By Alex Langton | 22 January 2024
Afentra, the upstream oil and gas company, has recently been crowned the preferred bidder for not one but two coveted blocks in Angola's 2023 onshore bid round. It seems Afentra, already a familiar face on the AIM, is poised to broaden its horizons by acquiring production and development assets in Africa, and this latest escapade in Angola is a testament to their unyielding ambition.
During the highly competitive 2023 Public Tender orchestrated by ANPG, Afentra threw its hat into the ring for Blocks KON15 and KON19, nestled in the Kwanza onshore Basin. This isn't just any old basin, mind you. Covering a staggering 25,000 Sqkm, the Kwanza basin is an enigmatic gem β a proven hydrocarbon haven that's been unfairly neglected over the years. With a storied past dating back to 1955, it once boasted a production of over 15,000 barrels of oil per day in the 60s and 70s. However, the tumultuous times of the Angolan civil war shifted the focus offshore, leaving onshore treasures like Kwanza somewhat in the shadows.
Afentra, with an eye for potential, zeroed in on KON15 and KON19. These blocks aren't just any plots of land; they're teeming with indicators of a vibrant petroleum system. Previous drilling endeavours have unearthed light oil and oil shows from both post and pre-salt reservoirs, albeit with a rather scant supply of 2D Seismic data. Moreover, these blocks are cosily situated next to both legacy oil fields, currently under appraisal for re-development, and existing infrastructure that promises swift commercialisation β a cherry on top for any discerning investor cake.
As the non-operated preferred bidder, Afentra now finds itself in the enviable position of engaging with the respective Operators of these blocks β Sonangol P&P for Kon 15 and ACREP for Kon 19 β to hammer out the license terms with the relevant authorities. It's a dance of negotiation, with Afentra holding a significant 45% non-operating interest in each block, whilst the Operators, Sonangol and ACREP, hold 40% and 45%, respectively.
CEO Paul McDade couldn't hide his enthusiasm, stating that Afentra's unwavering commitment to the Angolan oil industry has borne fruit with this selection. He envisages a future where Afentra plays a pivotal role in unlocking Angola's resource potential for the country's benefit. These licenses aren't just another feather in Afentra's cap; they represent a strategic expansion into an attractive market, complementing their existing portfolio with low-cost onshore blocks brimming with untapped potential.
As the dust settles on this announcement, the industry watches with bated breath, eager to see how Afentra's latest African adventure unfolds. One thing is certain: Afentra's foray into the Kwanza basin could very well be a game-changer, not just for the company but for Angola's oil narrative as a whole. Stay tuned, ladies and gentlemen; this could get rather interesting.
However, as father often reminds me, O&G entities often promise a gusher, and all too oftwn prove to be as dry as a witches tit.
Self Congratulation (unbecoming)
Afentra shares from the modest 28.4p, coinciding with our insightful feature on the company's return to the trading floors, has been nothing short of a delightful surprise. The shares, now perched at 36.8p, have demonstrated a commendable resilience and a vivacious spirit, much like a determined climber ascending Ben Nevis against the odds. Yes, i managed it, just the once.
The climb from those more pedestrian levels to the current 36.8p has been a rather engaging spectacle, with the shares showing a bit of pluck (unlike father whom refused to tackle the hill, Ben Nevis) as they flirted with the recent peak at 39.33p. It's as though the market has taken a sip of tea, looked over the rim of the cup, and with a raised eyebrow acknowledged, "Well played."
One might express a tinge of surprise, though wrapped in a blanket of admiration, at the shares trading at these levels. (Someone forgot to buy them!) It's akin to watching an understated dark horse in the Grand National quietly overtaking the pack, leaving us all slightly agog but cheerfully applauding. Iβm imagining father rolling his eyes.
While the shares have retreated from their recent summit, this modest pullback could be the market catching its breath after a spirited run. After all, even the most enthusiastic of rallies must occasionally pause for afternoon tea.
In the fullness of time, we shall see whether this is merely a restful interlude in an ongoing symphony of growth or if the market is signalling a more conservative composition. Nonetheless, at this juncture, one must tip one's hat to Afentra for adding a bit of zest to the markets and a dash of spice to the portfolios of those who backed this horse.
So, what is the chart telling us? Remember, this is just for fun, at least for me, so do not take it too seriously.
Starting with the Pence daily candlesticks, we can observe a rollercoaster of a ride with the share price. The candlesticks over the period show a mix of bullish and bearish sentiment, with the share price experiencing volatility within a range. The most recent action seems a tad more bullish, with the price ending on an uptick, as indicated by the last candle's colour and position relative to the preceding ones.
Ichimoku Cloud (the green and red shaded areas): is a rather splendid tool for gauging momentum and finding potential support and resistance levels. The price is currently hovering just above the top boundary of the cloud, suggesting a potential resistance-turned-support level. If prices remain above the cloud, this could be a bullish signal, indicating that the bulls might have a bit of a knees-up.
20 RSI (Relative Strength Index): is trundling along on the scale just below the midpoint of 50. This indicates that while we're not in overbought territory (above 70) or oversold territory (below 30), the market isn't exactly picking a clear direction. It's more like a polite disagreement at a dinner party rather than an all-out brawl.
Accumulation/Distribution line: is trotting downwards, which can signify that the security is being distributed rather than accumulated. This divergence from the price action could be an early signal that the recent price increase might not have the backing of increased volume and could be less sustainable, like a chocolate teapot.
In summary, the chart gives us a narrative of a market in a state of flux for Afentra. Given the price's position relative to the Ichimoku Cloud and the recent uptick in price, there are signs of potential bullishness. However, the RSI and Accumulation/Distribution indicators suggest that investors might want to hold on to their bowler hats, as the direction isn't crystal clear and could turn on a sixpence.
Opinions
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