Shares of Africa Oil saw a substantial increase in value on Wednesday morning following the announcement of a farmout agreement signed by one of its investees. The agreement involves a subsidiary of TotalEnergies acquiring a share in Africa Oil's offshore Namibia interests.
As of 9:48 a.m. ET, Africa Oil shares were trading 6.7% higher at 2.54 Canadian dollars ($1.90).
The Canadian oil and gas company revealed that Impact Oil and Gas Namibia, a wholly-owned subsidiary of Impact Oil and Gas, has successfully entered into a farmout agreement with TotalEnergies EP Namibia. This agreement grants TotalEnergies a share of Impact's interests in two blocks within their exploration project in offshore southern Namibia.
Upon the official closing of the agreement, Impact will receive cash reimbursement for its portion of the past costs incurred on the Blocks net to the farmout interests, estimated to be around $99 million.
Africa Oil's CEO, Roger Tucker, expressed satisfaction with the farmout agreement, highlighting its ability to provide an attractive growth opportunity for the company in the energy project. He further emphasized that this venture is expected to add significant reserves and production to Africa Oil's portfolio in the coming years.
