in Prime in  
exchange for newly to be issued common shares in Africa Oil. Completion of this transaction is subject to customary closing conditions  
and is expected on or about March 7, 2025. This transaction falls under IFRS 3 Business Combinations under which acquisition related  
costs are expensed in the periods in which the costs are incurred, and the services are received.  
The table below shows adjusted general and administrative expenses, which is a non-GAAP measure, by excluding the BTG transaction  
related expenses and is meant to improve comparability between periods.  
Three months ended  
December 31, December 31,  
Years ended  
December 31, December 31,  
2024  
13.3  
(0.7)  
12.6  
2023  
9.0  
-
2024  
32.4  
(6.9)  
25.5  
2023  
31.9  
-
General and administrative expenses  
BTG transaction related expenses  
Adjusted general and administrative expenses  
9.0  
31.9  
Adjusted general and administrative expenses, including share-based compensation charges relating to the LTIP and Stock Option  
Plan, amounted to $12.6 million and $25.5 million, respectively, in Q4 2024 and 2024 (Q4 2023 and 2023 - $9.0 million and $31.9  
million respectively). Share-based compensation charges amounting to $0.2 million and $1.5 million, respectively, in Q4 2024 and  
2024 (Q4 2023 and 2023 – $1.9 million and $11.3 million respectively) are impacted by movements in the share price of the Company.  
Adjusted general and administrative expenses excluding share-based compensation charges amounted to $12.4 million in Q4 2024  
compared to $7.1 million in Q4 2023 with the increase primarily driven by business development costs and an increase in the number  
of employees.  
Adjusted general and administrative expenses excluding share-based compensation charges amounted to $24.0 million in 2024  
compared to $20.6 million in 2023 with the increase primarily driven by business development costs and an increase in the number of  
employees.  
Net (loss) / income and Adjusted net (loss)/ income  
Net (loss) / income as reported by the Company in its Consolidated Statement of Net (Loss) / Income and Comprehensive (Loss) /  
Income can be impacted by items that are not reflective of the Company’s underlying performance for the period. This might impact  
the comparability of the results of the Company between periods.  
Adjusted net (loss)/ income is a non-GAAP measure. This measure adjusts for the following items and is meant to improve comparability  
between periods:  
•
•
•
•
Impairment and reversal of impairment is adjusted since this affects the economics of an asset for the lifetime of that asset, not only  
the period in which it is impaired, or the impairment is reversed.  
Share of loss from investments in associates is adjusted since the associated companies are in the exploration phase with the results  
not being reflective of the Company’s underlying performance for the period.  
Other items of income and expenses are adjusted when the impact on net income in the period is not reflective of the Company’s  
underlying performance for the period.  
Tax effects of the above-mentioned adjustments to net income.  
PAGE 23  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
SUMMARY OF QUARTERLY INFORMATION - CONTINUED  
A reconciliation from net (loss) / income to adjusted net (loss)/ income is shown below:  
Three months ended  
Years ended  
December 31,  
2024  
December 31,  
December 31,  
2024  
December 31,  
2023  
Unit  
$’m  
2023  
Net income/ (loss)  
6.2  
(88.8)  
(279.1)  
87.1  
Adjusted for:  
Impairment recognized by Prime – net to  
AOC’s 50% shareholding  
-
-
131.7  
(39.5)  
-
-
131.7  
(39.5)  
$’m  
$’m  
Tax effect of impairment recognized by  
Prime – net to AOC’s 50% shareholding  
Deferred tax release recognized by Prime  
following PIA conversion – net to AOC’s  
50% shareholding  
-
(164.8)  
16.5  
-
-
-
-
(164.8)  
16.5  
(204.0)  
$’m  
$m  
Income recognized by Prime under  
Securitization Agreement – net to AOC’s  
50% shareholding  
-
-
Tax effect of income recognized by Prime  
under Securitization Agreement – net to  
AOC’s 50% shareholding  
$m  
131.7  
7.2  
-
436.7  
38.7  
-
Impairment investment in Prime  
$’m  
Share of loss from investments in  
associates  
1.5  
47.0  
$’m  
$’m  
$’m  
-
-
-
62.2  
Impairment intangible exploration assets  
(3.2)  
4.9  
48.0  
84.5  
Adjusted net (loss)/ income  
Adjusted net (loss)/ income attributable to  
common shareholders per share  
(0.00)  
(0.00)  
0.01  
0.01  
0.11  
0.11  
0.18  
0.18  
Basic  
Diluted  
Weighted average number of shares outstanding  
for the purpose of calculating adjusted net  
income per share  
442,690,041  
442,690,041  
463,020,104  
473,772,143  
449,431,803  
456,462,277  
462,231,061  
472,942,487  
Basic  
Diluted  
Adjusted net (loss)/ income amounted to $(3.3) million and $48.0 million, respectively, in Q4 2024 and 2024 (Q4 2023 and 2023 - $4.9  
million and $84.5 million respectively).  
Adjusted net result in Q4 2024 is a loss compared to an adjusted net income in Q4 2023. This is primarily from higher general and  
administrative expenses in Q4 2024.  
Adjusted net income in 2024 is lower than 2023. This is primarily from a lower profit from the investment in Prime in 2024 mainly driven  
by lower production volumes.  
PAGE 24  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
SUMMARY OF QUARTERLY INFORMATION - CONTINUED  
SUMMARY OF KEY ITEMS OF FINANCIAL POSITION AS AT DECEMBER 31, 2024, AND  
DECEMBER 31, 2023  
December 31,  
December 31,  
2023  
As at  
2024  
Assets  
Equity investment in joint venture  
Equity investments in associates  
Intangible exploration assets  
Cash and cash equivalents  
328.4  
177.6  
29.3  
572.5  
134.7  
19.1  
61.4  
232.0  
Equity investment in joint venture  
As at December 31, 2024, the Company’s investment in Prime was $328.4 million compared to $572.5 million as at December 31, 2023.  
The carrying value of the investment mainly decreased from impairment recognized of $436.7 million and dividends received of $36.0  
million offset by the Company’s share of Prime’s profit of $226.0 million in 2024.  
As a result of the significant decrease in the Africa Oil share price between June 24, 2024, when the Company announced the Proposed  
Reorganization and December 31, 2024, the fair value of the existing 50% shareholding in Prime decreased as the fair value considers  
the number of Africa Oil shares that were agreed in relation to the purchase of the additional interest in Prime and the trading value  
of Africa Oil shares as this is an observable fair value input under IFRS Accounting Standards. As at December 31, 2024, the fair value  
of the Company’s existing shareholding in Prime was calculated to be $328.4 million based on the implied value of the Proposed  
Reorganization, resulting in a non-cash impairment loss on the investment in Prime of $436.7 million in 2024. The fair value has been  
calculated based on the Africa Oil share price of CAD 1.97 as of December 31, 2024, and the USD/CAD exchange rate of 1.4384 as  
of December 31, 2024. The consideration under the Proposed Reorganization will be based on the share price and exchange rate as  
of the date of completion of the Proposed Reorganization and may therefore change materially compared to the fair value of $328.4  
million as at December 31, 2024. This might therefore result in the recognition of additional impairment charges or the reversal of  
previously recognized impairment charges in future reporting periods based on the movements in the Africa Oil share price and the  
USD/CAD exchange rate between December 31, 2024, and the closing date of the transaction.  
Equity investments in associates  
As at December 31, 2024, the Company’s investment in associates was $177.6 million compared to an investment value of $134.7  
million as at December 31, 2023. The carrying value of the investments increased by $42.9 million in 2024 from the acquisition of shares  
in Impact for $88.6 million and the reversal of an impairment in relation to the Company’s investment in Africa Energy Corp, partly offset  
by the Company’s share of the associate’s losses and the reclassification of the investment in Eco from equity investments in associates  
to an investment held for sale of $7.0 million. The investment in Impact Oil and Gas Ltd, holding the working interests in the Namibia  
Orange Basin Blocks 2913B and 2912, makes up $174.8 million of the total equity investments in associates.  
Intangible exploration assets  
The Company’s intangible exploration assets relate to its interests in Blocks EG-18 and EG-31 in Equatorial Guinea and Block 3B/4B in  
South Africa.  
December 31,  
2024  
December 31,  
2023  
Equatorial Guinea  
17.9  
11.4  
29.3  
13.4  
5.7  
South Africa  
Net carrying amount, end of the period  
19.1  
Equatorial Guinea  
The Company signed two Production Sharing Contracts with the Republic of Equatorial Guinea for offshore Blocks EG-18 and EG-31  
in February 2023. The Company holds an 80% operating interest in these Blocks. In 2024, expenditure of $4.5 million was incurred  
(2023 - $13.4 million).  
PAGE 25  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
SUMMARY OF QUARTERLY INFORMATION - CONTINUED  
South Africa  
At December 31, 2024, the Company held a 17.0% participating interest in the Block 3B/4B Exploration Right. In the year ended  
December 31, 2024, expenditure of $5.7 million was incurred (years ended December 31, 2023 - $0.6 million) which included $9.0  
million payments to Azinam Limited, a wholly owned subsidiary of Eco, for the increase of its operated working interest in Block 3B/4B  
by 6.25% to 26.25%. Government approval was obtained on January 19, 2024, resulting in payment of the second tranche of $2.5  
million to Azinam and a farm down deal with a third party was completed on August 28, 2024, resulting in the payment of the third  
tranche of $4.0 million. The first tranche of $2.5 million was paid during 2023 and was reclassified from prepayments to intangible  
exploration assets following government approval.  
On August 28, 2024, the Company announced the completion of the strategic farm down agreement with TotalEnergies and  
QatarEnergy for the Block 3B/4B Exploration Right, located in South Africa. The Company retained a 17.0% interest in Block 3B/4B  
and operatorship was transferred to TotalEnergies. The Company will receive, subject to achieving certain milestones as defined in the  
agreement, staged cash payments for a total amount of $10.0 million of which $3.3 million was received at closing of the transaction  
with the remaining balance to be received in two successive payments conditional upon achieving key operational and regulatory  
milestones.  
On July 26, 2024, the Company signed an agreement with Eco to acquire an additional 1.0% interest in Block 3B/4B from Azinam  
Limited, Eco’s wholly owned subsidiary, in exchange for all common shares and warrants over common shares held by the Company  
in Eco. On January 13, 2025, the Company announced the completion of the transaction and the Company’s interest in Block 3B/4B  
increased by 1.0% to 18.0% and the Company ceased to be a shareholder in Eco. Africa Oil will benefit from the carry agreed between  
Eco, TotalEnergies and QatarEnergy for this incremental interest.  
Cash and cash equivalents  
As at December 31, 2024, the Company had $61.4 million cash on hand, compared with a cash balance of $232.0 million as at  
December 31, 2023. The Company received a dividend from Prime of $36.0 million, returned $67.9 million to shareholders by way of  
share buybacks and dividends, paid $87.8 million to increase its shareholding in Impact, paid the second and third tranches totaling  
$6.5 million to Azinam in relation to the increased working interest in Block 3B/4B, received $3.3 million as part of the farm out deal  
in Block 3B/4B, incurred capital expenditure in respect of the licenses in Equatorial Guinea and South Africa, settled working capital  
balances and incurred general and administrative costs.  
LIQUIDITY AND CAPITAL RESOURCES  
As at December 31, 2024, the Company had cash of $61.4 million and working capital of $62.1 million. The Company’s primary  
source of liquidity is dividends received from Prime. If Prime experiences operational delays, reduced performance or similar adverse  
conditions, or reinvest their free cash flow, the dividends received could be reduced in future periods.  
Corporate Facility  
On May 21, 2024, the Company amended its existing Corporate Facility. At any point before Prime refinances its debt, the availability  
under the Corporate Facility will now be $65.0 million until June 30, 2025, $43.0 million from July 1, 2025, until June 30, 2026, and  
$22.0 million from July 1, 2026, to May 21, 2027, i.e. its new final maturity date. After Prime refinances its debt, the availability under  
the Corporate Facility will be $125.0 million until June 30, 2026, and $63.0 million from July 1, 2026, until May 21, 2027. Commitment  
fees of 40% of the margin are payable on the undrawn available portion of the Corporate Facility and commitment fees of 15% of the  
margin are payable on the unavailable portion of the Corporate Facility. The Corporate Facility carries interest of 1 month-SOFR plus a  
margin of 6.5% in the first year from May 21, 2024, 7.0% in the second year and 7.5% in the third year.  
The Corporate Facility is subject to financial and liquidity covenants. The Company shall ensure that total net debt to adjusted EBITDAX  
on June 30 and December 31 of each year is no greater than 3.0:1, the FLCR ratio on March 31 and September 30 of each year is not  
less than 1.1:1 and that from March 31 and September 30 of each year during each of the four successive quarters there are or will  
be sufficient funds available to the Group to meet all relevant expenditure to be incurred in each of these four successive quarters as  
they fall due. The Company has been in compliance with the covenants in the three months and years ended December 31, 2024. The  
Company has no off-balance sheet arrangements.  
Future Funding Outlook  
To finance its future acquisition, exploration, development and operating costs, the Company may require financing from external  
sources, including issuance of new shares, issuance of debt or executing farmout or disposition arrangements. There can be no  
assurance that such financing will be available to the Company or, if available, that it will be offered on terms acceptable to the Company.  
The Company believes that its existing cash balances combined with anticipated funds flow from Prime dividends will provide sufficient  
liquidity for the Company to meet its financing, operating and capex commitments as they fall due.  
PAGE 26  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
OUTSTANDING SHARE DATA  
The following table outlines the maximum potential impact of share dilution upon full execution of outstanding convertible instruments  
as at the effective date of the MD&A.  
Common shares outstanding  
436,602,570  
457,616  
Outstanding share purchase options  
Outstanding performance share units  
Outstanding restricted share units  
8,605,860  
1,672,515  
447,338,561  
Full dilution impact on Common Shares outstanding  
RELATED PARTY TRANSACTIONS  
Transactions with Africa Energy:  
On December 19, 2022, Africa Energy announced that it had secured a $5.0 million promissory note of which $2.0 million was provided  
by the Company and the remaining by other parties. On November 7, 2023, the promissory note provided by the Company and other  
parties to Africa Energy was increased by $3.3 million with $1.5 million of the increase to be provided by the Company of which $1.0  
million was provided in the year ended December 31, 2024, and $0.5 million was provided in the year ended December 31, 2023. The  
note is unsecured and matures on March 31, 2025, when the principal and accrued interest are due in full. The note carries an annual  
interest rate of 15%. The note is repayable pro rata any time before maturity without penalty. In the year ended December 31, 2024,  
interest on the note amounted to $0.5 million (year ended December 31, 2023 - $0.3 million).  
The Company has technical and administrative cost sharing agreements with Africa Energy totaling $0.5 million in the year ended  
December 31, 2024 (year ended December 31, 2023 - $0.6 million).  
Transactions with Eco:  
During the year ended December 31, 2023, Africa Oil SA Corp. signed a legally binding Assignment and Transfer agreement with  
Azinam Limited (“Azinam”), a wholly owned subsidiary of Eco, to acquire an additional 6.25% interest in Block 3B/4B for a total cash  
consideration of up to $10.5 million, to be paid in tranches on the following milestones:  
•
•
•
•
$2.5 million within 30 business days after July 10, 2023;  
$2.5 million upon the SA government’s approval for the transfer of the 6.25% interest to Africa Oil SA Corp.;  
$4.0 million upon the completion of a farm-out deal to a third party; and  
$1.5 million upon spudding of the first exploration well on the Block.  
The first tranche was paid during 2023, the second and third tranches were paid during 2024.  
On July 26, 2024, the Company signed an agreement with Eco to acquire an additional 1.0% interest in Block 3B/4B from Azinam  
Limited, Eco’s wholly owned subsidiary, in exchange for all common shares and warrants over common shares held by the Company  
in Eco. On January 13, 2025, the Company announced that it had completed this transaction. The Company’s interest in Block 3B/4B  
increased by 1.0% to 18.0% and the Company ceased to be a shareholder in Eco. Africa Oil will benefit from the carry agreed between  
Eco, TotalEnergies and QatarEnergy for this incremental interest.  
Transactions with Impact:  
On March 24, 2023, the Company subscribed for 39,455,741 shares in Impact for $31.4 million, payable in two tranches, and directly  
following the transaction the Company held 31.1% of the enlarged share capital in Impact. The first tranche of $14.9 million was paid  
on April 21, 2023, and the final tranche of $16.5 million was paid on July 21, 2023.  
On October 6, 2023, the Company subscribed for 16,524,058 shares in Impact for $13.0 million and directly following the transaction  
the Company continued to hold 31.1% of the enlarged share capital in Impact.  
Transaction with Director:  
On November 23, 2023, the Company entered into an arm’s length agreement with Andrew Bartlett to acquire 106,500 shares in  
Impact at a price of £0.65 per share for a total amount of £69,225. This amount was paid during 2023 and the transaction completed  
on January 16, 2024.  
PAGE 27  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
Remuneration of Directors and Senior Management:  
Remuneration of Non-Executive Directors and Senior Management includes all amounts earned and awarded to the Company’s  
Board of Directors and Senior Management. Senior Management includes the Company’s President and Chief Executive Officer, Chief  
Financial Officer, Chief Commercial Officer, Chief Operating Officer, Chief Technical Officer and the Chief Legal Officer.  
Directors’ fees include Board and Committee Chair retainers. Management’s short-term wages and benefits include salary, benefits,  
bonuses and any other cash-based compensation earned or awarded during the year. Share-based compensation includes expenses  
related to the Company’s share purchase option plan as well as the Long-Term Incentive Plan.  
December 31,  
2024  
December 31,  
2023  
For the years ended  
Non-Executive Directors' fees  
0.5  
0.6  
7.3  
0.5  
8.9  
0.5  
1.1  
Non-Executive Directors' share-based compensation  
Managements’ short-term wages and benefits  
Managements’ share-based compensation  
5.4  
6.5  
13.5  
COMMITMENTS AND CONTINGENCIES  
The following commitments and contingencies are representative of AOC’s net obligations at the effective date of the MD&A.  
PRIME OIL & GAS COÖPERATIEF U.A:  
Under the Prime Sale and Purchase Agreement completed on January 14, 2020, a deferred payment of $118.0 million, subject to  
adjustment, may be due to the seller contingent upon the timing of the final PML 52 tract participation in the Agbami field. The signing  
of the Securitization Agreement by Prime in 2021 led the Company reassessing its view of the likelihood of making a contingent  
consideration payment to the seller. The signing of the Securitization Agreement by Prime does not constitute a redetermination of the  
tract participation and therefore does not trigger the payment of a contingent consideration under the Sale and Purchase Agreement  
but, at the Company’s discretion, could trigger discussions with the seller. The outcome of this process is uncertain. In 2021, the  
Company recorded $32.0 million as contingent consideration and increased this to $37.8 million in the year ended December 31,  
2023, and to $40.4 million in the years ended December 31, 2024, increasing the Company’s investment in Prime.  
WITHDRAWAL FROM KENYA:  
On May 23, 2023, the Kenya entities along with TotalEnergies submitted withdrawal notices to the remaining joint venture party on  
Blocks 10BB, 13T and 10BA in Kenya, to unconditionally and irrevocably, withdraw from the entirety of the JOAs and PSCs for these  
concessions. The Company concurrently submitted notices to Ministry of Energy and Petroleum, requesting the government’s consent  
to transfer all of its rights and future obligations under the PSCs to its remaining joint venture party. Government consent to the transfer  
remained outstanding as at December 31, 2024. In accordance with the JOA and PSC the Company retains economic participation for  
activities prior to June 30, 2023, which might result in additional costs for the Company. The Company continues to monitor the claim  
made against the operator by local communities in relation to past operations which may relate to the period prior to June 30, 2023.  
No provision has been recognized for this as at December 31, 2024.  
CRITICAL ACCOUNTING ESTIMATES  
The Company’s critical accounting estimates are defined as those estimates that have a significant impact on the portrayal of its financial  
position and operations and that require management to make judgements, assumptions and estimates in the application of IFRS  
Accounting Standards. Judgements, assumptions and estimates are based on historical experience and other factors that management  
believes to be reasonable under current conditions. As events occur and additional information is obtained, these judgements,  
assumptions and estimates may be subject to change.  
