Friday 25th of February 2022 10:23:21 AM

Venus-1 discovery holds "at least" 3b barrels, could drive ~100% upside for Africa Oil

Flare on an ocean oil rig. Dazman/E+ via Getty Images
  • Upstream is reporting that, according to an industry-leading consultant, Total's (NYSE:TTE) recent Venus-1 discovery in Namibia holds "at least" 3b barrels of recoverable oil.
  • Sources indicate it's the Company's largest discovery in 20yrs.
  • In the context of Total (TTE), the massive find is unlikely to move the needle for investors; however, Africa Oil (OTCPK:AOIFF) also holds an interest in the block, and could respond favorably to the news.
  • A pre-appraisal valuation of recoverable resource at $5/b would imply a value of $15b value for 100% of the find.
  • Africa Oil (OTCPK:AOIFF) indirectly owns ~6% of the find, implying ~$900m of value to the Company at $5 per recoverable barrel; Africa Oil's current market capitalization is C$1.25b, or ~US$980m.
  • The Company is slated to report earnings Monday, February 28th, an event that will allow Management to further outline potential upside from the discovery.
  • Analyst remain mixed on the name, but are likely to see the risk/reward more favorably following Thursday's announcement.


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