VANCOUVER, BC, May 14, 2024 /CNW/ - Africa Energy Corp. (TSXV:AFE) (Nasdaq First North: AEC) ("Africa Energy" or the "Company"), an oil and gas exploration company, announces corporate update and financial and operating results for the three months ended March 31, 2024. View PDF FINANCIAL AND OPERATIONAL UPDATE The Company's financial results for the three months ended March 31, 2024, have been negatively impacted by a US$23.1 million non-cash loss on revaluation of our investment in Block 11B/12B, which was due to changes in base assumptions for discount rates applied in the discounted cash flow model for valuing our interest in Block 11B/12B. On April 25, 2024, the National Council of Provinces approved the Upstream Petroleum Resources Development Bill ("UPRDB"), which will now be tabled for presidential assent. Once presidential assent of the UPRDB is obtained, the industry will have more certainty and clarity, which is expected to drive investment in South Africa. As part of South Africa's commitment to the Paris Climate Agreement, it must diversify energy mix, reducing its reliance on ageing coal fired power plants. In an effort to fulfill this commitment, the Department of Mineral Resources and Energy announced the draft Gas Master Plan ("GMP") in April 2024 and the Integrated Resource Plan 2023 ("IRP 2023") in January 2024, both designed to balance demand and supply of energy, including the use of natural gas, until 2050 as the country transitions its energy mix accordingly and provides the country with reliable base load generation capacity while ensuring compliance with emission reduction plans. IRP 2023 is a two phased approach to dealing with the electricity crisis, with phase one focusing on power system requirements up to 2030 and phase two focusing on long-term energy mix pathways to guide long-term policy choices. Phase two of IRP 2023 identifies the need to roll out dispatchable power including gas to provide security of power supply to South Africa and references more than 7 gigawatts of new gas-to-power requirements. The Company believes the program for phase two with associated transmission network upgrades needs to begin earlier if energy supply security is the objective of the IRP 2023. The use of indigenous gas, potentially including the discovered resources from Block 11B/12B as identified in IRP 2023 and the draft GMP, will be part of the solution to South Africa's energy crisis and will have positive implications for the South African economy. In addition, the government of South Africa has committed to the unbundling of the government-owned electricity supplier into separate entities; Transmission, Generation and Distribution, creating an entity focused on expansion of the electricity grid, which is critical to allow future tie‐in of potential gas‐to-power projects. OUTLOOK The Block 11B/12B joint venture has applied for the Production Right and is contemplating an early production system ("EPS") for a phased development of the Paddavissie Fairway. The EPS would provide first gas and condensate production from the Luiperd discovery and would accelerate the Block 11B/12B development timeline by utilizing nearby infrastructure on the adjacent block in order to supply natural gas to customers in Mossel Bay for the conversion of natural gas to power and/or liquid petroleum products. The EPS would significantly decrease the capital expenditures required to reach first production on Block 11B/12B. The Company expects that a full development of the Paddavissie Fairway would follow the EPS as the gas market expands in South Africa. We are encouraged by the 2D and 3D seismic data that has identified additional prospectivity in the Paddavissie Fairway and to the east, confirming the large exploration upside remaining across the block. HIGHLIGHTS The Company incurred a US$23.1 million non-cash loss on revaluation of its financial asset during the first quarter of 2024. The non-cash loss on revaluation of the financial asset relates to the Company's investment in Block 11B/12B and was due to changes in base assumptions for discount rate. The joint venture partnership submitted an application for a Production Right on September 7, 2022. As part of the Production Right application process, the Block 11B/12B joint venture also submitted a draft Environmental and Social Impact Assessment ("ESIA"). At the request of the Operator, the final ESIA deadline has been extended and is due August 30, 2024. The approval of the Production Right application will not occur until after the final ESIA has been submitted by the Block 11B/12B joint venture. At March 31, 2024, the Company had US$1.6 million in cash. FINANCIAL INFORMATION