USE OF ESTIMATES  
The preparation of the consolidated financial statements in conformity with IFRS Accounting Standards requires management to make  
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities  
as at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting  
period. Such estimates include unsettled transactions and events as of the date of the consolidated financial statements. Accordingly,  
actual results may differ from these estimated amounts as future confirming events occur. Significant estimates used in the preparation  
of the consolidated financial statements include, but are not limited to, recovery of exploration costs capitalized in accordance with  
IFRS Accounting Standards, equity method accounting, valuation and impairment of equity investments and contingent consideration  
arising from the acquisition of Prime.  
The Company’ material accounting policies can be found in the Company’s Consolidated Financial Statements for the year ended  
December 31, 2024.  
PAGE 28  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
CRITICAL ACCOUNTING ESTIMATES - CONTINUED  
INTANGIBLE EXPLORATION ASSETS  
The Company capitalizes costs related to the acquisition of a license interest, directly attributable general and administrative costs,  
expenditures incurred in the process of determining oil and gas exploration targets, and exploration drilling costs. All exploration  
expenditures that related to properties with common geological structures and with shared infrastructure are accumulated together  
within intangible exploration assets. Costs are held un-depleted until such time as the exploration phases on the license area are  
complete or commercially viable reserves have been discovered and extraction of those reserves is determined to be technically  
feasible. The determination that a discovery is commercially viable, and extraction is technically feasible requires judgement.  
Where results of exploration drilling indicate the presence of hydrocarbons which are ultimately not considered commercially viable,  
all related costs are recognized in the Consolidated Statement of Net (Loss)/ Income and Comprehensive (Loss)/ Income. If commercial  
reserves are established and technical feasibility for extraction demonstrated, then the related capitalized intangible exploration costs  
are transferred into the smallest group of assets that generate cash inflows from continuing use that are largely independent of the  
cash inflows of other assets or groups of assets (CGU) within intangible exploration assets. The allocation of the Company’s assets into  
CGUs requires judgement.  
Intangible exploration assets are assessed for impairment when they are reclassified to property and equipment, and also if facts and  
circumstances suggest that the carrying amount exceeds the recoverable amount.  
The recoverable amount of an asset or a CGU is the greater of its value in use and its fair value less costs to dispose. In assessing  
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current  
market assessments of the time value of money and the risks specific to the asset. Value in use is generally computed by reference to  
the present value of the future cash flows expected to be derived from production of proven and probable reserves. In determining  
fair value less costs to dispose, recent market transactions are taken into account, if available. In the absence of such transactions, an  
appropriate valuation model is used.  
The key assumptions the Company uses for estimating future cash flows are the quantity of contingent resources, future commodity  
prices, expected production volumes, future operating and development costs, likelihood of a successful farm out process and  
subsequent timing of FID and discount rate. The estimated useful life of the CGU, the timing of future cash flows and discount rates are  
also important assumptions made by management.  
The changing worldwide demand for energy and the global advancement of alternative sources of energy could result in a change  
in the assumptions used to determine the recoverable amount and could affect estimating the future cash flows which could impact  
carrying amount of the Company’s intangible exploration assets. The timing of when global energy markets transition from carbon-  
based sources to alternative energy sources is highly uncertain. Environmental considerations are built into our estimates through  
the use of key assumptions in estimating fair value including future commodity prices and discount rates. The energy transition could  
impact the future prices of commodities and discount rates used to appraise oil and gas projects. Pricing assumptions used in the  
determination of recoverable amounts incorporate markets expectations and the evolving worldwide demand for energy.  
EQUITY METHOD  
Investments in joint ventures and investments in associates are accounted for using the equity method. Investments of this nature are  
recorded at original cost. Investments in joint ventures or associates which arise from a loss in control of a subsidiary are recorded at  
fair value on the date of the loss of control. The investment is adjusted periodically for the Company’s share of the profit or loss of the  
investment after the date of acquisition. The investor’s share of the profit or loss of the investee is also recognized in the Company’s  
Consolidated Statement of Net (Loss)/ Income and Comprehensive (Loss)/ Income. Distributions received reduce the carrying amount  
of the investment.  
Additionally, estimates associated with investments in joint ventures include the determination of amounts allocated to non-current  
assets as well as any negative goodwill associated with the acquisition.  
IMPAIRMENT OF JOINT VENTURES AND ASSOCIATES  
The amounts for investments in joint ventures and associates represent the Company’s equity interest in other entities, where there  
is either joint control or significant influence. The Company assesses investments in joint ventures and associates for an objective  
evidence of impairment considering changes in circumstances or events which indicate that the carrying value may not be recoverable.  
The process of determining whether there is an objective evidence of impairment or calculating the recoverable amount requires  
judgement.  
The most material area in which the Company has applied judgement in the period is in relation to the investment in Prime. In assessing  
whether there have been any objective evidence of impairment the Company has considered the implied value of its investment in  
Prime derived from the Proposed Reorganization. The consideration for the Proposed Reorganization consists of a fixed number of  
shares in the Company and the implied value of the transaction has been calculated using the Company’s share price as per the end of  
the reporting period and the USD/CAD exchange rate as per the end of the reporting period as this is considered a Level 1 valuation  
method under IFRS Accounting Standards.  
PAGE 29  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
CONTINGENT CONSIDERATION  
Contingent consideration formed part of the overall consideration for the acquisition of Prime. At the date of acquisition, an estimate  
of the contingent consideration is determined and included as part of the cost of the acquisition.  
Subsequent to acquisition, contingent consideration can be treated using two acceptable methods, the cost-based approach and  
the fair value-based approach. The Company have determined the cost-based approach to give the best estimate of the value of the  
contingent consideration. Any revisions to the contingent consideration estimates, after the date of acquisition, are accounted for as  
changes in estimates in accordance with IAS 8, to be accounted for on a prospective basis. The change in the liability, as a result of the  
revised cash flows, would be adjusted to the cost of the investment and, in accordance with paragraph 37 of IAS 8, recognized as part  
of the investment’s carrying amount rather than in profit or loss.  
The estimates involved in assessing the value of the contingent consideration include the expected timing of payments, the expected  
settlement value, the likelihood of settlement and the probability of the assessed outcomes occurring. There is significant judgement  
used in the determination of these estimates.  
INTERNAL FINANCIAL REPORTING AND DISCLOSURE  
CONTROLS  
DISCLOSURE CONTROLS AND PROCEDURES  
Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by the  
Company in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed,  
summarized and reported within the time periods specified in the securities legislation and include controls and procedures designed  
to ensure that information required to be disclosed by the Company in its annual filings, interim filings or other reports filed or submitted  
under securities legislation is accumulated and communicated to the Company’s management, including its Chief Executive Officer  
and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.  
Management, including the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and  
operation of the Company’s disclosure controls and procedures. As of December 31, 2024, the Chief Executive Officer and Chief  
Financial Officer have each concluded that the Company’s disclosure controls and procedures, as defined in NI 52-109 - Certification of  
Disclosure in Issuer’s Annual and Interim Filings, are effective to achieve the purpose for which they have been designed.  
INTERNAL CONTROLS OVER FINANCIAL REPORTING  
Internal controls over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting  
and the preparation of financial statements in accordance with IFRS Accounting Standards. Management is also responsible for the  
design of the Company’s internal control over financial reporting in order to provide reasonable assurance regarding the reliability of  
financial reporting and the preparation of financial statements for external purposes in accordance with IFRS Accounting Standards.  
The Company’s internal controls over financial reporting include policies and procedures that: pertain to the maintenance of records  
that, in reasonable detail accurately and fairly reflect the transactions and disposition of assets; provide reasonable assurance that  
transactions are recorded as necessary to permit preparation of the financial statements in accordance with IFRS Accounting Standards  
and that receipts and expenditures are being made only in accordance with authorization of management and directors of the  
Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition  
of assets that could have a material effect on the financial statements.  
Management, including the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and  
operation of the Company’s internal controls over financial reporting. As at December 31, 2024, the Chief Executive Officer and Chief  
Financial Officer have each concluded that the Company’s internal controls over financial reporting,as defined in NI 52-109 - Certification  
of Disclosure in Issuer’s Annual and Interim Filings, are effective to achieve the purpose for which they have been designed. Because  
of their inherent limitations, internal controls over financial reporting can provide only reasonable assurance and may not prevent or  
detect misstatements. Furthermore, projections of any evaluation of effectiveness to future periods are subject to the risk that controls  
may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may  
deteriorate.  
PAGE 30  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
ADVISORY REGARDING OIL AND GAS INFORMATION  
The terms boe (barrel of oil equivalent) and MMboe (millions of barrels of oil equivalent) are used throughout this report. Such terms may  
be misleading, particularly if used in isolation. The conversion ratio of six thousand cubic feet per barrel (6 Mcf:1 Bbl) of conventional  
natural gas to barrels of oil equivalent and the conversion ratio of 1 barrel per six thousand cubic feet (1 Bbl:6 Mcf) of barrels of oil to  
conventional natural gas equivalent is based on an energy equivalency conversion method primarily applicable at the burner tip and  
does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared  
to conventional natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be  
misleading as an indication of value.  
In this report, references are made to historical and potential future oil production in Nigeria and Kenya. In all instances these references  
are to light and medium crude oil category in accordance with NI 51-101 and the COGE Handbook.  
Reserves are estimated remaining quantities of petroleum anticipated to be recoverable from known accumulations, as of a given date,  
based on the analysis of drilling, geological, geophysical, and engineering data; the use of established technology; and specified  
economic conditions, which are generally accepted as being reasonable. Reserves are further classified according to the level of  
certainty associated with the estimates and may be sub-classified based on development and production status. Proved Reserves are  
those quantities of petroleum, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be  
economically producible from a given date forward, from known reservoirs and under existing economic conditions, operating methods  
and government regulations. Probable Reserves are those additional quantities of petroleum that are less certain to be recovered than  
Proved Reserves, but which, together with Proved Reserves, are as likely as not to be recovered. Possible Reserves are those additional  
reserves that are less certain to be recovered than probable reserves. It is unlikely that actual remaining quantities recovered will exceed  
the sum of the estimated proved plus probable plus possible reserves.  
RISK FACTORS  
With Board oversight, the Company proactively manages the identification, assessment and mitigation of risks, many of which are  
common to operations in the oil and gas industry as a whole, whilst others are unique to the Company. The realization of any of the risks  
listed below could have a material adverse effect on the Company’s business, financial condition, reserves and results of operations,  
such list being non-exhaustive.  
The risks noted in the risk factors section comprises those that can materially affect the figures presented and disclosures in the  
Financial Statements and MD&A. The Company’s Annual Information Form contains a more comprehensive list of risks that can affect  
the Company.  
RISKS RELATING TO THE PROPOSED REORGANIZATION  
There are a number of risks and uncertainties associated with the Proposed Reorganization. These include risks associated with the  
completion of the Proposed Reorganization and the expected timeframe to achieve completion as well as the additional obligations  
assumed by the Company in connection with the Proposed Reorganization and the restrictions imposed on the Company while the  
Proposed Reorganization is pending. These risks are described in more detail in the Risk Factors section of the Company’s Management  
Information Circular dated September 13, 2024.  
INCREASED COSTS AND SUPPLY DISRUPTION  
A failure to secure the services and equipment necessary for the Company’s operations for the expected price, on the expected  
timeline, or at all, may have an adverse effect on the Company’s financial performance and cash flows. The Company’s operating  
and capital costs could escalate and become uncompetitive due to supply chain disruptions, inflationary cost pressures, equipment  
limitations, escalating supply costs, and additional government intervention through stimulus spending or additional regulations.  
The Company’s inability to manage costs may impact project returns and future development decisions, which could have a material  
adverse effect on its financial performance and cash flows. In addition, with rising inflation levels combined with global cost of living  
expenses, the Company may be faced with the challenge of how to attract and retain employees. Though Africa Oil does not directly  
control procurement decisions associated with all of our assets, the Company works with its JV parties to ensure adequate contingency  
for cost inflation is incorporated into capital and operating budgets and that costs are controlled within budget.  
PRICES, MARKETS AND MARKETING OF CRUDE OIL AND NATURAL GAS  
Crude oil and natural gas are commodities whose prices are determined based on world demand, supply and other factors, all of  
which are beyond the control of the Company. World prices for oil and gas have fluctuated widely in recent years. Any material decline  
in prices could have an adverse effect on the Company’s business and prospects. The Company may be required by government  
authorities to limit production due to OPEC+ quotas from time to time. The conflicts in Ukraine and the Middle East have impacted  
global markets and may continue to result in increased volatility in financial markets and commodity prices. The Company does not  
have a direct exposure to operations in Ukraine and the Middle East.  
The Company may undertake hedging activities when efficient to do so, however, hedging may not fully mitigate, in whole or in part,  
the risk and effect of lower commodity prices.  
The Company or its investee company’s ability to market its oil and gas may depend upon its ability to acquire space on vessels or in  
pipelines that deliver oil and gas to commercial markets. The Company could also be affected by deliverability uncertainties related  
to the proximity of its reserves to pipelines and processing and storage facilities and operational issues affecting such pipelines and  
facilities as well as government regulation relating to prices, taxes, royalties, land tenure, allowable production, the export of oil and gas  
and many other aspects of the oil and gas business.  
PAGE 31  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
RISK FACTORS - CONTINUED  
LIQUIDITY AND CASH FLOW  
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. Liquidity describes a  
company’s ability to access cash. Companies operating in the upstream oil and gas industry require sufficient cash in order to fulfil their  
work commitments in accordance with contractual obligations, and to be able to potentially acquire strategic oil and gas assets and  
face potentially unexpected liabilities.  
The Company could potentially issue debt or equity, extend its debt maturities and enter into farmout agreements to ensure it has  
sufficient available funds to meet current and foreseeable financial requirements. Concerns around climate change have resulted in a  
number of lenders and investors moving away from financing oil and gas activities, and the Company may find access to capital limited,  
more expensive or made contingent upon environmental performance standards.  
The Company periodically receives dividends from Prime related to the Company’s shareholding in Prime, its main source of income,  
the amount and timing of which the Company does not control. However, a significant reduction, infrequent distributions, or no  
payment of Prime’s dividends to the Company could significantly reduce the amount of the Company’s anticipated cash flow and could  
also expose the Company to financial risk.  
The Company actively monitors its liquidity to ensure that its cash flows and working capital are adequate to support these financial  
obligations and the Company’s capital programs. The Company will also adjust the pace of its activities to manage its liquidity position.  
Notwithstanding any mitigation efforts, the Company remains exposed to erosion of its balance sheet and revenues and may have  
difficulty in securing necessary funding, which may lead to insufficient liquidity.  
PRIME DIVIDENDS  
The Company periodically receives dividends from Prime related to the Company’s shareholding in Prime, which is its main source of  
income. A significant reduction, infrequent distributions, or no payment of Prime’s dividends to the Company could have a material  
adverse effect on the Company’s business, liquidity and financial condition. Such results could occur due to, among other things, the  
following:  
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
decline in the demand for oil and gas;  
reduction of OPEC+ quotas;  
changes to the applicable tax and other laws and regulations in Nigeria;  
project joint venture party consensus;  
Prime’s off-takers defaulting on forward sale agreements or banks defaulting on hedging agreements;  
significant or extended declines in oil and gas prices;  
Prime’s inability to hedge the production of future assets;  
significant capital cost overruns adversely impacting Prime’s cashflows;  
significant project delays adversely impacting Prime’s future production and cashflows;  
capital or liquidity constraints experienced by Prime, including restrictions imposed by lenders;  
accounting delays or adjustments for prior periods;  
shortages of, or delays in obtaining skilled personnel or equipment, including drilling rigs;  
delays in the sale or delivery of products;  
title defects; and  
global health emergencies impacting operations and significantly reducing oil and gas demand.  
CREDIT FACILITIES  
The Company is party to credit facilities. The terms of the facility contain covenants and restrictions on the ability of the Company to,  
among other things, incur or lend additional debt, pay dividends and make restricted payments, and encumber its assets. The failure of  
the Company to comply with the covenants contained in the facility or to repay or refinance the facility by its maturity date could result  
in an event of default, which could, through acceleration of debt, enforcement of security or otherwise, materially and adversely affect  
the operating results and financial condition of the Company.  
FINANCIAL STATEMENTS PREPARED ON A GOING CONCERN BASIS  
Africa Oil’s financial statements have been prepared on a going concern basis under which an entity is considered to be able to  
realize its assets and satisfy its liabilities in the ordinary course of business. Africa Oil’s operations to date have been financed by equity  
financing, dividends received from equity investments, debt financing and the completion of working interest farmout agreements.  
Africa Oil’s future operations may be dependent upon the identification and successful completion of additional equity or debt  
financing, the achievement of profitable operations (and profitable operations with equity investments) or other transactions. There  
can be no assurances that the Company will be successful in completing additional financings, achieving profitability or completing  
future transactions. The consolidated financial statements do not give effect to any adjustments relating to the carrying values and  
classification of assets and liabilities that would be necessary should Africa Oil be unable to continue as a going concern.  
PAGE 32  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
RISK FACTORS - CONTINUED  
SUBSTANTIAL CAPITAL REQUIREMENTS  
Africa Oil expects to make substantial capital expenditures for exploration, development and production of oil and gas reserves in the  
future. The Company’s ability to access the equity or debt markets may be affected by any prolonged market instability. The inability  
to access the equity or debt markets for sufficient capital, at acceptable terms and within required time frames, could have a material  
adverse effect on the Company’s financial condition, results of operations and prospects.  
To finance its future acquisition, exploration, development and operating costs, the Company may require financing from external  
sources, including from the issuance of new shares, issuance of debt or execution of working interest farmout agreements. There can  
be no assurance that such financing will be available to the Company or, if available, that it will be offered on terms acceptable to the  
Company.  
If additional financing is raised through the issuance of equity or convertible debt securities, control of the Company may change and  
the interests of shareholders in the net assets of the Company may be diluted. If unable to secure financing on acceptable terms, the  
Company may have to cancel or postpone certain of its planned exploration and development activities which may ultimately lead to  
the Company’s inability to fulfil the minimum work obligations under the terms of its various concessions. Availability of capital will also  
directly impact the Company’s ability to take advantage of acquisition opportunities.  
CURRENT GLOBAL FINANCIAL CONDITIONS  
Global financial conditions have always been subject to volatility. These factors may impact the ability of the Company to obtain equity  
or debt financing in the future, and, if obtained, on terms favorable to the Company. Increased levels of volatility and market turmoil can  
adversely impact the Company’s operations and the value, and the price of the Common Shares could be adversely affected.  
FOREIGN CURRENCY EXCHANGE RATE RISK  
The Company is exposed to changes in foreign exchange rates as expenses in international subsidiaries, oil and gas expenditures, or  
financial instruments may fluctuate due to changes in rates. The Company’s exposure is partially offset by sourcing capital projects and  
expenditures in US dollars. The Company had no forward exchange contracts in place as at December 31, 2024.  
INTEREST RATE RISK  
The Company has borrowed in the past and has a utilized standby credit facility. Interest payments under potential future borrowings  
could be exposed to volatility in interest rates that could constrain the company’s cashflows. The Company’s main income is derived  
from its investment in Prime that has outstanding borrowings. Prime’s cash flows can be impacted adversely by increases in interest  
rates that in turn could constrain dividend distributions to Africa Oil.  
CREDIT RISK  
Credit risk is the risk of loss if counterparties do not fulfil their contractual obligations. Most of the Company’s credit exposure relates to  
amounts due from its JV parties. The risk of the Company’s JV parties defaulting on their obligations per their respective joint operating  
and farmout agreements is mitigated as there are contractual provisions allowing the Company to default JV parties who are non-  
performing and reacquire any previous farmed out working interests. The maximum exposure for the Company is equal to the sum of  
its cash, restricted cash, and accounts receivable. A portion of the Company’s cash is held by banks in foreign jurisdictions where there  
could be increased exposure to credit risk.  
LIMITATION OF LEGAL REMEDIES  
Securities legislation in certain of the provinces and territories of Canada provides purchasers with various rights and remedies when a  
reporting issuer’s continuous disclosure contains a misrepresentation and ongoing rights to bring actions for civil liability for secondary  
market disclosure. Under the legislation, the directors would be liable for a misrepresentation. It may be difficult for investors to collect  
from the directors who are resident outside Canada on judgements obtained in courts in Canada predicated on the purchaser’s  
statutory rights and on other civil liability provisions of Canadian securities legislation.  
