Africa Energy Announces 2023 Year End Results

CNW Group
7 min read

In This Article:

VANCOUVER, BC, March 27, 2024 /CNW/ - Africa Energy Corp. (TSXV: AFE) (Nasdaq First North: AEC) ("Africa Energy" or the "Company"), an oil and gas exploration company, announces financial and operating results for the year ended December 31, 2023. View PDF version

Rob Nicolella, Chief Executive Officer of Africa Energy, said, "Our year end results have been negatively impacted by a US$114.2 million non-cash loss on revaluation of our investment in Block 11B/12B, which was due to changes in base assumptions for discount rates, future development costs and future operating costs applied in the discounted cash flow model for valuing our interest in Block 11B/12B. Notwithstanding, the government of South Africa is focused on resolving the current energy crisis and believes that natural gas will play a critical role in the energy transition, including the potential use of indigenous gas from the Block 11B/12B discoveries as a potential domestic supply option, as identified in Integrated Resource Plan 2023 ("IRP 2023")."

On March 6, 2023, the President of South Africa created a new role, appointing Dr. Kgosientsho Ramokgopa as Minister of Electricity in an effort to deal with the electricity crisis in South Africa. On October 26, 2023, the National Assembly issued a draft of the Upstream Petroleum Resources Development Bill highlighting the importance of national energy security and the role of gas in the energy transition in its objectives. As part of South Africa's commitment to the Paris Climate Agreement, it must diversify energy mix, reducing its reliance on ageing coal fired power plants. In an effort to fulfill this commitment, the Department of Mineral Resources and Energy announced the IRP 2023 in January 2024 designed to balance demand and supply of energy until 2050 as the country transitions its energy mix accordingly and provides the country with reliable base load generation capacity while ensuring compliance with emission reduction plans. IRP 2023 is a two phased approach to dealing with the electricity crisis, with phase one focusing on power system requirements up to 2030 and phase two focusing on long-term energy mix pathways to guide long-term policy choices. Phase two of IRP 2023 identifies the need to role out dispatchable power including gas to provide security of power supply to South Africa and references more than 7 gigawatts of new gas-to-power requirements. The Company believes the program for phase two with associated transmission network upgrades needs to begin earlier if energy supply security is the objective of the IRP 2023. The use of indigenous gas, including the discovered resources from Block 11B/12B, as part of the solution to South Africa's energy crisis will have positive implications for the South African economy. In addition to IRP 2023, the government of South Africa has committed to the unbundling of the government-owned electricity supplier into separate entities; Transmission, Generation and Distribution, creating an entity focused on expansion of the electricity grid, which is critical to allow future tie–in of potential gas–to-power projects.

Recommended Stories