Africa Oil Corp. (“Africa Oil”) wishes to reiterate the oil price hedges arranged by its investee company, Prime Oil & Gas B.V. (“Prime”). These will significantly mitigate the impact of recent drop in global oil prices on the cash flows from operating activities net to Africa Oil’s 50% shareholding in Prime, that were recently announced as part of the Company’s 2020 Management Guidance..

Prime’s hedging program has resulted in 95% of its 2020 production to have been hedged at an average price of US$66.0 per barrel, and 28% of its 2021 production to have been hedged at an average price of US$.60.0 per barrel. The 2020 hedging program is comprised of physical forward sales and swaps of Prime’s oil cargoes to a group of buyers including major oil companies and commodity trading houses. These counter parties are part of groups with investment grade credit ratings.

As previously stated, Africa Oil’s 2020 Management Guidance includes estimates of average daily working interest (“W.I.”) production range of 30,000–33,000 barrels of oil equivalent per day (“boe/d”) and net entitlement production1 range of 35,000-38,000 boe/d net to AOI’s 50% shareholding in Prime, with more than 85% expected to be medium and light oil.

Based on the above production guidance, Africa Oil management expect Prime to generate cash flows from operating activities of approximately $630-$680 million, net to the Company’s 50% shareholding in Prime. Any dividends received by Africa Oil from Prime’s operating cash flows will be subject to Prime’s capital investment (2020 estimate of $55 million net to the 50% shareholding) and financing cashflows, including payments of Prime’s Reserve Based Lending (“RBL”) principal amortization and interest payments, estimated to be approximately $315 million and US$50 million respectively in 2020, net to Africa Oil’s 50% shareholding in Prime.