DECOMMISSIONING  
The Company is responsible for compliance with all applicable laws, regulations and contractual requirements regarding the  
decommissioning, abandonment and reclamation of the Company’s assets at the end of their economic life, the costs of which  
may be substantial. It is not possible to predict these costs with certainty since they will be a function of requirements at the time of  
decommissioning, abandonment and reclamation and the actual costs may exceed current estimates. Laws, regulations and contractual  
requirements about abandonment and decommissioning may be implemented or amended in the future.  
SHAREHOLDER CAPITAL RETURNS  
The Company has implemented a base dividend policy and has in the past engaged in share repurchases as part of its commitment to  
return capital to the shareholders. The amount and frequency of future returns cannot be guaranteed and the Company’s performance  
in this regard is subject to its financial and operational performance that are subject to the risks already outlined. The declaration,  
timing, amount and payment of dividends remain at the discretion of the Company’s Board. Also, the amount and the pace of share  
buybacks, if implemented, are at the discretion of the Board.  
PAGE 33  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
RISK FACTORS - CONTINUED  
RISKS INHERENT IN OIL AND GAS EXPLORATION, DEVELOPMENT, AND PRODUCTION  
Oil and gas operations involve many risks, which, even with the combination of experience, knowledge and careful evaluation may not  
be able to overcome. The long-term commercial success of Africa Oil depends on its ability to find, acquire, develop and commercially  
produce oil and gas reserves. No assurance can be given that the Company will be able to locate satisfactory properties for acquisition  
or participation. Moreover, if such acquisitions or participations are identified, the Company may determine that current markets, terms  
of acquisition and participation or pricing conditions make such acquisitions or participations uneconomic. It is difficult to project  
the costs of implementing an exploratory, appraisal or development drilling program due to the inherent uncertainties of drilling in  
unknown formations, the costs associated with encountering various drilling conditions such as over pressured zones, tools lost in the  
hole, equipment failures or malfunctions and changes in drilling plans and locations as a result of prior exploratory wells or additional  
seismic data and interpretations thereof. Without the continual addition of new reserves, any existing reserves associated with the  
Company’s oil and gas assets at any particular time, and the production therefrom, could decline over time as such existing reserves  
are exploited. There is a risk that additional commercial quantities of oil and gas may not be discovered or acquired by the Company.  
Africa Oil’s business is subject to all the risks and hazards inherent in businesses involved in the exploration for, and the acquisition,  
development, production and marketing of, oil and gas, many of which cannot be overcome even with a combination of experience  
and knowledge and careful evaluation. The risks and hazards typically associated with oil and gas operations include fire, explosion,  
blowouts, sour gas releases, pipeline ruptures and oil spills, each of which could result in substantial damage to oil and gas wells,  
production facilities, other property, the environment or personal injury, and such damages may not be fully insurable.  
RESERVES AND RESOURCES VOLUMES  
There are many uncertainties inherent in estimating quantities of oil and natural gas reserves and resources (contingent and prospective)  
and the future cash flows attributed to such reserves and resources. The actual production, revenues, taxes and development and  
operating expenditures with respect to the reserves and resources associated with the Company’s assets will vary from estimates  
thereof and such variations could be material. Estimates of reserves that may be developed and produced in the future are often based  
upon volumetric calculations and upon analogy to similar types of reserves rather than actual production history. There is uncertainty  
that it will be commercially viable to produce any portion of the contingent resources. Actual future net cash flows will be affected by  
other factors, such as actual production levels, supply and demand for oil and natural gas, curtailments or increases in consumption by  
oil and natural gas purchasers, changes in governmental regulation or taxation and the impact of inflation on costs.  
GOVERNMENT REGULATIONS AND TAX RISK  
The Company may be adversely affected by changes to applicable laws to which it is subject, and its host governments may implement  
new applicable laws, modify existing ones, or interpret them in a manner that is detrimental to the Company. Such changes to the laws  
to which the Company is subject could, amongst other things, result in a windfall tax, an increase in existing tax rates or the imposition  
of new ones or the Company may be subject to tax assessments, all of which on their own or taken together could have a material  
adverse effect on the Company’s business, financial condition, results of operations and prospects of the Company’s oil and gas assets.  
As has become customary in Nigeria since 2019, the annual budget for Nigeria has been accompanied by a proposed finance bill that  
supports the revenue needs indicated in the annual budget. This bill could include changes to tax laws, including laws that can affect  
directly or indirectly the oil and gas industry.  
INVESTMENTS IN ASSOCIATES AND INVESTMENTS IN JOINT VENTURES  
The Company has invested in other frontier oil and gas exploration companies that face similar risks and uncertainties, which could  
have a material adverse effect on their businesses, prospects and results of operations. Such risks include, without limitation, equity  
risk, liquidity risk, commodity price risk, credit risk, currency risk, foreign investment risk, and changes in environmental regulations,  
economic, political or market conditions, or the regulatory environment in the countries in which they operate. The associates or joint  
ventures are entities in which the Company has some influence, including through its representation on their boards, but given its  
equal or minority interest, no or limited control over their decisions, including, without limitation, financial and operational policies, the  
Company has no or limited control over outcomes, performance and governance. The Company’s access to information is subject to  
the contractual provisions of shareholder agreements. The Company is reliant on the information provided by investments and may  
not have the ability to independently verify such information. The Company’s investments are not diversified over different types of  
investments and industries, rather, they are concentrated in one type of investment. If an associated company or jointly controlled entity  
in which the Company has invested fails, liquidates, or becomes bankrupt, the Company could face the potential risk of loss of some,  
or all, of its investments, and may be unable to recover any of its investments.  
The Company’s share price performance is subject to timely communication of financial and operational results. The Company is reliant  
on its associates and joint ventures for timely and accurate disclosures of material updates. Although the Company has procedures in  
place to maximise its oversight of such disclosures, including representation on the boards of its investee companies, failure to mitigate  
delays and/or inaccuracies in such disclosures could expose the Company to regulatory sanctions and shareholder legal action that  
could adversely impact the Company’s finances and reputation.  
PAGE 34  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
RISK FACTORS - CONTINUED  
INTERNATIONAL OPERATIONS  
The Company participates in oil and gas projects located in emerging markets, primarily in Africa. Oil and gas exploration, development  
and production activities in these emerging markets are subject to significant political, economic, and other uncertainties that may  
adversely affect the Company’s operations. The Company could be adversely affected by changes in applicable laws and policies  
in the countries where the Company has interests. Additional uncertainties include, but are not limited to, the risk of war, terrorism,  
expropriation, civil unrest, nationalization, renegotiation or nullification of existing or future concessions and contracts, the imposition  
of international sanctions, a change in crude oil or gas pricing policies, changes to taxation laws and policies, assessments and audits  
(including income tax) against the Company by regulatory authorities, difficulty or delays in obtaining necessary regulatory approvals,  
risks associated with potential future legal proceedings, and the imposition of currency controls. These uncertainties, all of which are  
beyond the Company’s control, could have a material adverse effect on the Company’s business, prospects and results of operations.  
In addition, if legal disputes arise related to oil and gas concessions acquired by the Company, they could be subject to the jurisdiction  
of courts other than those of Canada. The Company’s recourse may be very limited in the event of a breach by a government or  
government authority of an agreement governing a concession in which the Company acquires an interest. The Company may require  
licenses or permits from various governmental authorities to carry out future exploration, development and production activities. There  
can be no assurance that the Company will be able to obtain all necessary licenses and permits when required.  
DIFFERENT LEGAL SYSTEM AND LITIGATION  
The Company’s exploration, development and production activities are located in countries with legal systems that in various degrees  
differ from that of Canada. Rules, regulations and legal principles may differ in respect of matters of substantive law and of such matters  
as court procedure and enforcement. Almost all material exploration and production rights and related contracts of the Company are  
subject to the national or local laws and jurisdiction of the respective countries in which the operations are carried out. This means that  
the Company’s ability to exercise or enforce its rights and obligations may differ between different countries and also from what would  
have been the case if such rights and obligations were subject to Canadian law and jurisdiction.  
The Company’s operations are, to a large extent, subject to various complex laws and regulations as well as detailed provisions in  
concessions, licenses and agreements that often involve several parties. If the Company was to become involved in legal disputes  
in order to defend or enforce any of its rights or obligations under such concessions, licenses, and agreements or otherwise, such  
disputes or related litigation could be costly, time consuming and the outcome would be highly uncertain. Even if the Company  
ultimately prevailed, such disputes and litigation may still have a substantially negative effect on the Company’s business, assets,  
financial conditions, and its operations.  
BRIBERY, CORRUPTION AND FRAUD  
The Company is subject to various laws which aim to combat bribery, corruption and fraud, including the Corruption of Foreign Public  
Officials Act (Canada) and the Bribery Act 2010 (United Kingdom) and the Economic Crime and Corporate Transparency Act 2023  
(United Kingdom). Failure to comply with such laws could subject the Company to, among other things, civil and criminal penalties,  
other remedial measures and legal expenses and reputational damage, each of which could adversely affect the Company’s business,  
results in operations, and financial condition. Weaknesses in the anti-corruption legal and judicial system of certain countries may  
undermine the Company’s or a host government’s capacity to effectively detect, prevent and sanction corruption and fraud. To mitigate  
this risk, the Company has implemented an anti-corruption compliance and onboarding program for anyone that does business with  
the Company, anti-corruption training initiatives for its personnel and consultants, and an anti-corruption policy for its personnel, and  
consultants. However, the Company cannot guarantee that its personnel, contractors, or business partners have not in the past or will  
not in the future engage in conduct undetected by the onboarding processes and procedures adopted by the Company, and it is  
possible that the Company, its personnel or contractors, could be subject to investigations or charges related to bribery, corruption or  
fraud as a result of actions of its personnel or contractors.  
SHARED OWNERSHIP AND DEPENDENCY ON JV PARTIES  
The Company’s operations are primarily conducted together with one or more JV parties through contractual arrangements, including  
unincorporated associations. In such instances, the Company may be dependent on, or affected by, the due performance and financial  
strength of its JV parties. If a JV party fails to perform or becomes insolvent, the Company may, among other things, risk losing rights or  
revenues or incur additional obligations or costs, experience delays, or be required to perform such obligations in place of its JV party.  
The Company and its JV parties may also, from time to time, have different opinions on how to conduct certain operations or on what  
their respective rights and obligations are under a certain agreement. If a dispute were to arise with one or more JV parties relating to  
a project, such dispute may have material adverse effect on the Company’s or investee company’s operations relating to such project.  
RISKS RELATING TO CONCESSIONS, LICENSES AND CONTRACTS  
Africa Oil’s operations are based on a relatively limited number of concession agreements, licenses and contracts. The rights and  
obligations under such concessions, licenses and contracts may be subject to interpretation and could also be affected by, among other  
things, matters outside the control of Africa Oil. In case of a dispute, it cannot be certain that the view of the Company would prevail  
or that the Company otherwise could effectively enforce its rights which, in turn, could have significantly negative effects on Africa Oil.  
Also, if the Company or any of its JV parties were found to have failed to comply with their obligations or liabilities under a concession,  
license or contract, including record-keeping, budgeting, and time scheduling requirements, the Company’s or JV parties rights under  
such concession, license or contract may be terminated or otherwise relinquished in whole or in part. The Company cannot guarantee  
that requirements are adequately met by its JV parties, which could bring an increased risk of impairment and reduced future cash flow.  
In May 2023, the Company submitted notices to withdraw from its concessions on Blocks 10BB, 13T and 10BA in Kenya. The Company’s  
withdrawal from the concessions is subject to approvals from the Kenyan authorities and, while the Company is working with its JV  
parties and the authorities to effect a smooth withdrawal process, there can be no certainty that such approvals will be forthcoming on  
terms acceptable to all parties.  
PAGE 35  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
RISK FACTORS - CONTINUED  
RISKS RELATING TO INFRASTRUCTURE  
Africa Oil is dependent on having available and functioning infrastructure relating to the properties and licenses on which it operates,  
such as roads, power and water supplies, pipelines and gathering systems, supply bases and associated services.  
The amount of oil and gas that the Company can produce, and sell is subject to accessibility, availability, proximity and capacity of  
gathering, processing and pipeline systems. The lack of availability of capacity or a failure in any of the gathering, processing and  
pipeline systems, and in particular the processing facilities could result in the Company’s inability to realize the full economic potential  
of its production or in a reduction of the price offered for the Company’s production. Any significant change in market factors, terms  
of use or other conditions affecting these infrastructure systems and facilities, as well as any delays in constructing new infrastructure  
systems and facilities could harm the Company’s business financial condition, results of operations, cash flows and future prospects.  
In Nigeria, gas export relies on the continued safe operations at the Nigeria LNG facility. Gas export restrictions could have an adverse  
effect on oil production, due to reductions in overall facility production to minimise flaring of associated gas. The supply chain for  
offshore is dependent upon existing ports and onshore infrastructure. Several factors, including social unrest onshore, have the  
potential to disrupt both the gas processing facilities and the upstream supply chain which could have detrimental impacts on Prime’s  
cashflow and subsequent dividend payments to Africa Oil.  
In Equatorial Guinea, exploration efforts in Block EG-31 are targeting gas prospects located close to existing gas export and processing  
facilities. In the event of a discovery, the discovered fluids may not be compatible with the existing processing facilities resulting in  
additional cost which may result in the potential discovery being non-commercial. There may also be insufficient ullage in the facilities  
to accept additional capacity and without appropriate commercial arrangements it may not be possible to produce any potential  
discovery.  
INSURANCE  
The Company’s involvement in oil and gas operations may result in the Company becoming subject to liability for pollution, blow-outs,  
property damage, personal injury or other hazards. While the Company obtains insurance in accordance with industry standards to  
address such risks, the nature of the risks facing the oil and gas industry is such that liabilities might exceed policy limits, the liabilities  
and hazards might not be insurable, or the Company might elect not to insure itself against such liabilities due to high premium costs  
or other reasons. The payment of such uninsured liabilities would reduce the funds available to the Company. The occurrence of a  
significant event that the Company is not fully insured against, or the insolvency of an insurer, could have a material adverse effect on  
the Company’s business, financial condition and results of operations. There can be no assurance that insurance will be available in the  
future.  
CLIMATE RISKS  
MARKET RISKS  
Changing consumer preferences for low carbon sources of energy, transport and products and services may erode demand for oil  
and gas as alternatives come to market and gain scale. Reduced demand for oil and gas may result in stranded reserves or resources  
and negatively impact the Company’s valuation and share price. In addition to limiting the Company’s ability to sell into the market,  
these trends could lead to lower commodity prices in the medium and long-term, putting further pressure on revenues. In the short-  
term, unbalanced investment in traditional vs. new energy technologies and sources, combined with uncertain demand dynamics, may  
lead to commodity price volatility. Supply chains may also become constrained, as suppliers adjust their strategies and product mix in  
response to the energy transition, resulting in increasing costs for some goods and services.  
The Company has conducted scenario analysis, which suggests the current portfolio remains competitive in a low demand environment.  
We update our analysis on a regular basis and ahead of new project sanction to minimize the risk of stranded assets. In order to  
remain resilient in an uncertain and volatile future commodity environment, the Company works with and through its parties to reduce  
operational costs as much as possible without sacrificing health and safety or longer-term efficiency and environmental or strategic  
goals. Additionally, the Company will maintain a prudent budget and financial strategy, including hedging as appropriate, to manage  
medium term oil price volatility ensure the business remains resilient in a low oil price environment.  
LITIGATION RISKS  
Climate-related litigation is a rapidly evolving and increasingly important issue for our industry. The risk of legal challenges could rise  
as the costs of climate change mitigation and adaptation increase, and as more climate laws and agreements are put in place. Climate-  
related litigation could result in liabilities or loss of license related to current or historical activities’ contribution to global emissions.  
We do not consider Africa Oil at immediate risk of climate litigation but are monitoring developments closely. Even if the Company  
is not directly targeted by litigation, operations may be indirectly impacted by outcomes in related cases involving other oil and gas  
companies in jurisdictions where we operate. The Company will seek legal counsel as required to remain abreast of potential legal  
action and its implications for our business.  
PAGE 36  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
REGULATORY RISKS  
Since the ParisAgreement was signed in 2015,countries have steadily enacted policies to enable the transition to a low carbon future and  
meet their Nationally Determined Contributions (NDCs).This includes the governments of countries where Africa Oil conducts business.  
These policies may directly or indirectly increase the cost of doing business in these countries or potentially restrict the Company’s  
ability to operate. Africa Oil regularly monitors the evolving regulatory landscape, both globally and in the Company’s countries of  
operation, to anticipate the impact of new climate-related measures and ensure the Company remains compliant. Additionally, the  
Company is developing a comprehensive energy transition strategy, including measures to minimize operational emissions in line with  
Paris Agreement objectives, which should help the Company to remain aligned with evolving regulatory requirements and minimize  
negative impacts.  
REPUTATIONAL RISK  
Increased scrutiny, pressure and action by environmental activists, non-governmental organizations and other stakeholders may result  
in disruption to operations or loss of license to operate. Such disruption may negatively impact cash flows, returns or the value of our  
portfolio. Similarly, companies within the sector and our supply chain may make emissions performance and climate risk management  
explicit in partner or contract decisions. The Company has not been directly targeted by environmental activists but could be targeted  
in the future. To mitigate this risk, Africa Oil proactively engages with the communities and other stakeholders where the Company  
operates to keep them informed about the impact of our operations on the environment and their livelihoods. The Company also  
ensures proper security is in place to minimize the impact of any potential disruptions and prevent harm to staff, bystanders and assets.  
In addition to environmental activists, numerous banks and large institutional investors have communicated an intention to divest from  
or limit future exposure to fossil fuels, including oil and gas. Increasing investor and lender concerns regarding climate resilience could  
limit access to capital, increase the cost of that capital via higher interest rates or result in direct costs associated with new measures  
to meet investor expectations. Since 2020, Africa Oil has published public climate disclosures aligned with the Taskforce for Climate-  
Related Financial Disclosures (TCFD) recommendations to proactively address investor and other stakeholder concerns regarding  
climate risk exposure. In addition, Africa Oil regularly engages with investors and lenders to understand their climate policies and  
requirements and to inform them about the steps the Company is taking to manage climate risks. This includes development of a  
strategy to minimize operational emissions.  
PHYSICAL RISKS  
Climate change has already resulted in significant shifts in global weather patterns, including an increase in the number and severity  
of heat waves, cold spells, droughts and storms, including hurricanes and tropical cyclones. Longer term, climate change may also  
result in rising sea levels due to melting polar ice caps. The physical effects of climate change have the potential to directly impact the  
Company’s assets and operations. In 2022, the Company contracted a global climate risk analytics company to perform a quantified  
assessment of the physical climate risks facing the Company’s assets under three IPCC climate scenarios: SSP1-2.6 (consistent with 1.8°C  
warming), SSP2-4.5 (consistent with 2.7°C warming) and SSP5-8.5 (consistent with 4.4°C warming). That analysis suggests exposure to  
future changes in physical climate hazards is relatively minimal compared to the historical baseline across all three scenarios. We will  
continue to monitor our assets’ exposure to physical climate risks as our portfolio and the global scientific community’s understanding  
of changing climate patterns evolves.  
OTHER ENVIRONMENTAL RISKS  
The regulatory frameworks in the Company’s countries of operation extend beyond emissions to include broader areas of environmental  
concern, including water management, waste handling, soil pollution and biodiversity protection. These regulations typically include  
environmental licensing and permitting subject to the conduct of Environmental and Social Impact Assessments prior to any new  
exploration or development activity, as well as ongoing monitoring and reporting.  
Non-compliance with environmental regulations can result in fines or permits being revoked, both of which could materially impact the  
Company’s financial position or license to operate. Breaches could also lead to civil or criminal litigation, particularly in cases resulting  
in significant environmental damage.  
The Company is committed to minimizing the broader environmental impact of its activities. The Company acts in compliance with the  
applicable environmental laws and regulations of its countries of operation and manages activities according to good international  
practice. This includes taking a rigorous approach to operational planning, including identifying potential environmental or social  
risks and impacts of operations, and obtaining and maintaining all necessary permits and licenses. The Company also consults with  
stakeholders on environmental issues that may affect them, investigates any environmental incidents, and maintains emergency  
response procedures for protection of the environment.  
