Africa Oil Corp.

Q2 EBITDAX was $108 million, bringing first-half EBITDAX to $220 million. Cash flow from operations before working capital was $60 million in Q2 and $139 million in the first half, while free cash flow was $53 million in Q2 and $18 million in the first half. The company lifted 2 cargoes in Q2 at an average all-in sales price of $92.8/bbl versus dated Brent of $103.8/bbl; the first cargo realized $63.6/bbl under the legacy trigger mechanism and the second realized $121.9/bbl. Production for the first half was around 28,000 boe/d in the core business, and entitlement production was around 30,000 boe/d in the quarter. Full-year 2026 guidance was raised: working interest production is now 24,000-27,000 boe/d, entitlement production 28,500-32,500 boe/d, EBITDAX $390 million-$430 million, and cash flow from operations $235 million-$260 million, based on an assumed Brent price of around $85/bbl for the year. Capex guidance was adjusted down due to deferral of some drilling into 2027, though Q4 2026 activity will increase. At quarter end, net debt was $212 million, net debt to EBITDAX was 0.5x, cash was $78 million, total liquidity was $319 million, and outstanding debt was $290 million.

Oliver Quinn framed the quarter as evidence that Meren’s strategy is working: low-cost, high-quality production, disciplined capital allocation, and a balance between growth investment and shareholder returns. He emphasized a significant return to activity in Q4 across Nigerian fields, including an intervention vessel and two rigs for drilling at Agbami, Akpo, and Egina. His tone was confident and constructive, especially on the optionality in Nigeria, the Venus project in Namibia, and the company’s ability to fund growth from a position of financial strength.

Aldo Perracini highlighted stronger realized pricing, cash generation, and balance sheet strength. He noted Q2 EBITDAX of $108 million, operating cash flow before working capital of $60 million, free cash flow of $53 million, and capex of $50 million in the quarter, mostly in Nigeria; he also said Meren repaid $80 million under the RBL, ending with $290 million of debt, $78 million of cash, $241 million of RBL headroom, and $319 million of total liquidity. He reiterated that the company hedges roughly 30% to 50% of gross production on a rolling 12-month basis and said the old trigger-price structure is gone in favor of financial derivatives.

Analysts focused on whether the late-2026 drilling program should lift 2027 production and reserves, and management said the campaign should help arrest natural decline and then support incremental production through 2027, with some wells maturing contingent resources toward 2P. On lifting cadence, Aldo said the company expects another 3 to 4 cargoes in the second half on top of July’s lifting, after starting Q2 with an underlifted position of roughly 600,000 barrels. They also said 2027 capex should be broadly similar to, or possibly lower than, 2026, while production costs should not be materially affected by drilling because the spending will mostly sit in capex rather than opex.