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.