The Company assesses and puts measures in place to minimize impact on biodiversity and ecosystem services in line with the  
mitigation hierarchy to ensure that activities lead to no net loss of natural habitats. Where the Company is not the operator, it monitors  
environmental risk management via regular reports from JV parties and operators and participation in quarterly operating and technical  
committee meetings.  
Though the Company endeavors to engage all relevantstakeholders proactivelyand earlyintheproject planningprocess,environmental  
activism is increasing, and in some cases has resulted in delays or disruptions to activities, including delays to permitting where activists  
have challenged permits in courts. Africa Oil has not to date suffered impacts to operations due to environmental activism. However,  
such delays could affect project economics by incurring additional costs or delaying forecast production and revenues.  
The Company does not currently face any environmental fines or charges. However, accidents can occur and the unexpected nature of  
these events makes the timing and scope challenging to quantify with respect to financial impacts.  
PAGE 37  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
FORWARD-LOOKING STATEMENTS  
Certain statements in this document may constitute forward-looking information or forward-looking statements under applicable  
Canadian securities law (collectively “forward-looking statements”). Forward-looking statements are statements that relate to future  
events, including the Company’s future performance, opportunities or business prospects. All statements other than statements of  
historical fact may be forward-looking statements. Statements concerning proven and probable reserves and resource estimates  
may also be deemed to constitute forward-looking statements and reflect conclusions that are based on certain assumptions that the  
reserves and resources can be economically exploited. Any statements that express or involve discussions with respect to expectations,  
forecasts, assumptions, objectives, beliefs, projections, plans, guidance, predictions, future events or performance (often, but not always,  
identified by words such as “believes”, “seeks”, “anticipates”, “expects”, “continues”, “may”, “projects”, “estimates”, “forecasts”, “pending”,  
“intends”, “plans”, “could”, “might”, “should”, “will”, “would have” or similar words suggesting future outcomes) are not statements of  
historical fact and may be forward-looking statements.  
By their nature, forward-looking statements involve assumptions, inherent risks and uncertainties, many of which are difficult to predict,  
and are usually beyond the control of management, that could cause actual results to be materially different from those expressed by  
such forward-looking statements. Undue reliance should not be placed on these forward-looking statements because the Company  
cannot assure that the forward-looking statements will prove to be correct. As forward-looking information address future conditions  
and events, they could involve risks and uncertainties including, but are not limited to, risk with respect to macro-economic conditions  
and their impact on operations, regulations and taxes, civil unrest, corporate restructuring and related costs, capital and operating  
expenses, pricing and availability of financing and currency exchange rate fluctuations. Readers are cautioned that the assumptions  
used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise  
and, as such, undue reliance should not be placed on forward-looking statements.  
Forward-looking statements include, but are not limited to, statements concerning:  
•
•
•
A change to the shareholder capital return program including the implementation of share buy-backs;  
The completion and timing of proposed transactions;  
Planned exploration, appraisal and development activity including both expected drilling, and geological and geophysical related  
activities;  
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Potential for an improved economic environment;  
Proposed development plans;  
Future development costs and the funding thereof;  
Expected funding and development costs;  
Anticipated future financing requirements;  
Future sources of funding for the Company’s capital program;  
Future capital expenditures and their allocation to exploration and development activities;  
Expected operating costs;  
Future sources of liquidity, ability to fully fund the Company’s expenditures from cash flows, and borrowing capacity;  
Availability of potential farmout partners/ parties;  
Government or other regulatory consent for exploration, development, farmout, or acquisition activities;  
Future production levels;  
Future crude oil or natural gas prices;  
Future earnings;  
The Company’s ability to deliver further growth and expectations regarding free-cash flow;  
Future asset acquisitions or dispositions and the anticipated strategic and financial benefits of those transactions;  
Future debt levels;  
Availability of committed credit facilities, including existing credit facilities, on terms and timing acceptable to the Company;  
Possible commerciality;  
Development plans or capacity expansions;  
Future ability to execute dispositions of assets or businesses;  
Future drilling of new wells;  
Ultimate recoverability of current and long-term assets;  
Ultimate recoverability of reserves or resources;  
The sustainability of the Company across oil and gas price cycles;  
Future foreign currency exchange rates;  
Future market interest rates;  
Future expenditures and future allowances relating to environmental matters;  
Dates by which certain areas will be explored or developed or will come on stream or reach expected operating capacity;  
PAGE 38  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
FORWARD-LOOKING STATEMENTS - CONTINUED  
•
•
•
The Company’s ability to comply with future legislation or regulations;  
Future staffing level requirements; and  
Changes in any of the foregoing.  
Statements relating to “reserves” or “resources” are forward-looking statements, as they involve the implied assessment, based on  
estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated, and can be  
profitably produced in the future.  
These forward-looking statements are subject to known and unknown risks and uncertainties and other factors, which may cause actual  
results, levels of activity and achievements to differ materially from those expressed or implied by such statements. Such factors include,  
among others:  
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Market prices for oil and gas;  
Uncertainty of estimates and projections relating to reserves, resources, production, revenues, costs and expenses;  
Changes in exploration or development project plans or capital expenditures;  
The Company’s ability to explore, develop, produce and transport crude oil and natural gas to markets;  
Production and development costs and capital expenditures;  
The imprecise nature of reserve estimates and estimates of recoverable quantities of oil, natural gas and liquids;  
Changes in oil prices;  
Availability of financing;  
Uninsured risks;  
Changes in interest rates and foreign-currency exchange rates;  
Regulatory changes;  
Changes in the social climate in the regions in which the Company operates;  
Health, safety and environmental risks;  
Climate change legislation and regulation changes;  
Defects in title;  
Availability of materials and equipment;  
Timelines of government or other regulatory approvals;  
Ultimate effectiveness of design or design modification to facilities;  
The results of exploration, appraisal and development drilling and related activities;  
Short-term well test results on exploration and appraisal wells do not necessarily indicate the long-term performance or ultimate  
recovery that may be expected from a well;  
•
•
•
•
•
•
•
•
•
•
Pipeline or delivery constraints;  
Volatility in energy trading markets;  
Incorrect assessments of value when making acquisitions;  
Economic conditions in the countries and regions in which the Company carries on business;  
Governmental actions including changes to taxes or royalties, and changes in environmental and other laws and regulations;  
The Company’s treatment under governmental regulatory regimes and tax laws;  
Renegotiations of contracts;  
Results of litigation, arbitration or regulatory proceedings;  
Political uncertainty, including actions by terrorists, insurgent or other groups, or other armed conflict; and  
Internal conflicts within states or regions.  
The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these  
factors are interdependent, and management’s future course of action would depend on its assessment of all available information  
at that time. Although management believes that the expectations conveyed by the forward-looking statements are reasonable  
based on the information available to it on the date such forward-looking statements were made, no assurances can be given that  
such expectations will prove to be correct, and such forward-looking statements included in, or incorporated by reference into, this  
document should not be unduly relied upon.  
The forward-looking statements are made as of the date hereof or as of the date specified in the documents incorporated by reference  
into this document, as the case may be, and except as required by law, the Company undertakes no obligation to update publicly,  
re-issue, or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This cautionary  
statement expressly qualifies the forward-looking statements contained herein.  
PAGE 39  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
PAGE 40  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
PAGE 41  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
PAGE 42  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
PAGE 43  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
PAGE 44  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
CONSOLIDATED  
BALANCE SHEETS  
(Expressed in millions of United States dollars)  
December 31,  
2024  
December 31,  
2023  
As at  
Note  
ASSETS  
Current assets  
Cash and cash equivalents  
Loan to associated company  
Accounts receivable and prepaid expenses  
Investment held for sale  
4
61.4
4.3
232.0
19  
-
5.1
4.0
7
7.0
-
76.7
237.1
Long-term assets  
Equity investment in joint venture  
Equity investments in associates  
Intangible exploration assets  
Other tangible fixed assets  
Loan to associated company  
5
6
328.4
177.6
29.3
3.2
572.5
134.7
19.1
-
8
9
19  
-
2.8
538.5
729.1
Total assets  
615.2
966.2
LIABILITIES AND EQUITY  
Current liabilities  
Financial liabilities  
9
0.7
9.7
-
14.2
8.2
Accounts payable and liabilities  
Share-based compensation liability  
10  
17  
4.2
14.6
22.4
Long-term liabilities  
Financial liabilities  
9
2.6
3.1
-
5.9
Share-based compensation liability  
Provision for contingent consideration  
Provision for site restoration  
17  
14  
11  
40.4
5.7
37.8
5.5
51.8
49.2
Total liabilities  
66.4
71.6
Equity attributable to common shareholders  
Share capital  
13(B)  
1,195.8
87.4
1,265.3
61.6
Contributed surplus  
Treasury share account  
(0.4)
-
Deficit  
(734.0)
548.8
(432.3)
894.6
Total equity attributable to common shareholders  
Total liabilities and equity attributable to common shareholders  
615.2
966.2
The notes are an integral part of the consolidated financial statements.  
Approved on behalf of the Board:  
“ANDREW BARTLETT”  
“ROGER TUCKER”  
ROGER TUCKER, DIRECTOR  
ANDREW BARTLETT, DIRECTOR  
PAGE 45  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
CONSOLIDATED STATEMENT OF NET (LOSS)/ INCOME  
AND COMPREHENSIVE (LOSS)/ INCOME  
(Expressed in millions of United States dollars)  
December 31,  
2024  
December 31,  
2023  
For the years ended  
Note  
Operating (loss)/ income  
Share of profit from investment in joint venture  
Share of loss from investments in associates  
5
6
226.0
(38.7)
187.3
228.0
(47.0)
181.0
Total operating income  
Operating expenses  
General and administrative expenses  
Impairment of investment in joint venture  
Impairment of intangible exploration assets  
Total operating expense  
(32.4)
(436.7)
-
(31.9)
-
5
8
(62.2)
(94.1)
(469.1)
Net operating (loss)/ income  
(281.8)
86.9
Finance income  
15  
15  
7.6
(4.9)
7.8
(7.6)
87.1
Finance expense  
Net (loss)/income attributable to common shareholders  
(279.1)
Total comprehensive (loss)/ income  
(279.1)
87.1
Net (loss)/income attributable to common shareholders  
per share  
Basic  
16  
16  
(0.62)
(0.62)
0.19
0.18
Diluted  
Weighted average number of shares outstanding for the purpose  
of calculating earnings per share  
Basic  
16  
16  
449,431,803
449,431,803
462,231,061
472,942,487
Diluted  
The notes are an integral part of the consolidated financial statements.  
PAGE 46  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
CONSOLIDATED  
STATEMENTS OF EQUITY  
(Expressed in millions of United States dollars)  
December 31,  
2024  
December 31,  
2023  
For the years ended  
Note  
Share capital:  
13(B)  
Balance, beginning of the year  
Exercise of Share Options  
1,265.3
0.5
1,267.7
1.4
13/ 17  
13/ 17  
13/ 17  
13  
Settlement of Restricted Share Units  
Settlement of Performance Share Units  
Weighted average value of shares cancelled  
Balance, end of the year  
0.5
1.1
1.1
3.5
(71.6)
1,195.8
(8.4)
1,265.3
Contributed surplus:  
Balance, beginning of the year  
Excess of weighted value of shares cancelled  
Balance, end of the year  
61.6
25.8
87.4
59.2
2.4
13  
61.6
Treasury account:  
Balance, beginning of the year  
Shares purchased  
-
(46.2)
45.8
-
(6.0)
6.0
-
13  
13  
Shares cancelled  
Balance, end of the year  
(0.4)
Deficit:  
Balance, beginning of the year  
Dividends paid  
(432.3)
(22.6)
(496.3)
(23.1)
87.1
13  
Net income attributable to common shareholders  
Balance, end of the year  
(279.1)
(734.0)
(432.3)
Total equity attributable to common shareholders  
Balance, end of the year  
548.8
894.6
The notes are an integral part of the consolidated financial statements.  
PAGE 47  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
CONSOLIDATED  
STATEMENTS OF CASH FLOWS  
(Expressed in millions of United States dollars)  
December 31,  
December 31,  
2023  
2024  
For the years ended  
Note  
Cash flows generated by/ (used in):  
Operations:  
Net (loss)/ income for the year  
Adjustments for:  
(279.1)
87.1
Share of profit from investment in joint venture  
Share of loss from investments in associates  
Share-based compensation  
Impairment of investment in joint venture  
Impairment of intangible exploration asset  
Other  
5
6
(226.0)
38.7
1.5
(228.0)
47.0
11.3
-
17  
5
436.7
-
8
62.2
(4.1)
2.1
Net cash used in operating activities before working capital  
Changes in working capital  
(26.1)
(14.8)
(40.9)
(24.5)
(28.8)
(53.3)
Net cash used in operating activities  
Investing:  
Intangible exploration expenditures  
Equity investment in associates  
Dividends received from joint venture  
Loan provided to associated company  
8
6
(7.7)
(88.6)
36.0
(15.4)
(44.4)
175.0
(0.5)
5
19  
(1.0)
Net cash (used) / generated in investing activities  
(61.3)
114.7
Financing:  
Repayment of principal portion of lease commitments  
Dividends paid to shareholders  
Repurchase of share capital  
9
(0.5)
(22.6)
(45.3)
(68.4)
-
(23.1)
(6.0)
13  
13  
Net cash used in financing activities  
(29.1)
Effect of exchange rate changes on cash and cash equivalents  
denominated in foreign currency  
-
-
(Decrease)/ increase in cash and cash equivalents  
Cash and cash equivalents, beginning of the year  
Cash and cash equivalents, end of the year  
(170.6)
232.0
61.4
32.3
199.7
232.0
4
4
The notes are an integral part of the consolidated financial statements.  
PAGE 48  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED  
FINANCIAL STATEMENTS  
For the years ended December 31, 2024, and December 31, 2023  
(Expressed in millions of United States dollars unless otherwise indicated)  
1. Incorporation
and nature of business:  
Africa Oil Corp. (collectively with its subsidiaries, “AOC” or the “Company”) was incorporated on March 29, 1993, under the laws of
British Columbia and is an international oil and gas exploration and production company based in Canada with oil and gas interests in
Africa. The Company’s registered address is 25th Floor, 666 Burrard Street, Vancouver, B.C., Canada V6C 2X8.
2. Basis
of preparation:  
A. Statement
of compliance:  
The Company prepares its consolidated financial statements in accordance with International Financial Reporting Standards as issued  
by the International Accounting Standards Board (“IFRS Accounting Standards”). The policies applied in these consolidated financial  
statements are based on IFRS Accounting Standards issued and outstanding as at February 27, 2025, the date the Board of Directors  
approved the statements.  
B. Basis
of measurement:  
The consolidated financial statements have been prepared on the historical cost basis. Where there are assets and liabilities calculated  
on a different basis, this fact is disclosed in the material accounting policies.  
C. Functional
and presentation currency:  
These consolidated financial statements are presented in United States (US) dollars. The functional currencies of the Company’s  
individual entities are US dollars which represents the currency of the primary economic environment in which the entities operate.  
The consolidated financial statements are expressed in millions of US dollars unless otherwise indicated.  
D. Use
of estimates and judgements:  
The preparation of financial statements in conformity with IFRS Accounting Standards requires management to make judgements,  
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and  
expenses. Actual results may differ from these estimates.  
Information about significant areas of estimation and critical judgements in applying accounting policies that have the most significant  
effect on the amounts recognized in the consolidated financial statements are noted below, with further details of the assumptions  
contained in the relevant note. The Company has a 50% interest in Prime, which is a key asset for the Company. Information about  
Prime’s reserve and resource estimates has been included.  
i. Exploration
and evaluation costs:  
Exploration and evaluation costs are initially capitalized as intangible exploration assets with the intent to establish commercially viable  
reserves. The Company is required to make significant estimates and judgements about the future events and circumstances regarding  
whether the carrying amount of intangible exploration assets exceeds its recoverable amount (see note 8).  
The carrying amounts of the Company’s exploration and evaluation costs are reviewed at each reporting date to determine whether  
there is any indication of impairment. Exploration and evaluation assets are assessed for impairment if facts and circumstances suggest  
that the carrying amount exceeds the recoverable amount. Should the carrying amount exceed the recoverable amount, an impairment  
loss is recognized.  
Significant assumptions developed by management used to determine the recoverable amount of the cash generating unit (“CGU”)  
include estimates for the quantity of contingent resources, future commodity prices, production forecasts, operating expenses,  
development costs, the likelihood of a successful farm out process, the timing of financial investment decision (“FID”) and the discount  
rate. The contingent resources and production rates are prepared by the Company’s independent petroleum engineers (management’s  
experts). CGU’s are assets that are grouped together into the smallest group of assets that generates cash inflows from continuing use  
that are largely independent of the cash inflows of other assets or groups of assets.  
Exploration and evaluation assets are assessed if facts and circumstances suggest that an impairment loss recognized in prior periods  
may no longer exist or may have decreased.An impairment reversal is recognized if there has been an increase in the asset’s recoverable  
amount since the last impairment loss was recognized.  
The changing worldwide demand for energy and the global advancement of alternative sources of energy could result in a change in  
the assumptions used to determine the recoverable amount and could affect estimating the future cash flows which could impact the  
carrying amount of the Company’s intangible exploration assets. The timing of when global energy markets transition from carbon-  
based sources to alternative energy sources is highly uncertain. Environmental considerations are built into our estimates through the  
use of significant assumptions in estimating fair value including future commodity prices and discount rates. The energy transition  
could impact the future prices of commodities and discount rates used to appraise oil and gas projects. Pricing assumptions used in the  
determination of recoverable amounts incorporate market expectations and the evolving worldwide demand for energy.  
PAGE 49  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
ii. Share
based compensation:  
Charges for share purchase options are based on the fair value at the date of the award. Share purchase options are valued using  
the Black-Scholes model, and inputs to the model include assumptions on share price volatility, discount rates and expected life  
outstanding (see note 17).  
The estimated fair value of Performance share units (“PSUs”) is calculated based on non-market performance conditions set by the  
Company which are initially determined at the time of grant.The Company assesses the progress of reaching the individual performance  
conditions during each reporting period. PSUs cliff vest three years from the date of grant, at which time the Board of Directors will  
assign a performance multiple ranging from nil to 200% to determine the ultimate vested number of PSUs. The awards are revalued  
every quarter based on the Company’s share price and an estimate of the performance conditions at the quarter end. It is anticipated  
that PSU settlements will be made by issuing shares from treasury or cash, at the discretion of the Board of Directors (see note 17).  
The estimated fair value of the Restricted share units (“RSUs”) is initially determined at the time of grant. The awards are revalued every  
quarter based on the Company’s share price. RSUs may be settled in shares issued from treasury or cash, at the discretion of the Board  
of Directors (see note 17).  
iii. Consolidation
of entities:  
When assessing control over a subsidiary, the Company is required to consider the nature of its relationship with the subsidiary, and  
whether strategic and operating decisions made by the subsidiary are made independently without the significant influence or control  
of the Company. Factors considered when assessing for control include share ownership, board composition and management  
involvement in the business. The determination of whether strategic and operating decisions made by the Company’s subsidiaries (see  
note 20) are made independently without the significant influence or control of the Company requires judgement.  
iv. Valuation
of investments:  
An investment in an associate or a joint venture is accounted for using the equity method from the date on which the investee becomes  
an associate or a joint venture. Investments in associates or joint ventures are initially recorded at cost. On acquisition of the investment  
in an associate or a joint venture, any excess of the cost of the investment over the share of the net fair value of the identifiable assets and  
liabilities of the investee is recognized as notional goodwill, which is included within the carrying amount of the investment. Significant  
assumptions developed by management used to determine the fair value of the non-current assets include estimates for the quantity  
of proved and probable petroleum reserves, future commodity prices, operating and capital costs as well as discount rates. The proved  
and probable petroleum reserves are prepared by the investee’s independent petroleum engineers (management’s experts).  
Where contingent consideration has been recognized in an investment in an associate or joint venture, any revisions to the contingent  
consideration estimates after the date of acquisition, which have been considered as changes in estimates in accordance with IAS 8,  
are accounted for on a prospective basis. Any change in the liability as a result of the revised cash flows is adjusted to the cost of the  
asset and, in accordance with paragraph 37 of IAS 8, recognized as part of the associate or joint venture carrying amount rather than  
in profit or loss.  
v. Impairment
of joint ventures and associates:  
The amounts for investments in joint ventures and associates represents the Company’s equity interest in other entities, where there  
is either joint control or significant influence. The Company assesses investments in associates for impairment whenever changes  
in circumstances or events indicate that the carrying value may not be recoverable. The process of determining whether there is an  
objective evidence of impairment considering circumstances or events which indicate that the carrying value may not be recoverable  
or calculating the recoverable amount requires judgement.  
