VANCOUVER, BC, Aug. 13, 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 and six months ended June 30, 2024. View PDF version FINANCIAL AND OPERATIONAL UPDATE The Company's financial results for the six months ended June 30, 2024 have been negatively impacted by a US$70.2 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. At the end of June 2024, CNR International (South Africa) Limited ("CNR") provided notice to the joint venture partners that it will withdraw from its 20% interest in accordance with the joint operating agreement in respect of Block 11B/12B, Offshore the Republic of South Africa ("JOA"). The Company was also advised that TotalEnergies EP South Africa B.V. ("TotalEnergies") was contemplating withdrawing from its 45% interest and contemplating resigning as operator in accordance with the JOA. At the end of July 2024, TotalEnergies provided a notification that it was resigning as operator of Block 11B/12B. In addition, TotalEnergies and QatarEnergy International E&P LLC provided notice to the joint venture partners that they were withdrawing from their 45% and 25%, respectively, in accordance with the JOA. Under the JOA, the withdrawing parties assign their interest free of charge to each of the non-withdrawing partners in proportion to the interest of non-withdrawing partners. The withdrawal of the joint venture partners from Block 11B/12B is subject to all relevant regulatory approvals by South African authorities. OUTLOOK The Company, through its investment in Main Street 1549 Pty. Ltd. ("Main Street 1549"), which currently holds 10% interest in Block 11B/12B, does not intend to withdraw from the block. Subject to all relevant regulatory approvals by South African authorities in respect to the withdrawal of the joint venture partners in Block 11B/12B, Main Street 1549 expects to hold 100% interest in Block 11B/12B. Despite the challenges and delays encountered so far, the Company remains confident that the Block 11B/12B resources can be commercially developed. The Brulpadda and Luiperd discoveries are the largest discoveries of natural gas resources in South Africa and if developed could supply a significant portion of the country's energy needs as it seeks to transition away from coal fired power plants. The Company will be focused on obtaining the Block 11B/12B Production Right approval and securing offtake customers. HIGHLIGHTS The Company incurred a US$47.2 million non-cash loss on revaluation of its financial asset during the second 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. At June 30, 2024, the Company had US$2.1 million in cash. 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 prepared a draft Environmental and Social Impact Assessment ("ESIA"). At the request of the operator, TotalEnergies, the final ESIA deadline has been extended and is due August 30, 2024. In light of the withdrawal of the joint venture partners, the Company is currently assessing the best way forward on the ESIA. The approval of the Production Right application will not occur until after the Block 11B/12B joint venture receives environmental authorization in respect to the ESIA. FINANCIAL INFORMATION (Unaudited; thousands of US dollars, except per share amounts) Three Three Six Six Months Months Months Months Ended Ended Ended Ended June 30,