Release Date: February 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Could you provide a breakdown of the 2025 production guidance across various assets? Also, how do you view the current M&A market, and what does the $3 per barrel non-recurrent OpEx correspond to? A: The production guidance is roughly split as 50% from Dussafu, 35% from Equatorial Guinea, and 15% from Tunisia. We are always evaluating M&A opportunities but maintain strong financial discipline. The non-recurrent OpEx mainly involves facilities maintenance and life extension projects, primarily in Equatorial Guinea.
Q: Can you explain the discrepancy between the 6% uplift in the lifting schedule and the 20% uplift in production guidance? What factors influence the production guidance range? A: The discrepancy arises from the timing of liftings versus production. The production guidance range accounts for planned and unplanned maintenance, with the lower end assuming more downtime. The midpoint of the range is a realistic target, reflecting operator budgets and maintenance schedules.
Q: What is the strategic rationale for the bond issue, and how does it compare to the increased interest payments? A: The bond issue provides a more corporate-style facility, offering flexibility beyond the reserve-based loan. It allows for expanded exploration activities and shareholder distributions. The bond was issued at a lower interest rate than the previous loan, providing financial benefits and signaling strong market confidence.
Q: Could you discuss the capital expenditure ranking and allocation process, and how do you balance growth versus maintenance expenditure? A: We prioritize maintenance CapEx to ensure long-term asset integrity, while also evaluating high-return growth opportunities. Our CapEx decisions aim for returns well above our cost of capital, typically exceeding 20-25% IRR. We are transitioning from a capital-intensive phase to a lighter period with a focus on strategic growth.
Q: What needs to happen to unlock the full potential of the Tunisian asset base, which has been constrained recently? A: The Tunisian asset is valuable but has faced delays due to political and regulatory challenges. Stability in the country and recognition of the oil and gas sector's importance are needed. We are seeing signs of progress, such as pending license extensions, which should enable further development.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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