An area in which the Company has applied judgement in the prior year relates to the investment in Prime.On acquisition,judgements and  
estimates were used in determining fair values on acquisition for the purposes of the notional purchase price allocation.
Subsequently,  
in assessing whether there are any indicators of impairment the Company has considered any effects of Prime’s forward sales, the loan  
facility, and any operational and contractual implications on the future dividend stream when assessing for impairment indicators.  
An area in which the Company has applied judgement in the year relates to the equity investments in associates. In assessing whether  
there are any indicators of impairment the Company considered the movements in share price of the associates listed on public  
markets, the results of exploration and appraisal activities and future plans for the operations.  
vi. Deferred
tax asset:  
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary  
difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is probable that  
the related tax benefit will no longer be realized.  
vii. Contingencies:  
Contingencies are subject to measurement uncertainty as the related financial impact will only be confirmed by the outcome of a future  
event. The assessment of contingencies requires the application of judgements and estimates including the determination of whether  
a present obligation exists, and the reliable estimation of the timing and amount of cash flows required to settle the contingencies.  
PAGE 50  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
viii. Hydrocarbon reserve and resource estimates:  
Oil and gas production assets, including facilities, are depreciated on a units-of-production (“UoP”) basis at a rate calculated by  
reference to total proved and probable oil and gas reserves (“2P”) determined in accordance with the principles contained in the SPE  
Petroleum Resources Management Reporting System (“PRMS”) framework.  
Prime estimates its 2P reserves based on information provided by reputable independent petroleum engineers, through the information  
provided by the respective operators. This information from reputable independent petroleum engineers concerns, amongst others,  
the geological and technical data on the size, depth, shape and grade of the hydrocarbon body and suitable production techniques  
and recovery rates.  
2P reserves are determined using estimates of oil and gas in place, recovery factors, operating expenses, future development costs  
and future commodity prices; the latter having an impact on the total amount of recoverable reserves and the proportion of the gross  
reserves which are attributable to the host government under the terms of the Production-Sharing Agreements.  
The current long-term Brent oil price assumption used in the estimation of proved and probable reserves is based on the long-term oil  
price forward curve of Bloomberg L.P.  
As the economic assumptions used may change and, as additional geological information is obtained during the operation of a field,  
estimates of recoverable reserves may change.  
ix. Provision
for site restoration:  
Amounts used in recording a provision for site restoration are based on current legal and constructure requirements and current  
technology and price levels for the removal of facilities and plugging and abandoning of wells. Due to changes in relation to these  
items, the future cash outflows in relation to the site decommissioning and restoration can be difficult. To reflect the effects due to  
changes in legislation requirements, technology and price levels, the carrying amounts of site restoration provisions are reviewed on  
a regular basis.  
On fields where the Group is required to contribute to site restoration costs, a provision is recorded to recognize the future commitment.  
An asset is created, as part of oil and gas interests, to represent the discounted value of the anticipated site restoration liability and  
depleted over the life of the field on a unit of production basis. The corresponding accounting entry to the creation of the asset  
recognizes the discounted value of the future liability. The discount applied to the anticipated site restoration liability is subsequently  
released over the life of the field and is charged to finance expense. Changes in site restoration costs and reserves are treated  
prospectively and consistent with the treatment applied upon initial recognition (see note 11).  
3. Material
accounting policies:  
The accounting policies set out below have been applied consistently to all years presented in these consolidated financial statements  
and have been applied consistently by the Company and its subsidiaries.  
A. Basis
of consolidation:  
i. Subsidiaries:  
Subsidiaries are entities controlled by the Company. Control exists when the Company has the power to govern the financial and  
operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that are currently  
exercisable are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from  
the date that control commences until the date that control ceases.  
The acquisition method of accounting is used to account for acquisitions of subsidiaries and assets that meet the definition of a business  
under IFRS Accounting Standards. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued,  
and liabilities incurred or assumed at the date of exchange.  
ii. Jointly
controlled operations and jointly controlled assets:  
Many of the Company’s oil and natural gas activities involve jointly controlled assets. The consolidated financial statements include the  
Company’s share of these jointly controlled assets and liabilities and a proportionate share of the relevant revenue and related costs.  
iii. Transactions
eliminated on consolidation:  
Intercompany balances and transactions, and any unrealized income and expenses arising from intercompany transactions, are  
eliminated in preparing the consolidated financial statements.  
PAGE 51  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
B. Equity
method:  
Investments in joint ventures and associates are accounted for using the equity method. Investments of this nature are recorded at  
original cost. Investments in joint ventures or associates which arise from a loss in control of a subsidiary are recorded at fair value on  
the date of the loss of control. The investment is adjusted at each reporting date for the Company's share of the profit or loss of the  
investment after the date of acquisition. The investor's share of the profit or loss of the investee is also recognized in the Company's  
Statement of Net (Loss)/ Income and Comprehensive (Loss)/ Income. Distributions received reduce the carrying amount of the  
investment.  
The Company assesses its investments in joint ventures and associates for an objective evidence of impairment considering  
circumstances or events which indicate that the carrying value may not be recoverable. If such circumstances or events exist, the  
carrying amount of the investment is compared to its recoverable amount. The recoverable amount is the higher of the investment’s  
fair value less costs to dispose and its value in use. The investment is written down to its recoverable amount when its carrying amount  
exceeds the recoverable amount.  
As at December 31, 2024, the Company had a 50% interest in Prime which is a key asset for the Company. The material accounting  
policies for Prime are as follows:  
i. Sales
of crude oil and natural gas:  
Revenue from the sale of crude oil and natural gas is recognized when control of the goods transfers to the customer. The transfer  
of control of the crude oil and natural gas sold by Prime usually coincides with title passing to the customer and the customer taking  
physical possession. This generally occurs when the product is physically transferred into a vessel, pipe or other delivery mechanism.  
Crude oil transaction prices under forward contracts are based on the agreed contract price plus or minus a premium based on an  
arithmetical average of the mean in quoted market prices for the previous month of the bill of lading. The performance obligation  
is satisfied and payment is due upon delivery, FOB, to the buyer. At this point in time, at the bill of lading date, a trade receivable is  
recognized and there are generally 30 days between revenue recognition and payment. There are no obligations for returns, refunds,  
warranties nor other obligations when control has been transferred.  
Prime principally satisfies its performance obligations at a point in time and the amounts of revenue recognized relating to performance  
obligations satisfied over time are not significant.  
Revenue from crude oil transactions not covered under forward contracts, arises from the production and lifting of crude oil on an  
'entitlements' basis. Under the entitlements method, revenue reflects Prime’s share of production under the terms of the relevant  
production sharing contracts, regardless of which participant has actually made the sale and invoiced the production. This is achieved  
by applying the following approach in dealing with imbalances between actual sales and entitlements.  
Crude oil entitlement underlifts are recognized at the market price of oil at the balance sheet date. The excess of product sold during  
the period over the participant’s ownership share of production is recognized by Prime (acting as underlifter) as an asset in trade and  
other receivables with a corresponding credit to cost of sales. Prime’s underlift receivable is the right to receive additional oil from  
future production without the obligation to fund the production of that additional oil.  
Crude oil entitlement overlifts are treated as a purchase of crude oil by the overlifter from the underlifter and are also recognized at the  
market price of oil at the balance sheet date. The excess of product purchased during the period over the participant’s ownership share  
of production is recognized by Prime (acting as overlifter) as a liability in trade and other payables with a corresponding charge to cost  
of sales. An overlift liability is the obligation to deliver oil out of Prime’s equity share of future production.  
Revenues resulting from the production of oil under Production Sharing Contracts (“PSCs”) are recognized for those amounts relating to  
Prime’s cost recoveries and Prime’s share of the remaining production. Sales between group companies are based on prices generally  
equivalent to commercially available prices.  
ii. Tax
oil revenue:  
According to the Production Sharing Agreements (“PSAs”), the share of the profit oil (“PPT”) to which the government is entitled in any  
calendar year, in accordance with the PSA, is deemed to include a portion representing the corporate income tax imposed upon and  
due by Prime.As the tax oil lifted by the operator on behalf of Prime is sold to 3rd party customers and proceeds are used to settle Prime’s  
tax liabilities, this share of PPT is considered to be within the scope of IFRS 15, ‘Revenue from contracts with customers’. Consequently,  
this portion of income tax and revenue is presented gross in revenue and offset in current income tax expense. Investment tax credit  
utilized is recognized as ‘Other operating income’.  
From May 2022, Prime has been lifting its share of tax oil and paying tax revenue in cash for PMLs 2, 3 and 4 and PPL 261. For PML  
52, the operator was paying the tax on behalf of Prime to July 2023 and from August 2023, following conversion to the terms of the  
Petroleum Industry Act 2021 retrospectively from March 2023, Prime has been lifting its share of tax oil and paying tax revenue in cash.  
As the Group’s income taxes meet the criteria to be treated as an income tax under IAS 12, these are recorded as a single line item in  
profit and loss.  
PAGE 52  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
iii. Depreciation/amortization:  
Oil and gas properties are depreciated/amortized from the commencement of production, on a UoP basis, which is the ratio of oil and  
gas production in the period to the estimated quantities of the 2P reserves at the end of the period plus the production in the period,  
on a field-by-field basis. Facilities included in oil and gas production assets are depreciated on a UoP basis over the economic useful  
life of the field concerned. Costs used in the UoP calculation comprise the net carrying amount of capitalized costs plus the estimated  
future field development costs. Changes in the estimates of reserves or future field development costs are dealt with prospectively.  
Oil and gas volumes are considered produced once they have been measured through meters at custody transfer or sales transaction  
points at the outlet valve on the field storage tank. Rights and concessions are depleted on the UoP basis over the total proved and  
probable reserves of the relevant area.  
iv. Recoverability
of oil and gas properties:  
Prime assesses each asset or cash generating unit (CGU) (excluding goodwill, which is assessed annually regardless of indicators) each  
reporting period to determine whether any indication of impairment exists. Where an indicator of impairment exists, with reference to  
total proved and risk-adjusted probable reserves ('2P'), a formal estimate of the recoverable amount is made, which is considered to  
be the higher of the fair value less costs to dispose and value in use. The assessments require the use of estimates and assumptions  
such as long-term oil prices (considering current and historical prices, price trends and related factors), discount rates, operating costs,  
future capital requirements, decommissioning costs, exploration potential, reserves (see Hydrocarbon reserve and resource estimates  
above) and operating performance (which includes production and sales volumes). These estimates and assumptions are subject to  
risk and uncertainty. Therefore, there is a possibility that changes in circumstances will impact these projections, which may impact the  
recoverable amount of assets and/or CGUs.  
Fair value is determined as the amount that would be obtained from the sale of the asset in an arm's length transaction between  
knowledgeable and willing parties. Fair value for oil and gas properties is generally determined as the present value of estimated  
future cash flows arising from the continued use of the assets, which includes estimates such as the cost of future expansion plans and  
eventual disposal, using assumptions that an independent market participant may take into account. Cash flows are discounted to their  
present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the  
asset/CGU.  
C. Long-term
debt:  
Long-term debt is initially measured at fair value less transaction costs that are directly attributable to the acquisition or issue of the  
debt. Subsequently, long-term debt is measured at amortized cost using the effective interest method. Long-term debt is classified as  
current if the liability is due to be settled within twelve months from the reporting date. All other debt is classified as non-current.  
D. Foreign
currency:  
Monetary assets and liabilities denominated in foreign currencies are translated into US dollars at exchange rates prevailing at the  
balance sheet date and non-monetary assets and liabilities are translated at rates in effect on the date of the transaction. Revenues and  
expenses are translated at exchange rates at the date of transaction. Exchange gains or losses arising from translation are included in  
the Statement of Net (Loss)/ Income and Comprehensive (Loss)/ Income.  
E. Intangible
exploration assets:  
i. Pre-exploration
expenditures:  
Costs incurred prior to obtaining the legal rights to explore an area are recognized in the Statement of Net (Loss)/ Income and  
Comprehensive (Loss)/ Income as incurred.  
ii. Exploration
expenditures:  
Exploration expenditures include costs associated with the acquisition of a license interest, directly attributable general and  
administrative costs, expenditures incurred in the process of determining oil and gas exploration targets, and exploration drilling  
costs. All exploration expenditures with common geological structures and shared infrastructure are accumulated together within  
intangible exploration assets. The Company does not aggregate exploration expenditures above the segment level for the purpose of  
impairment testing.
Costs are not depleted until such time as the exploration phases on the license area are complete, the license area  
is relinquished, or commercially viable reserves have been discovered and extraction of those reserves is determined to be technically  
feasible.  
If commercial reserves are established and technical feasibility for extraction demonstrated, then the related capitalized intangible  
exploration costs are transferred into a CGU within oil and gas interests subsequent to determining that the assets are not impaired (see  
“Impairment” below). Where results of exploration drilling indicate the presence of hydrocarbons which are ultimately not considered  
commercially viable, all related costs are recognized in the Statement of Net (Loss)/ Income and Comprehensive (Loss)/ Income.  
Net proceeds from any disposal or farmout of an intangible exploration asset are recorded as a reduction in intangible exploration  
assets.  
iii. Development
and production costs:  
All costs incurred after the technical feasibility and commercial viability of producing hydrocarbons has been demonstrated are  
capitalized within oil and gas interests on a CGU basis. Subsequent expenditures are capitalized only where it either enhances the  
economic benefits of the development/producing asset or replaces part of the existing development/producing asset. Any remaining  
costs associated with the part replaced are expensed in the Statement of Net (Loss)/ Income and Comprehensive (Loss)/ Income.  
Net proceeds from any disposal of oil and gas interests are recorded as a gain or loss on disposal recognized in the Statement of Net  
(Loss)/ Income and Comprehensive (Loss)/ Income to the extent that the net proceeds exceed or are less than the appropriate portion  
of the net capitalized costs of the asset.  
PAGE 53  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
F. Impairment:  
i. Financial
assets carried at amortized cost:  
A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial  
asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated  
future cash flows of that asset.  
The Company recognizes loss allowances for expected credit losses (“ECLs”) on its financial assets measured at amortized cost. Due to  
the nature of its financial assets, the Company measures loss allowances at an amount equal to expected lifetime ECLs.  
An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying  
amount and the present value of the estimated future cash flows discounted at the original effective interest rate.  
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed  
collectively in groups that share similar credit risk characteristics.  
All impairment losses are recognized in the Statement of Net (Loss)/ Income and Comprehensive (Loss)/ Income.  
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized.  
For financial assets measured at amortized cost the reversal is recognized in the Statement of Net (Loss)/ Income and Comprehensive  
(Loss)/ Income.  
ii. Non-financial
assets:  
The carrying amounts of the Company’s non-financial assets, including the Company’s equity investments, other than intangible  
exploration assets and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of  
impairment or reversals of impairment. Intangible exploration assets are assessed for impairment when they are reclassified to property  
and equipment, as oil and gas interests, and also if facts and circumstances suggest that the carrying amount exceeds the recoverable  
amount. If
any such indication exists, then the asset’s recoverable amount is estimated. For goodwill and other intangible assets that  
have indefinite lives or that are not yet available for use, an impairment test is completed each reporting period.  
For the purpose of impairment testing, assets are grouped together into a CGU.
The recoverable amount of an asset or a CGU is the  
greater of its value in use and its fair value less costs to dispose.  
In assessing value in use, the estimated future cash flows are discounted to their present value using a post-tax discount rate that  
reflects current market assessments of the time value of money and the risks specific to the asset.
Value in use is generally computed  
by reference to the present value of the future cash flows expected to be derived from production of 2P reserves.
In determining fair  
value less costs to dispose, recent market transactions are taken into account, if available, and a post-tax discount rate is applied. In the  
absence of such transactions, an appropriate valuation model is used.  
An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment  
losses are recognized in the Statement of Net (Loss)/ Income and Comprehensive (Loss)/ Income. Impairment losses recognized in  
respect of CGU’s are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying  
amounts of the other assets in the unit (group of units) on a pro rata basis.  
If there is an indicator that a previous impairment may no longer exist or may have decreased, the recoverable amount of the relevant  
asset or its CGU is calculated and compared against the carrying amount. The impairment is reversed to the extent that the asset or  
its CGU’s recoverable amount does not exceed the carrying amount that would have been determined if no impairment had been  
recognized. An impairment reversal is recognized in the Statement of Net (Loss)/ Income and Comprehensive (Loss)/ Income.  
G. Other
tangible fixed assets and lease liabilities (IFRS 16)  
All leases are accounted for by recognising a right-of-use asset and a lease liability except for:  
•
Leases of low value assets; and  
•
Leases with a duration of 12 months or less.  
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount  
rate determined by reference to the Company's incremental borrowing rate on commencement of the lease is used. Variable lease  
payments are only included in the measurement of the lease liability if they depend on an index or rate. In such cases, the initial  
measurement of the lease liability assumes the variable element will remain unchanged throughout the lease term. Other variable lease  
payments are expensed in the period to which they relate.  
On initial recognition, the carrying value of the lease liability also includes:  
•
amounts expected to be payable under any residual value guarantee;  
•
the exercise price of any purchase option granted in favour of the Company if it is reasonably certain to assess that option;  
•
any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of termination option being  
exercised.  
PAGE 54  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased  
for:  
•
lease payments made at or before commencement of the lease;  
•
initial direct costs incurred; and  
•
the amount of any provision recognized where the Company is contractually required to dismantle, remove or restore the leased  
asset.  
Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding  
and are reduced for lease payments made. Right-of-use assets are amortised on a straight-line basis over the remaining term of the  
lease or over the remaining economic life of the asset if, rarely, this is judged to be shorter than the lease term.  
When the Company revises its estimate of the term of any lease, it adjusts the carrying amount of the lease liability to reflect the  
payments to make over the revised term, which are discounted using a revised discount rate. In this case an equivalent adjustment is  
made to the carrying value of the right-of-use asset, with the revised carrying amount being amortised over the remaining (revised)  
lease term. If the carrying amount of the right-of-use asset is adjusted to zero, any further reduction is recognised in profit or loss.  
H. Performance
share units (“PSUs”):  
The Company has a long-term incentive plan (see note 17). Eligible plan participants may be granted PSUs. PSUs are accounted for  
as cash-based awards and recorded as a liability. The estimated fair value of the awards is initially determined at the time of grant. The  
awards are revalued every quarter based on the Company’s share price and the change is recorded as share-based compensation in  
the Statement of Net (Loss)/ Income and Comprehensive (Loss)/ Income. The estimated fair value of the awards is calculated based on  
non-market performance conditions set by the Company which are initially determined at the time of grant. The Company assesses the  
progress of reaching the individual performance conditions during each reporting period. PSUs cliff vest three years from the date of  
grant and the estimated fair value of the grant will be expensed evenly throughout the remaining vesting period. PSUs may be settled  
in shares issued from treasury or cash, at the discretion of the Board of Directors.  
I. Restricted
share units (“RSUs”):  
The Company has a long-term incentive plan (see note 17). Eligible plan participants may be granted RSUs. RSUs are accounted for  
as cash-based awards and recorded as a liability. The estimated fair value of the awards is initially determined at the time of grant. The  
awards are revalued every quarter based on the Company’s share price and the change is recorded as share-based compensation in  
the Statement of Net (Loss)/ Income and Comprehensive (Loss)/ Income. RSUs granted to Non-Executive Directors cliff vest three years  
from the date of grant. The estimated fair value of RSUs are expensed evenly throughout the remaining vesting period. RSUs may be  
settled in shares issued from treasury or cash, at the discretion of the Board of Directors.  
J. Finance
income and expenses:  
Finance income and expenses are recognized as they accrue in the Statement of Net (Loss)/ Income and Comprehensive (Loss)/  
Income, using the effective interest method.  
K. Income
tax:  
Income tax expense comprises current and deferred tax. Income tax expense is recognized in the Statement of Net (Loss)/ Income and  
Comprehensive (Loss)/ Income except to the extent that it relates to items recognized directly in equity, in which case it is recognized  
in equity.  
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the  
reporting date, and any adjustment to tax payable in respect of previous years.  
Deferred tax is recognized using the balance sheet method, providing for temporary differences between the carrying amounts of  
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized on the  
initial recognition of assets or liabilities in a transaction that is not a business combination. In addition, deferred tax is not recognized for  
taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected  
to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the  
reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset, and they relate to income taxes  
levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and  
assets on a net basis, or their tax assets and liabilities will be realized simultaneously.  
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary  
difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer  
probable that the related tax benefit will be realized.  
On May 23, 2023, the International Accounting Standards Board (IASB) issued an amendment to IAS 12 Income Taxes in response to  
International Tax Reform and specifically the Pillar Two Global Anti-Base Erosion Rules (“Pillar Two Rules”) published by the Organization  
for Economic Co-operation and Development (“OECD”). The Amendments introduce a mandatory temporary exception to the  
accounting for deferred taxes arising from the jurisdictional implementation of the Pillar Two model rules; and disclosure requirements  
for affected entities to help users of the financial statements better understand an entity’s exposure to Pillar Two income taxes arising  
from that legislation, particularly before its effective date. The Company adopted the mandatory temporary exception immediately. The  
remaining disclosure requirements have no effect on the Company’s consolidated financial statements.  
PAGE 55  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
L. Earnings
per share:  
Basic earnings per share is calculated by dividing net income/(loss) attributable to the common shareholders by the weighted average  
number of Common Shares outstanding during the year. Diluted earnings per share is determined by adjusting the net income/  
(loss) attributable to the common shareholders and the weighted average number of Common Shares outstanding for the effects of  
dilutive instruments such as options and LTIP’s granted to employees.
The weighted average number of diluted shares is calculated  
in accordance with the treasury stock method. The treasury stock method assumes that the proceeds received from the exercise of all  
potentially dilutive instruments are used to repurchase Common Shares at the average market price. The PSUs are considered to be  
contingently issuable and are included in the calculation of diluted EPS as if the conditions of the contingency are deemed to have  
been met based on the information available at the end of the reporting period.
PSUs are only included in the diluted EPS calculation  
if the effect is dilutive. RSUs are included in full in the diluted EPS calculation only if the effect is dilutive.  
M. Financial
instruments:  
Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument.  
Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred and the  
Company has transferred substantially all risks and rewards of ownership.
Financial assets and liabilities are offset and the net amount  
is reported in the Balance Sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to  
settle on a net basis or realize the asset and settle the liability simultaneously.  
At initial recognition, the Company classifies its financial instruments either as fair value through profit and loss, fair value through other  
comprehensive income or at amortized cost depending on the purpose for which the instruments were acquired. The Company only  
has instruments recognized at amortized cost.  
Financial assets and liabilities at amortized cost:  
Financial assets and liabilities at amortized cost include accounts receivable, loans receivable, accounts payables and debt and are  
initially recognized at the amount required to be received or paid, less, when material, a discount to reduce the receivables or payables  
to fair value. Subsequently, these assets and liabilities are measured at amortized cost using the effective interest method.
Financial  
assets and liabilities are classified as current assets and liabilities if payment is due within twelve months. Otherwise, they are presented  
as non-current assets and liabilities.  
N. Provisions:  
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated  
reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by  
discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the  
risks specific to the liability. Provisions are not recognized for future operating losses.  
i. Contingent
Consideration:  
Contingent consideration formed part of the overall consideration for the acquisition of Prime. At the date of acquisition, an estimate  
of the contingent consideration is determined and included as part of the cost of the acquisition.  
Subsequent to acquisition, contingent consideration can be treated using two acceptable methods, the cost-based approach and  
the fair value-based approach. The Company have determined the cost-based approach to give the best estimate of the value of the  
contingent consideration. Any revisions to the contingent consideration estimates after the date of acquisition, are accounted for as  
changes in estimates in accordance with IAS 8, to be accounted for on a prospective basis. The change in the liability, as a result of the  
revised cash flows, would be adjusted to the cost of the investment and, in accordance with paragraph 37 of IAS 8, recognized as part  
of the investment’s carrying amount rather than in profit or loss.  
The estimates involved in assessing the value of the contingent consideration include the expected timing of payments, the expected  
settlement value, the likelihood of settlement and the probability of the assessed outcomes occurring. There is significant judgement  
used in the determination of these estimates.  
ii. Provision
for site restoration:  
On fields where the Group is required to contribute to site restoration costs, a provision is recorded to recognize the future commitment.  
An asset is created, as part of oil and gas interests, to represent the discounted value of the anticipated site restoration liability and  
depleted over the life of the field on a unit of production basis. The corresponding accounting entry to the creation of the asset  
recognizes the discounted value of the future liability. The discount applied to the anticipated site restoration liability is subsequently  
released over the life of the field and is charged to finance expense. Changes in site restoration costs and reserves are treated  
prospectively and consistent with the treatment applied upon initial recognition.  
O. Investments
held for sale  
Investments held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell are the  
incremental costs directly attributable to the disposal of an asset. The criteria for held for sale classification is regarded as met only  
when the sale is highly probable, and the asset or disposal group is available for immediate sale in its present condition. The Company  
has committed to the plan to dispose of the asset and the disposal is expected to be completed within one year from the date of the  
classification  
PAGE 56  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
P. New
and amended standards adopted by the Company:  
The Company has applied the following standards and amendments for the first time for its annual reporting period commencing  
January 1, 2024:  
•
Classification of Liabilities as Current or Non-current and Non-current liabilities with covenants – Amendments to IAS 1;  
•
Lease Liability in Sale and Leaseback – Amendments to IFRS 16; and  
•
Supplier Finance Arrangements – Amendments to IAS 7 and IFRS 7.  
The amendments listed above did not have any material impact on the amounts recognized in prior periods and are not expected to  
significantly affect the current or future periods.  
Q. New
standards and interpretations not yet adopted:  
Certain new accounting standards and amendments to accounting standards have been published that are not mandatory for  
December 31, 2024, reporting periods and have not been early adopted by the Company. The Company’s assessment of the impact of  
these new standards and amendments is set out below:  
(a.) Amendments
to IAS 21 -- Lack of Exchangeability (effective for annual periods beginning on or after 1 January 2025)  
In August 2023, the IASB amended IAS 21 to help entities to determine whether a currency is exchangeable into another currency, and  
which spot exchange rate to use when it is not.  
(b.) Amendments
to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7 (effective for  
annual periods beginning on or after 1 January 2026)  
On 30 May 2024, the IASB issued targeted amendments to IFRS 9 and IFRS 7 to respond to recent questions arising in practice, and to  
include new requirements not only for financial institutions but also for corporate entities. These amendments:  
•
clarify the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial  
liabilities settled through an electronic cash transfer system;  
•
clarify and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI)  
criterion;  
•
add new disclosures for certain instruments with contractual terms that can change cash flows (such as some financial instruments  
with features linked to the achievement of environment, social and governance targets); and  
•
update the disclosures for equity instruments designated at fair value through other comprehensive income (FVOCI).  
(c.) IFRS
19 Subsidiaries without Public Accountability: Disclosures (effective for annual periods beginning on or after 1 January 2027)  
Issued in May 2024, IFRS 19 allows for certain eligible subsidiaries of parent entities that report under IFRS Accounting Standards to  
apply reduced disclosure requirements.  
(d.) IFRS
18 Presentation and Disclosure in Financial Statements (effective for annual periods beginning on or after 1 January 2027)  
IFRS 18 will replace IAS 1 Presentation of financial statements, introducing new requirements that will help to achieve comparability  
of the financial performance of similar entities and provide more relevant information and transparency to users. Even though IFRS  
18 will not impact the recognition or measurement of items in the financial statements, its impacts on presentation and disclosure are  
expected to be pervasive, in particular those related to the statement of financial performance and providing management-defined  
performance measures within the financial statements.  
Management is currently assessing the detailed implications of applying the new standard on the group’s consolidated financial  
statements.  
The group will apply the new standard from its mandatory effective date of 1 January 2027. Retrospective application is required, and  
so the comparative information for the financial year ending 31 December 2026 will be restated in accordance with IFRS 18.  
The group is in the process of evaluating the impact of IFRS 18 on the group’s financial statements.  
The other amendments are not expected to have a material impact on the entity in the current or future reporting periods and on  
foreseeable future transactions.  
4. Cash
and cash equivalents:  
Cash equivalents include short-term deposits made for varying periods of between one day and three months, depending on the  
immediate cash requirements of the Group, and earn interest at varying rates.  
PAGE 57  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
5. Equity
investment in joint venture:  
Prime Oil and Gas Coöperatief U.A. (“Prime”):  
On January 14, 2020, the Company completed the acquisition of a 50% ownership interest in Prime. BTG Pactual Holding S.à.r.l., a  
private limited liability company governed and existing under the laws of the Grand Duchy of Luxembourg (“BTG”) continues to own  
the remaining 50% of Prime. The Company accounts for the acquisition as a joint venture as there is joint control. On June 24, 2024,  
the Company announced that it had reached an agreement with BTG to acquire the remaining 50% interest in Prime in exchange  
for 239,828,655 newly to be issued common shares in Africa Oil (the “Proposed Reorganization”). Completion of the Proposed  
Reorganization is expected on or about March 7, 2025. Prime will be fully consolidated from completion of this transaction.  
As at December 31, 2024, management determined there was an objective evidence of impairment in relation to the Company’s  
existing shareholding in Prime as a result of the significant decrease in the Africa Oil share price between June 24, 2024, when the  
Company announced the Proposed Reorganization and December 31, 2024. The fair value of the existing 50% shareholding in Prime  
decreased as the fair value considers the number of Africa Oil shares that were agreed in relation to the purchase of the additional  
interest in Prime and the trading value of Africa Oil shares, as this is an observable fair value input under IFRS Accounting Standards. As  
at December 31, 2024, the fair value of the Company’s existing shareholding in Prime was calculated to be $328.4 million based on the  
implied value of the Proposed Reorganization, resulting in a non-cash impairment loss on the investment in Prime of $436.7 million for  
the year ended December 31, 2024. The fair value has been calculated based on the Africa Oil share price of CAD 1.97 as of December  
31, 2024, and the USD/CAD exchange rate of 1.4384 as of December 31, 2024. The consideration under the Proposed Reorganization  
will be based on the share price and exchange rate as of the date of completion of the Proposed Reorganization and may therefore  
change materially compared to the fair value of $328.4 million as at December 31, 2024. This might therefore result in the recognition  
of additional impairment charges or the reversal of previously recognized impairment charges in future reporting periods based on  
the movements in the Africa Oil share price and the USD/CAD exchange rate between December 31, 2024, and the closing date of  
the transaction. The Company is not entitled to any of the earnings related to the additional 50% interest in Prime until closing of the  
Proposed Reorganization.  
Prime is incorporated in the Netherlands and its principal place of business is Nigeria. The primary assets of Prime are an indirect 8%  
interest in Petroleum Mining License ("PML") 52 and an indirect 16% interest in PMLs 2, 3 and 4 as well as Petroleum Prospecting License  
("PPL") 261. PML 52 is operated by affiliates of Chevron and covers part of the producing Agbami field. PMLs 2, 3 and 4 and PPL 261  
are operated by affiliates of TotalEnergies and contain the producing Akpo and Egina fields.  
In the year ended December 31, 2024, Prime made two dividend payments of $72.0 million gross, with a net payment to the Company  
of $36.0 million. In the year ended December 31, 2023, Prime made three dividend payments totaling $350.0 million gross, with a  
net payment to the Company of $175.0 million. The timing and payment of the dividends is discretionary. There are no restrictions on  
the ability of Prime to pay dividends to its members, subject to distributable reserves being positive and working capital or business  
requirements.  
In the year ended December 31, 2024, the Company recognized an income of $226.0 million, relating to its investment in Prime (year  
ended December 31, 2023 - $228.0 million).  
On June 25, 2021, Prime signed a Securitization Agreement with two of the unit parties, Equinor and Chevron, whereby Equinor agreed  
to pay a security deposit to the two other JV parties to secure future payments due under that Securitization Agreement, pending a  
comprehensive resolution being reached among all unit parties in respect of the tract participation in the Agbami field by December  
27, 2024. In accordance with the Securitization Agreement, on June 29, 2021, Prime received from Equinor its portion of the security  
deposit in the form of a cash payment of $305.3 million. A provision for the full cash payment had been recorded within Prime to  
reflect the mechanism pursuant to which any such imbalance payments due from Equinor to Prime under the terms of any future  
agreement among the Agbami parties would be set-off against this security deposit. Given no comprehensive resolution was reached  
by December 27, 2024, Prime released the provision for the original cash payment and recognized an additional receivable of $24.4  
million pursuant to the Securitization Agreement with this additional payment received on January 31, 2025. The Agbami unit parties  
will continue ongoing discussions to seek final resolution of the formal redetermination of the Agbami tract participation, however  
there is no certainty that such ongoing discussions will result in a final resolution.  
PAGE 58  
The following table shows the Company’s carrying value of the investment in Prime as at December 31, 2024, and December 31, 2023.  
December 31,  
2024  
December 31,  
2023  
Balance, beginning of the year  
572.5  
513.7  
Share of joint venture profit  
226.0  
228.0  
Dividends received from Prime  
(36.0)  
(175.0)  
Revaluation of contingent consideration  
2.6  
5.8  
Impairment  
(436.7)  
-
Balance, end of the year  
328.4  
572.5  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
As at December 31, 2023, the Company determined that there was an objective evidence of impairment in relation to its investment  
in Prime arising from an impairment recognized by Prime. The impairment recognized by Prime arose mainly from an increase in the  
discount rate and from changes in the technical assumptions in PMLs 2, 3 and 4 and PPL 261. The Company determined the recoverable  
amount of its investment in Prime by calculating the value in use derived from the discounted cash flow forecast of the dividend stream  
to be received from Prime. The results of the impairment test indicated that the recoverable amount was in excess of the carrying value  
and therefore no impairment was recognized.  
(1) See
Prime’s Statement of Cash Flows for additional information on movements in cash and cash equivalents.  
(2) As at December 31, 2024, the carrying value of non-current assets included a fair value adjustment of $(213.5) million (at December 31,  
2023 - $654.7 million).  
(3) In
the year ended December 31, 2024, $250.0 million of the commitments under Prime’s RBL facility were cancelled, reducing the principal  
amount from $1,050.0 million to $800.0 million. The facility has a 6-year tenor of which $750.0 million has been drawn as at December 31,  
2024 (at December 31, 2023 - $750.0 million).  
(4) In
the year ended December 31, 2024, Prime released the previously recognized provision in relation to the $305.3 million security deposit  
received from Equinor during 2021 under the Securitization Agreement as no comprehensive resolution was reached among all unit parties  
in respect of the tract participation in the Agbami field by December 27, 2024.  
PAGE 59  
The following tables summarizes Prime’s financial information as at December 31, 2024, and December 31, 2023, and for the years  
ended December 31, 2024, and December 31, 2023.  
Prime’s Balance Sheet  
December 31,  
2024  
December 31,  
2023  
As at  
Cash and cash equivalents included in current assets (1)  
399.5  
152.2  
Other current assets  
316.3  
351.5  
Non-current assets (2)  
1,580.1  
2,752.3  
Loans and borrowings included in current liabilities (3)  
(283.7)  
(91.5)  
Other current liabilities  
(215.8)  
(234.4)  
Loans and borrowings included in non-current liabilities (3)  
(466.3)  
(658.5)  
Deferred income tax liabilities included in non-current liabilities  
(403.4)  
(484.4)  
Other non-current liabilities (4)  
(269.9)  
(642.2)  
Net assets of Prime  
656.8  
1,145.0  
Percentage ownership  
50%  
50%  
Proportionate share of Prime’s net assets  
328.4  
572.5  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
(1) As
at December 31, 2024, Prime was in a net underlift position, from a net overlift position at December 31, 2023. This resulted in a profit  
of $171.2 million in the Statement of Net Income and Other Comprehensive Income for the year ended December 31, 2024 (year ended  
December 31, 2023 – loss of $23.6 million).  
(2) Other operating income primarily relates to the release of the previously recognized $305.3 million provision for the
security deposit  
received from Equinor during 2021 and the recognition of an additional $24.4 million receivable pursuant to the Securitization Agreement.  
(3) Other operating costs mainly include Prime’s administrative costs, sales costs and the NDDC Levy, which concerns the Niger Delta  
Development Commission Levy imposed to fund the sustainable development of the Niger Delta region.  
(4) Finance
income for the year ended December 31, 2024, also included a $1.4 million accounting gain on an Asian Dated Brent Collar (year  
ended December 31, 2023 – gain on Asian put option of $1.0 million).  
(5) Finance costs are primarily made up of interest expenses incurred on external facilities and accretion expenses incurred on the  
decommissioning liability. Finance costs for the year ended December 31, 2024, also included a $7.1 million accounting loss on purchased  
Asian put options (year ended December 31, 2023 – nil).  
(6) In the year ended December 31, 2024, there is a tax charge of $120.5 million (year ended December 31, 2023 - tax income of $248.6  
million). Other operating income of $329.7 million in 2024 is subject to ten percent Capital Gains Tax in Nigeria lowering the effective tax  
rate for the year. The income in 2023 was mainly from Prime voluntarily converting the OML 127 license to operate under the new Petroleum  
Industry Act and from renewing the OML 130 license to operate under the new Petroleum Industry Act. Prime voluntarily converted the  
OML 127 license to operate under the new Petroleum Industry Act from March 1, 2023, which resulted in the award of one new petroleum  
mining lease, PML 52. The renewal of the OML 130 license resulted in the award of three new petroleum mining leases and one petroleum  
prospecting license. These cover some of the areas previously covered by OML 130, with some of the areas also relinquished. These are PML  
2 (Akpo field), PML 3 (Egina), PML 4 (Preowei) and PPL 261 (South Egina). PMLs 2, 3 and 4 and PPL 261 operate under the terms of the new  
Petroleum Industry Act as from June 1, 2023. Under these terms, PMLs 2, 3, 4
and 52 and PPL 261 are subject to a 30% Corporate Income  
Tax regime compared to the previous 50% PPT regime which resulted in the release of $62.0 million of deferred income tax liabilities in  
the year ended December 31, 2023, for OML 127 and the release of $346.0 million of deferred income tax liabilities during the year ended  
June 30, 2023, for OML 130.  
(7) The
National Agency for Science and Engineering Infrastructure (NASENI) Levy in the comparative period has been reclassified from other  
operating costs to tax expenses as per IAS 12.  
PAGE 60  
Prime’s Statement of Net Income and Other Comprehensive Income  
December 31,  
2024  
December 31,  
2023  
For the years ended  
Revenue  
782.7  
1,162.2  
Depreciation, depletion and amortization  
(372.0)  
(361.7)  
Production costs  
(146.1)  
(151.0)  
Movement in underlift/overlift (1)  
171.2  
(23.6)  
Royalties  
(70.3)  
(61.7)  
Cost of sales  
(417.2)  
(598.0)  
Gross profit  
365.5  
564.2  
Other operating income (2)  
329.7  
24.7  
Exploration expenses  
(3.1)  
(2.3)  
Impairment  
-
(263.3)  
Other operating costs (3,7)  
(28.2)  
(30.0)  
Finance income (4)  
6.4  
6.8  
Finance costs (5)  
(97.8)  
(89.5)  
Profit before tax  
572.5  
210.6  
Tax (6,7)  
(120.5)  
245.4  
Total profit and comprehensive income for the year  
452.0  
456.0  
Proportionate share of Prime’s profit and comprehensive income  
for the year  
226.0  
228.0  
Proportionate share of Prime’s net income  
226.0  
228.0  
 
Report to Shareholders | December 31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
PAGE 61  
Supplementary information: Prime’s Statement of Cash Flows  
December 31,  
2024  
December 31,  
2023  
For the years ended  
Profit before tax  
572.5  
210.6  
Adjustments for:  
Depreciation, depletion and amortization  
372.0  
361.7  
Impairment  
-
263.3  
Finance costs, net  
91.4  
82.7  
Change in provisions  
(304.0)  
(1.1)  
Interest income received  
5.1  
5.8  
Taxes  
(201.4)  
(322.3)  
Cash generated from operating activities before working capital  
535.6  
600.7  
Changes in working capital  
Changes in trade and other receivables  
156.7  
(31.9)  
Changes in over/underlift balances  
(171.2)  
23.6  
Changes in other working capital balances  
26.1  
(116.6)  
Total changes in working capital  
11.6  
(124.9)  
Net cash generated from operating activities  
547.2  
475.8  
Expenditures on oil and gas properties (1)  
(152.5)  
(177.5)  
Net cash used in investing activities  
(152.5)  
(177.5)  
Payment of dividends to shareholders  
(72.0)  
(350.0)  
Interest expense paid  
(71.9)  
(90.0)  
Derivatives  
(3.2)  
(5.3)  
Drawdown of RBL facility  
-
750.0  
Repayment of loans and borrowings  
-
(782.3)  
Net cash used in financing activities  
(147.1)  
(477.6)  
Foreign exchange variation on cash and cash equivalents  
(0.3)  
(0.2)  
Total cash flow  
247.3  
(179.5)  
Cash and cash equivalents, beginning of the year  
152.2  
331.7  
Cash and cash equivalents, end of the year  
399.5  
152.2  
(1) Expenditures on oil and gas properties for the year ended December 31, 2024, includes the PML 52 license renewal fee. Expenditures on oil  
and gas properties for the year ended December 31, 2023, includes the PMLs 2, 3 and 4 and PPL 261 license renewal fee.  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
In the year ended December 31, 2024, the Company recognized a total loss of $38.7 million (year ended December 31, 2023 – $47.0  
million).  
During the year ended December 31, 2024, the Company determined that there was an indicator for reversal of impairment in respect  
of its investment in Africa Energy following the recognition of a significant share in the loss of Africa Energy. The Company recognized  
an impairment in respect of its investment in Africa Energy during 2023 as a result of the significant decline in market value compared  
to its carrying value. As a result of the recognized loss during the year ended December 31, 2024, the full impairment recognized  
during 2023 has been reversed.  
The Company determined that there was no indicator of impairment for its investment in Eco (Atlantic) Oil and Gas Ltd and also for its  
investment in Impact Oil and Gas Ltd.  
A. Africa
Energy Corp. (“Africa Energy”):  
Africa Energy is an oil and gas exploration company with an interest in South Africa.  
As at December 31, 2024, the market value of the Company’s investment in Africa Energy was $5.8 million based on the share price  
of CAD 0.03 (as at December 31, 2023 - $19.8 million). The carrying value is less than the market value from significant impairments  
recognized by Africa Energy.  
B. Eco
(Atlantic) Oil and Gas Ltd. (“Eco”):  
Eco is an oil and gas exploration company with interests in Guyana, Namibia and South Africa.  
On July 26, 2024, the Company signed an agreement with Eco to acquire an additional 1.0% interest in Block 3B/4B from Azinam  
Limited, Eco’s wholly owned subsidiary, in exchange for all common shares and warrants over common shares held by the Company in  
Eco. Following the announcement of this transaction, the investment in Eco was reclassified to an investment held for sale (see note 7).  
On January 13, 2025, the Company announced that it had completed this transaction.  
C. Impact
Oil and Gas Ltd (“Impact”):  
Impact is an oil and gas exploration company with interests in Namibia and South Africa.  
On January 10, 2024, the Company announced a strategic farmout agreement between its investee company Impact, and TotalEnergies,  
that allows the Company to continue its participation in the Venus oil development project and the follow-on exploration and appraisal  
campaign on Blocks 2913B and 2912 with no upfront costs. As announced on November 1, 2024, this farmout closed following the  
receipt of the final approval from Government of Namibia. At the date hereof, Impact has a 9.5% interest in Blocks 2912 and 2913B  
that is fully carried for all joint venture costs, with no cap, through to first commercial production. Impact has also received a cash  
reimbursement of approximately $99.0 million for its share of the net past costs incurred on the Blocks net to the farm out interests. This  
agreement provides Impact with a full interest-free carry loan over all of Impact’s remaining development, appraisal and exploration  
costs on the Blocks from January 1, 2024 (“Effective Date”), until the date on which Impact receives the first sales proceeds from oil  
production on the Blocks (“First Oil Date”). On and from the First Oil Date, the carry is repayable to TotalEnergies in kind from 60%  
of Impact’s after-tax cash flow, net of all joint venture costs, including capital expenditures. During the repayment of the carry, Impact  
will pool its entitlement barrels with those of TotalEnergies for more regular off-takes and a more stable cashflow profile and will also  
benefit from TotalEnergies’ marketing and sales capabilities.  
PAGE 62  
6. Equity
investments in associates:  
The Company holds the following equity investments in associates:  
Africa Energy  
Corp.  
Eco (Atlantic)  
Impact Oil  
Oil and Gas Ltd  
and Gas Ltd  
Total  
Shares held at December 31, 2024  
276,982,414  
54,941,744  
449,464,396  
Ownership at December 31, 2024  
19.67%  
14.84%  
39.46%  
At January 1, 2023  
46.6  
14.7  
76.0  
137.3  
Share of loss from equity investments  
(1.7)  
(0.6)  
(19.1)  
(21.4)  
Gain on dilution of equity investment  
-
-
1.0  
1.0  
Impairment of equity investments  
(20.1)  
(6.5)  
-
(26.6)  
Additional investment through private placement  
-
-
44.4  
44.4  
At December 31, 2023  
24.8  
7.6  
102.3  
134.7  
Share of loss from equity investments  
(42.1)  
(0.6)  
(16.1)  
(58.8)  
Reversal of impairment of equity investments  
20.1  
-
-
20.1  
Additional investments  
-
-
88.6  
88.6  
Reclassification to Investment held for sale  
-
(7.0)  
-
(7.0)  
At December 31, 2024  
2.8  
-
174.8  
177.6  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
In the year ended December 31, 2024, the Company acquired an additional 105,918,737 shares from various parties. The total cost for  
these purchases was approximately $88.6 million.  
After these transactions the Company’s shareholding in Impact increased to approximately 39.5%.  
The following tables summarize Impact’s financial information for the years ended December 31, 2024, and December 31, 2023.  
The Company is not aware of any material changes to the financial information.  
(1) As at December 31, 2024, the carrying value of non-current assets included a fair value adjustment of $96.4 million (as at December 31,  
2023 - $40.9 million).  
(2) In
the year ended December 31, 2024, the Company’s ownership in Impact changed from 31.1% to 39.5% (year ended December 31, 2023  
– changed from 30.9% to 31.1% through the year).  
7. Investment
held for sale  
On July 26, 2024, the Company signed an agreement with Eco to acquire an additional 1.0% interest in Block 3B/4B from Azinam  
Limited, Eco’s wholly owned subsidiary, in exchange for all common shares and warrants over common shares held by the Company in  
Eco. Following the announcement of this transaction, the investment in Eco was reclassified to an investment held for sale. On January  
13, 2025, the Company announced that it had completed this transaction with the result that the Company is no longer a shareholder  
in Eco.  
PAGE 63  
Balance Sheet  
December 31,  
2024  
December 31,  
2023  
As at  
Cash and cash equivalents included in current assets  
125.1  
76.1  
Other current assets  
1.7  
0.7  
Non-current assets (1)  
316.5  
295.4  
Current liabilities  
(0.8)  
(43.3)  
Non-current liabilities  
-
-
Net assets of Impact  
442.5  
328.9  
Percentage ownership (2)  
39.5%  
31.1%  
Proportionate share of Impact's net assets  
174.8  
102.3  
Statement of Net Loss and Comprehensive Loss from continuing operations  
December 31,  
2024  
December 31,  
2023  
For the years ended  
Net loss and comprehensive loss from continuing operations  
(40.8)  
(61.4)  
Proportionate share of Impact’s loss  
(16.1)  
(19.1)  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
Intangible exploration expenditures and impairments:  
As at December 31, 2024, $29.3 million of expenditures have been capitalized as intangible exploration assets (as at December 31,  
2023 - $19.1 million). These expenditures relate to the Company’s share of exploration and appraisal stage projects which are pending  
the determination of proved and probable petroleum reserves.  
As at December 31, 2024, no intangible exploration assets have been transferred to oil and gas interests as commercial reserves have  
not been established and technical feasibility for extraction has not been demonstrated. Capitalized intangible exploration assets relate  
to various countries as summarized in the following table:  
Equatorial Guinea:  
As at December 31, 2024, the carrying amount of the Company’s intangible exploration assets for its 80% interest in Blocks EG-18 and  
EG-31, located offshore Equatorial Guinea, was $17.9 million (as at December 31, 2023 – $13.4 million). In the year ended December  
31, 2024, expenditure of $4.5 million was incurred (year ended December 31, 2023 - $13.4 million).  
South Africa:  
As at December 31, 2024, the carrying amount of the Company’s intangible exploration assets for its 17.0% (as at December 31, 2023  
– 20.0%) participating interest in the Block 3B/4B Exploration Right, located in South Africa, was $11.4 million (as at December 31, 2023  
- $5.7 million). In the year ended December 31, 2024, expenditure of $5.7 million was incurred (year ended December 31, 2023 - $0.6  
million) which included $9.0 million payments to Azinam Limited, a wholly owned subsidiary of Eco, for the increase of the Company’s  
operated interest in Block 3B/4B by 6.25% (see also note 19B). Government approval was obtained on January 19, 2024, resulting in  
payment of the second tranche of $2.5 million to Azinam and a farm-out deal with a third party was completed on August 28, 2024,  
resulting in the payment of the third tranche of $4.0 million to Azinam. The first tranche of $2.5 million was paid during 2023 and was  
reclassified from prepayments to intangible exploration assets following government approval. There is one final tranche to be paid of  
$1.5 million when the first exploration well has been spudded on the Block.  
OnAugust28,2024,theCompany announcedthecompletionof the strategicfarm downagreement withTotalEnergiesand QatarEnergy  
for the Block 3B/4B Exploration Right, located in South Africa. The Company retained a 17.0% interest in Block 3B/4B and operatorship  
was transferred to TotalEnergies. The Company will receive, subject to achieving certain milestones as defined in the agreement,  
staged cash payments for a total amount of $10.0 million of which $3.3 million was received at closing of the transaction with the  
remaining balance to be received in two successive payments conditional upon achieving key operational and regulatory milestones.  
The Company will also be fully carried for all joint venture costs, up to a cap, that is repayable to TotalEnergies and QatarEnergy from  
future production, and which is expected to be adequate to fund the Company’s share of drilling for up to two wells on the licence.  
On July 26, 2024, the Company signed an agreement with Eco to acquire an additional 1.0% interest in Block 3B/4B from Azinam  
Limited, Eco’s wholly owned subsidiary, in exchange for all common shares and warrants over common shares held by the Company  
in Eco. On January 13, 2025, the Company announced that it had completed this transaction. The Company’s interest in Block 3B/4B  
increased by 1.0% to 18.0% and the Company ceased to be a shareholder in Eco. Africa Oil will benefit from the carry agreed between  
Eco, TotalEnergies and QatarEnergy for this incremental interest.  
PAGE 64  
8. Intangible
exploration assets:  
December 31,  
2024  
December 31,  
2023  
Net carrying amount, beginning of the year  
19.1  
63.6  
Intangible exploration expenditures  
10.2  
17.7  
Impairment of intangible exploration assets  
-
(62.2)  
Net carrying amount, end of the year  
29.3  
19.1  
December 31,  
2024  
December 31,  
2023  
Equatorial Guinea  
17.9  
13.4  
South Africa  
11.4  
5.7  
Net carrying amount, end of the year  
29.3  
19.1  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
9. Other
tangible fixed assets:  
Other tangible fixed assets mainly relate to the lease of an office building for a period of 5 years that meets the criteria for recognition as  
right-of-use asset as per IFRS 16 and the Company recognized a corresponding financial liability. The long-term portion of the liability  
as at December 31, 2024, amounted to $2.6 million and the short term portion of the liability as at December 31, 2024, amounted to  
$0.7 million (as at December 31, 2023 – nil).  
During the year ended December 31, 2024, the Company recognized depreciation charges for the right-of-use asset of $0.6 million  
(year ended December 31, 2023 – nil) and recognized interest expenses on the lease liability of $0.4 million (year ended December  
31, 2023 – nil).  
10. Accounts
payable and accrued liabilities:  
Accounts payable and accrued liabilities includes liabilities and exit costs associated with the withdrawal from Kenya. In accordance  
with the JOA and PSC, the Company retains economic participation for activities prior to June 30, 2023, which might result in additional  
costs for the Company. The remaining balance primarily contains working capital related liabilities and accruals.  
The fair value of the provision for site restoration was based on the estimated future cash flows to decommission the exploration and  
development properties at the end of their useful life.The discount rate used to determine the net present value of the decommissioning  
obligation was 3.5% (as at December 31, 2023 – 3.5%) based on a risk-free rate with a similar maturity to that of the timing of the  
expected cash flows and a long-term inflation rate of 2% (as at December 31, 2023 – 2%).  
The undiscounted costs at December 31, 2024, are estimated to be $7.9 million, net to the Company, and include the costs of physical  
well abandonment and site remediation. The costs are estimated to be incurred in approximately 25 years. At December 31, 2024, the  
total provision is $5.7 million (as at December 31, 2023 – $5.5 million).  
12. Debt:  
On May 21, 2024, the Company amended its existing Corporate Facility. At any point before Prime refinances its debt, the availability  
under the Corporate Facility will now be $65.0 million until June 30, 2025, $43.0 million from July 1, 2025, until June 30, 2026, and  
$22.0 million from July 1, 2026, to May 21, 2027, i.e. its new final maturity date. After Prime refinances its debt, the availability under  
the Corporate Facility will be $125.0 million until June 30, 2026, and $63.0 million from July 1, 2026, until May 21, 2027. Commitment  
fees of 40% of the margin are payable on the undrawn available portion of the Corporate Facility and commitment fees of 15% of the  
margin are payable on the unavailable portion of the Corporate Facility. The Corporate Facility carries interest of 1 month-SOFR plus a  
margin of 6.5% in the first year from May 21, 2024, 7.0% in the second year and 7.5% in the third year.  
Any loan repayments are calculated to be protective of the Company’s liquidity position. Prior to maturity, repayments under the loan  
are made in the month a dividend is received from Prime. The Company’s loan repayments reduce commensurately with any reduction  
in dividends from Prime. If drawn, the loan principal would be repaid by the lesser of 100% of the dividends received from Prime,  
and of an amount that ensures the Company holds a minimum projected consolidated cash balance in the six months following the  
repayment.  
The Company provided security in respect of the Corporate Facility mainly in the form of a share pledge over the shares of PetroVida  
(which holds 50% of Prime), and a charge over the bank account into which the Prime dividends are paid.  
The Corporate Facility is subject to financial and liquidity covenants. The Company shall ensure that total net debt to adjusted EBITDAX  
on June 30 and December 31 of each year is no greater than 3.0:1, the FLCR ratio on March 31 and September 30 of each year is not  
less than 1.1:1 and that from March 31 and September 30 of each year during each of the four successive quarters there are or will be  
sufficient funds available to the group to meet all relevant expenditure to be incurred in each of these four successive quarters as they  
fall due. The Company has been in compliance with the covenants in the year ended December 31, 2024.  
PAGE 65  
11. Provision
for site restoration:  
December 31,  
2024  
December 31,  
2023  
Balance, beginning of the year  
5.5  
5.3  
Unwinding of discount  
0.2  
0.2  
Balance, end of the year  
5.7  
5.5  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
The Company launched a Normal Course Issuer Bid (share buyback) program on September 27, 2022, that ended on September 26,  
2023. During the year ended December 31, 2023, a total of 3.1 million Africa Oil common shares were repurchased and cancelled  
and across the entire share buyback program, a total of 20.5 million Africa Oil common shares were repurchased and cancelled. The  
Company launched a new share buyback program on December 6, 2023, that ended on December 5, 2024. During the year ended  
December 31, 2024, a total of 24.0 million Africa Oil common shares were repurchased and cancelled under this share buyback  
program. The Company launched a new share buyback program on December 6, 2024, under which 2.5 million Africa Oil common  
shares were repurchased, of which 2.2 million Africa Oil common shares were cancelled during the year ended December 31, 2024. In  
the year ended December 31, 2024, a total of 26.5 million Africa Oil common shares were repurchased of which 26.2 million Africa Oil  
common shares had been cancelled as at December 31, 2024.  
The balance of share capital has been reduced by determining the average per-share amounts in the share capital account, before  
cancellation of shares repurchased, and applying this to the numbers of shares cancelled. The difference between the reduction in  
share capital and the amount paid for shares repurchased has been added to the balance of contributed surplus.  
In the year ended December 31, 2024, the Board of Directors approved two dividends of $0.025 per share which were declared and  
paid in March and September 2024 for a total amount of $22.6 million.  
14. Commitments
and contingencies:  
A. Investment
in Prime:  
Under the Prime Sale and Purchase Agreement completed on January 14, 2020, a deferred payment of $118.0 million, subject to  
adjustment, may be due to the seller contingent upon the timing of the final PML 52 tract participation in the Agbami field. The signing  
of the Securitization Agreement by Prime in 2021 led to the Company reassessing its view of the likelihood of making a contingent  
consideration payment to the seller. The signing of the Securitization Agreement by Prime does not constitute a redetermination of the  
tract participation and therefore does not trigger the payment of a contingent consideration under the Sale and Purchase Agreement  
but, at the Company’s discretion, could trigger discussions with the seller. The outcome of this process is uncertain. In 2021, the  
Company recorded $32.0 million as contingent consideration and increased this to $37.8 million in the year ended December 31,  
2023, and to $40.4 million in the year ended December 31, 2024, increasing the Company’s investment in Prime.  
B. Withdrawal
from Kenya:  
On May 23, 2023, the Kenya entities along with TotalEnergies submitted withdrawal notices to the remaining joint venture party on  
Blocks 10BB, 13T and 10BA in Kenya, to unconditionally and irrevocably, withdraw from the entirety of the JOAs and PSCs for these  
concessions. The Company concurrently submitted notices to Ministry of Energy and Petroleum, requesting the government’s consent  
to transfer all of its rights and future obligations under the PSCs to its remaining joint venture party. Government consent to the transfer  
remained outstanding as at December 31, 2024. In accordance with the JOA and PSC the Company retains economic participation for  
activities prior to June 30, 2023, which might result in additional costs for the Company. The Company continues to monitor the claim  
made against the operator by local communities in relation to past operations which may relate to the period prior to June 30, 2023.  
No provision has been recognized for this as at December 31, 2024.  
PAGE 66  
13. Share
capital:  
A. The
Company is authorized to issue an unlimited number of common shares with no par value.  
B. Issued:  
December 31,  
2024  
December 31,  
2023  
Shares  
Amount  
Shares  
Amount  
Balance, beginning of the year  
463,831,871  
1,265.3  
462,790,680  
1,267.7  
Settlement of Performance Share Units  
577,968  
1.1  
1,700,042  
3.5  
Settlement of Restricted Share Units  
271,063  
0.5  
546,332  
1.1  
Exercise of Share Options  
647,000  
0.5  
1,882,000  
1.4  
Cancellation of shares repurchased  
(26,249,732)  
(71.6)  
(3,087,183)  
(8.4)  
Balance, end of the year  
439,078,170  
1,195.8  
463,831,871  
1,265.3  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
Finance income includes interest earned on both cash in bank accounts and short-term deposits.  
Finance expense includes interest and fees incurred on the Corporate Facility (see note 12).  
In the year ended December 31, 2024, the Company made a loss and therefore all potential dilutive shares are considered antidilutive.  
In the year ended December 31, 2023, the Company used an average market price of CAD $2.79 per share to calculate the dilutive  
effect of share purchase options. Dilutive securities include share purchase options, RSUs and PSUs as the inclusion of these reduces  
the net income per share. In the year ended December 31, 2024, 200,336 options, 1,174,553 RSUs and 5,655,586 PSUs were anti-  
dilutive and were not included in the calculation of dilutive income per share (year ended December 31, 2023, 473,549 options were  
anti-dilutive). PSU’s are awarded a performance multiple ranging from nil to 200% which leads to an increase in the dilutive and anti-  
dilutive potential of these instruments.  
PAGE 67  
15. Finance
income and expense:  
Finance income and expense for the years ended December 31, 2024, and December 31, 2023, is comprised of the following:  
December 31,  
2024  
December 31,  
2023  
For the years ended  
Finance income  
7.6  
7.8  
Finance expense  
(4.9)  
(7.6)  
16. Net
(loss)/ income per share:  
December 31,  
2024  
December 31,  
2023  
For the years ended  
Weighted Average  
Weighted Average  
Number of  
shares  
Per share  
amounts  
Net  
Number of  
shares  
Per share  
amounts  
Net loss  
income  
Basic (loss)/ income per share  
Net (loss)/ income attributable to  
common shareholders  
(279.1)  
449,431,803  
(0.62)  
87.1  
462,231,061  
0.19  
Effect of dilutive securities  
-
-
-
-
10,711,426  
-
Dilutive (loss)/ income per share  
(279.1)  
449,431,803  
(0.62)  
87.1  
472,942,487  
0.18  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
17. Share-based
compensation:  
In the year ended December 31, 2024, the Company recognized a total of $1.5 million in share-based compensation expense relating  
to the Long-Term Incentive Plan (“LTIP”) and Stock Option Plan (year ended December 31, 2023 – $11.3 million).  
A. Share
purchase options:  
At the 2019 Annual General Meeting, held on April 18, 2019, the Company’s shareholders approved the terms of the stock option plan  
(the “Plan”).
The Plan provides that an aggregate number of Common Shares which may be reserved for issuance as incentive share  
purchase options shall not exceed 3.5% of the Common Shares outstanding, and option exercise prices will reflect current trading  
values of the Company’s shares.
The term of any option granted under the Plan will be fixed by the Board of Directors and may not  
exceed five years from the date of grant. Vesting periods are determined by the Board of Directors and no optionee shall be entitled  
to a grant of more than 5% of the Company’s outstanding issued shares. The Board no longer grants share purchase options under the  
Plan and instead only awards PSUs to executives and staff.  
In the year ended December 31, 2024, the Company did not recognize a share based payment expense (year ended December 31,  
2023 - nil), related to share purchase options.  
B. Performance
share units (“PSUs”):  
On April 19, 2016, the shareholders of the Company approved a new LTIP. Under the terms of the LTIP, eligible plan participants may be  
granted PSUs and RSUs. The LTIP provides that an aggregate number of Common Shares which may be reserved for issuance in respect  
of grants of RSUs and PSUs shall not exceed 28,256,682 shares, which represents approximately 6% of the issued and outstanding  
Common Shares of the Company as at December 31, 2024.
PSUs are notional share instruments which track the value of the Common  
Shares and are subject to non-market performance conditions related to key strategic, financial and operational milestones. PSUs cliff  
vest three years from the date of grant, at which time the Board of Directors will assign a performance multiple ranging from nil to 200%  
to determine the ultimate vested number of PSUs. PSUs are awarded to executives and from 2022 are awarded to staff, replacing share  
options. They
may be settled in shares issued from treasury or cash, at the discretion of the Board of Directors.  
PAGE 68  
The Company’s outstanding share purchase options are as follows:  
December 31,  
2024  
December 31,  
2023  
Weighted average  
Weighted average  
Number of  
options  
Exercise price  
(CAD$)  
Number of  
options  
Exercise price  
(CAD$)  
Outstanding, beginning of the year  
1,104,616  
1.20  
3,000,616  
1.16  
Forfeited  
-
-
(14,000)  
1.21  
Exercised  
(647,000)  
1.17  
(1,882,000)  
1.15  
Balance, end of the year  
457,616  
1.23  
1,104,616  
1.20  
The following table summarizes information regarding the Company’s share purchase options outstanding and exercisable at  
December 31, 2024:  
Weighted Average  
Number  
Number  
Weighted average remaining  
contractual life in years  
Exercise price (CAD$/share)  
outstanding  
exercisable  
1.21  
435,000  
435,000  
0.95  
1.61  
22,616  
22,616  
1.63  
457,616  
457,616  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
In July 2024, 3,482,143 PSUs vested in which 2,904,175 PSUs were settled for a cash payment of $5.3 million and the remaining were  
settled via the issuance of Common Shares of the Company.  
The Company accounts for PSUs as share-based awards whereby the estimated fair value of the grant is expensed evenly throughout the  
remaining vesting period. In the year ended December 31, 2024, the Company recognized $0.9 million in share-based compensation  
expenses relating to the PSUs (year ended December 31, 2023 - $10.3 million) with the decrease mainly caused by a lower Africa Oil  
share price in combination with changes in the expected outcome of performance multiples.  
C. Restricted
share units (“RSUs”):  
RSUs granted to Non-Executive Directors cliff vest three years from the date of grant. The estimated fair value of RSUs are expensed  
evenly throughout the remaining vesting period. RSUs are no longer awarded to executives, and only PSU’s are awarded. RSUs may be  
settled in shares issued from treasury or cash, at the discretion of the Board of Directors.  
In March 2024, 645,386 RSUs vested with 374,324 being settled for a cash payment of $0.6 million and the remaining were settled via  
the issuance of Common Shares of the Company.  
The Company accounts for RSUs as share-based awards whereby the estimated fair value of the grant is expensed evenly throughout the  
remaining vesting period. In the year ended December 31, 2024, the Company recognized $0.6 million in share-based compensation  
relating to the RSUs (year ended December 31, 2022 - $1.0 million) with the decrease mainly caused by a lower Africa Oil share price.  
18. Capital
management:  
The Company’s objective when managing capital structure is to maintain balance sheet strength in order to ensure the Company’s  
strategic exploration, appraisal and business development objectives are met while providing an appropriate return to shareholders  
relative to the risk of the Company’s underlying assets.  
The Company manages its capital structure and makes adjustments to it based on changes in economic conditions and the risk  
characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may issue additional shares,  
issue debt, execute working interest farm-out arrangements and revise its capital expenditures program.
In addition, the Company  
manages its cash and cash equivalents balances based on forecasted capital outlays and foreign exchange risks in order to ensure that  
the risk of negative foreign exchange effects are minimized while ensuring that interest yields on account balances are appropriate.  
The Company considers its capital structure to include shareholder’s equity, debt and working capital. The Company does not have  
externally imposed capital requirements.  
PAGE 69  
The Company’s PSUs outstanding are as follows:  
December 31,  
2024  
December 31,  
2023  
Number of PSUs  
Number of PSUs  
Outstanding, beginning of the year  
7,122,839  
7,641,886  
Granted  
3,968,993  
3,448,710  
Cancelled  
-
(572,935)  
Vested  
(3,482,143)  
(3,394,822)  
Balance, end of the year  
7,609,689  
7,122,839  
The Company’s RSUs outstanding are as follows:  
December 31,  
2024  
December 31,  
2023  
Number of RSUs  
Number of RSUs  
Outstanding, beginning of the year  
1,278,318  
2,066,248  
Granted  
541,621  
296,211  
Vested  
(645,386)  
(1,084,141)  
Balance, end of the year  
1,174,553  
1,278,318  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
19. Related
party transactions:  
A. Transactions
with Africa Energy:  
On December 19, 2022, Africa Energy announced that it had secured a $5.0 million promissory note of which $2.0 million was provided  
by the Company and the remaining by other parties. On November 7, 2023, the promissory note provided by the Company and other  
parties to Africa Energy was increased by $3.3 million with $1.5 million of the increase to be provided by the Company of which $1.0  
million was provided in the year ended December 31, 2024, and $0.5 million was provided in the year ended December 31, 2023. The  
note is unsecured and matures on March 31, 2025, when the principal and accrued interest are due in full. The note carries an annual  
interest rate of 15%. The note is repayable pro rata any time before maturity without penalty. In the year ended December 31, 2024,  
interest on the note amounted to $0.5 million (year ended December 31, 2023 - $0.3 million).  
The Company has technical and administrative cost sharing agreements with Africa Energy totaling $0.5 million in the year ended  
December 31, 2024 (year ended December 31, 2023 - $0.6 million).  
B. Transactions
with Eco:  
During the year ended December 31, 2023, Africa Oil SA Corp. signed a legally binding Assignment and Transfer agreement with  
Azinam Limited (“Azinam”), a wholly owned subsidiary of Eco, to acquire an additional 6.25% interest in Block 3B/4B for a total cash  
consideration of up to $10.5 million, to be paid in tranches on the following milestones:  
•
$2.5 million within 30 business days after July 10, 2023;  
•
$2.5 million upon the SA government’s approval for the transfer of the 6.25% interest to Africa Oil SA Corp.;  
•
$4.0 million upon the completion of a farm-out deal to a third party; and  
•
$1.5 million upon spudding of the first exploration well on the Block.  
The first tranche was paid during 2023, the second and third tranches were paid during 2024. On July 26, 2024, the Company signed  
an agreement with Eco to acquire an additional 1.0% interest in Block 3B/4B from Azinam Limited, Eco’s wholly owned subsidiary, in  
exchange for all common shares and warrants over common shares held by the Company in Eco. On January 13, 2025, the Company  
announced that it had completed this transaction. The Company’s interest in Block 3B/4B increased by 1.0% to 18.0% and the Company  
ceased to be a shareholder in Eco. Africa Oil will benefit from the carry agreed between Eco, TotalEnergies and QatarEnergy for this  
incremental interest.  
C. Transactions
with Impact:  
On March 24, 2023, the Company subscribed for 39,455,741 shares in Impact for $31.4 million, payable in two tranches, and directly  
following the transaction the Company held 31.1% of the enlarged share capital in Impact. The first tranche of $14.9 million was paid  
on April 21, 2023, and the final tranche of $16.5 million was paid on July 21, 2023.  
On October 6, 2023, the Company subscribed for 16,524,058 shares in Impact for $13.0 million and directly following the transaction  
the Company continued to hold 31.1% of the enlarged share capital in Impact.  
D. Transaction
with Director:  
On November 23, 2023, the Company entered into an arm’s length agreement with Andrew Bartlett to acquire 106,500 shares in  
Impact at a price of £0.65 per share for a total amount of £69,225. This amount was paid during 2023 and the transaction completed  
on January 16, 2024.  
E. Remuneration
of Directors and Senior Management:  
Remuneration of Non-Executive Directors and Senior Management includes all amounts earned and awarded to the Company’s  
Board of Directors and Senior Management. Senior Management includes the Company’s President and Chief Executive Officer, Chief  
Financial Officer, Chief Commercial Officer, Chief Operating Officer, Chief Technical Officer and the Chief Legal Officer.  
Directors’ fees include Board and Committee Chair retainers. Management’s short-term wages and benefits include salary, benefits,  
bonuses and any other cash-based compensation earned or awarded during the year. Share-based compensation includes expenses  
related to the Company’s share purchase option plan as well as the Long-Term Incentive Plan.  
PAGE 70  
December 31,  
2024  
December 31,  
2023  
For the years ended  
Non-Executive Directors' fees  
0.5  
0.5  
Non-Executive Directors' share-based compensation  
0.6  
1.1  
Managements’ short-term wages and benefits  
7.3  
5.4  
Managements’ share-based compensation  
0.5  
6.5  
8.9  
13.5  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
20. Subsidiaries:  
The Company has the following wholly owned subsidiaries; Africa Oil Holdings B.V. (Netherlands), Africa Oil Turkana B.V. (Netherlands),  
Africa Oil Kenya B.V. (Netherlands), PetroVida Holding B.V. (Netherlands), Africa Oil Alpha B.V (Netherlands), Africa Oil Beta B.V  
(Netherlands), Africa Oil Gamma B.V (Netherlands), Africa Oil Turkana Ltd. (Kenya), Centric Energy (Kenya) Ltd. (Kenya), Africa Oil UK  
Limited (United Kingdom), Africa Oil Papa Corp. (British Columbia) and Africa Oil SA Corp. (British Columbia).  
21. Financial
risk management:  
The Company’s activities expose it to a variety of financial risks that arise as a result of its exploration, appraisal and financing activities  
such as:  
•
credit risk;  
•
liquidity risk; and  
•
market risk.  
This note presents information about the Company’s exposure to each of the above risks, the Company’s objectives, policies and  
processes for measuring and managing risk, and the Company’s management of capital. Further quantitative disclosures are included  
throughout these consolidated financial statements.  
A. Credit
risk:  
Credit risk is the risk of loss if counterparties do not fulfill their contractual obligations. The majority of the Company’s credit exposure  
relates to amounts due from the Company’s joint venture parties and a credit facility with Africa Energy. The risk of the Company’s  
joint venture parties defaulting on their obligations per their respective joint operating and farmout agreements is mitigated as there  
are contractual provisions allowing the Company to default joint venture parties who are non-performing and reacquire any previous  
farmed out working interests. The maximum exposure for the Company is equal to the sum of its cash and accounts receivable. As at  
December 31, 2024, the Company held $1.1 million (as at December 31, 2023 - $2.6 million) of cash in financial institutions outside  
of Canada, the Netherlands, Sweden and the UK. The Company also held $20.9 million (as at December 31, 2023 – $30.2 million) in  
short-term deposits in countries outside of Canada, the Netherlands and the UK with lending banks in the Corporate Facility with stable  
credit ratings.  
B. Liquidity
risk:  
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. Liquidity describes a  
company’s ability to access cash. Companies operating in the upstream oil and gas industry, during the exploration and development  
phase, require sufficient cash in order to fulfill their work commitments in accordance with contractual obligations, deliver stated  
shareholder returns, and to be able to potentially acquire strategic oil and gas assets.  
The Company will potentially issue equity and debt and enter into farmout agreements with joint venture parties to ensure the Company  
has sufficient available funds to meet current and foreseeable financial requirements. The Company actively monitors its liquidity to  
ensure that its cash flows and working capital are adequate to support these financial obligations and the Company’s capital programs.  
The Company’s primary source of cash flow relates to dividends received from Prime.Asignificant reduction in or infrequent distributions  
could have an adverse effect on the Company’s ability to meet its commitments. The Company has senior members sitting on Prime’s  
Supervisory Board and Audit Committee, monitoring cash forecasts and setting financial and risk management policies to manage  
Prime’s dividend forecasts.  
At the date of this report, the Company has $65.0 million of the Corporate Facility available which improves the Company’s access  
to liquidity to fund operations and acquisitions as required. Any loan repayments are calculated to be protective of the Company’s  
liquidity position and if drawn, the Corporate Facility would be repaid from the proceeds of dividends received from Prime, while  
ensuring the Company preserves a sufficient minimum cash balance to conduct operations. The Corporate Facility is available until May  
21, 2027, and has a maturity of May 21, 2027 (see note 12).  
The Company will also adjust the pace of its exploration and appraisal activities to manage its liquidity position. The existing cash  
balance, the undrawn amount of the Corporate Facility and expected dividends from its investment in Prime, are sufficient to fund the  
Company’s obligations as they become due.  
The Company has no maturities of its material contractual financial liabilities in excess of six months as at December 31, 2024, apart  
from the lease liability as mentioned in note 9 (as at December 31, 2023 – no maturities of its material contractual liabilities in excess  
of six months).  
C. Market
risk:  
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, commodity prices and share prices,  
will affect the Company’s income or the value of the financial instruments.  
i. Foreign
currency exchange rate risk:  
The Company is exposed to changes in foreign exchange rates as expenses in international subsidiaries, oil and gas expenditures, or  
financial instruments may fluctuate due to changes in rates.
The Company’s exposure to foreign currency exchange risk is mitigated by  
the fact that the Company sources the majority of its capital projects and expenditures in US dollars. The Company has not entered into  
any instruments to manage foreign exchange risk.  
PAGE 71  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
ii. Interest
rate risk:  
The Corporate Facility has a variable interest rate, that is referenced to SOFR and will expose the Company to interest rate risk over the  
term of the loan if drawn.  
iii. Commodity
price risk:  
The Company has an equity holding in Prime (see note 5), which has three producing fields within PMLs 2, 3 and 52, all with significant  
levels of production. A change in commodity prices may affect the dividends received from this investment. Prime employs a crude  
marketing strategy that maintains the 50% - 70% coverage target for the next 12-months’ scheduled cargoes. These contracts are with  
counterparties including oil supermajors. The counterparties are part of groups with investment grade credit ratings.  
iv. Share
price risk:  
The Company has shareholdings in Africa Energy and Eco, which are entities listed on Canadian and European Stock Exchanges. The  
share price of these investments can be volatile and a change in share price may affect the amount that the Company can realize for  
these investments.  
22. Financial
instruments:  
As at December 31, 2024, and December 31, 2023, assets and liabilities that are measured at fair value are classified into levels  
reflecting the method used to make the measurements. Fair values of assets and liabilities included in Level 1 are determined by  
reference to quoted prices in active markets for identical assets and liabilities. Assets and liabilities in Level 2 include valuations using  
inputs other than quoted prices for which all significant inputs are observable, either directly or indirectly. Level 3 valuations are based  
on inputs that are unobservable and significant to the overall fair value measurement.  
The investment in Prime has been measured at fair value using Level 1 valuation methods. In 2023, the investment in Prime was fair  
valued using Level 3 valuation methods.  
The provision for contingent consideration has been measured at fair value using Level 2 valuation methods.  
The Company’s cash and cash equivalents, accounts receivable and prepaid expenses, loan to associate company, accounts payable  
and liabilities are recorded at amortized cost. The fair value of cash and cash equivalents, accounts receivable, accounts payable and  
accrued liabilities approximate their carrying value due to the short-term maturity of these instruments.
Assessment of the significance  
of a particular input to the fair value measurement requires judgement and may affect the placement within the fair value hierarchy  
level.  
23. Income
taxes:  
The tax rate consists of the combined federal and provincial statutory tax rates for the Company for the years ended December 31,  
2024, and December 31, 2023. Substantially all of the differences between actual income tax expense and the expected Canadian  
federal and provincial statutory corporate income tax expense/ (recovery) related to losses not recognized.  
The following table reconciles the expected tax (recovery)/ expense calculated at the Canadian statutory rate with the actual tax recovery.  
December 31,  
December 31,  
For the years ended  
2024  
2023  
Net (loss)/ profit and comprehensive(loss)/ profit  
(279.1)  
87.1  
Combined federal and provincial statutory income tax rate  
27.0%  
27.0%  
Expected (recovery)/ expense  
(75.4)  
23.5  
Foreign rate differences  
0.1  
(0.1)  
Permanent differences  
0.1  
0.2  
Share-based compensation  
0.4  
2.8  
Equity earnings  
67.4  
(48.9)  
Non-taxable expense items  
-
16.8  
Unrecognized tax losses  
7.4  
5.7  
Tax charge  
-
-
The Company has estimated non-capital losses carried forward of $151.1 million in Canada which expire from 2025 through 2044.  
The Company has estimated capital losses carried forward of $12.9 million in Canada. The Company has estimated deductible  
temporary differences of $132.6 million in Canada.  
No deferred tax asset or liability is recognized at December 31, 2024.  
PAGE 72  
 
Report to Shareholders
| December
31, 2024  
Africa Oil Corp.  
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED  
25. Subsequent
events:  
On January 13, 2025, the Company announced it completed a transaction with Eco and Azinam, a subsidiary of Eco, whereby Azinam  
has transferred a 1.0% interest in Block 3B/4B to Africa Oil. In consideration, Africa Oil has exchanged the shares and warrants that it  
held in Eco for cancellation.  
On January 22, 2025, Impact announced it would be paying a dividend of $0.0702 per share to its shareholders totalling approximately  
$80.0 million. On January 29, 2025, the dividend payment net to the Company’s shareholding of $31.6 million was received.  
From January 1, 2025, to February 21, 2025, a total of 5,023,853 Africa Oil Common Shares have been repurchased under the Normal  
Course Issuer Bid, for an amount of approximately $6.9 million and 2,475,600 shares have been cancelled.  
On February 27, 2025, the Company announced its intention to declare the first quarterly dividend, under its proposed new dividend  
policy, of $25 million or approximately $0.037 per share, on the closing of the Proposed Reorganization. This and other future dividend  
distributions are subject to customary board approval and consents.  
PAGE 73  
24. Supplementary
information:  
The following table reconciles the changes in non-cash working capital as disclosed in the consolidated statement of cash flows:  
December 31,  
2024  
December 31,  
2023  
For the years ended  
Relating to  
Changes in current assets  
(1.5)  
(4.2)  
Changes in current liabilities  
(13.3)  
(24.6)  
Changes in non-cash working capital  
(14.8)  
(28.8)  
Relating to:  
Operating activities  
(9.9)  
(30.8)  
Investing activities  
(4.9)  
2.0  
Changes in non-cash working capital  
(14.8)  
(28.8)  
 
AFRICAOILCORP.COM