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Africa Energy Corp. (TSXV: AFE,OTC:HPMCF) (Nasdaq First North: AEC) ("Africa Energy" or the "Company"), an oil and gas exploration company, announces financial and operating results for the three months ended March 31, 2026. View PDF version
Robert Nicolella, Africa Energy's CEO, commented, "We took the prudent step of pausing the Environmental Social Impact Assessment ("ESIA") for Block 11B/12B[1], offshore South Africa, following the previous decision by the Western Cape High Court to set aside an environmental authorization for offshore exploration operations in Block 5/6/7 (held by an unrelated party). This allowed the Company to fully assess the implications of the new legal and regulatory landscape and ensure the Environmental Authorization application and development plans were optimally aligned. Concurrently, our technical team continues to advance technical work on various development scenarios."
HIGHLIGHTS
- At March 31, 2026, the Company had US$2.7 million in cash, US$2.4 million of working capital and no debt compared to US$3.2 million in cash, US$3.0 million of working capital and no debt at the end of 2025.
- Through its investment in Main Street 1549 Pty Ltd. ("Main Street 1549"), which holds an interest in Block 11B/12B, offshore the Republic of South Africa, the Company has obtained a further extension for the submission of the Environmental and Social Impact Assessment ("ESIA") to November 4, 2026.
OUTLOOK
On March 5, 2026, the Honorable Minister of Mineral and Petroleum Resources, Mr. Gwede Mantashe, highlighted the role natural gas must play in closing the energy deficit in South Africa and that natural gas will be the most effective transition fuel. Further Mr. Gwede Mantashe identified Africa Energy Corp.'s discovered resources in Block 11B/12B, offshore South Africa, as resources whereby the government of South Africa is seeking to accelerate development to ensure security of supply. This statement along with the recent decision by the DFFE to proceed with determination of appeals lodged against environmental authorizations granted for offshore oil and gas projects demonstrates the South African government's commitment to attract investment to the industry and advance the development of its domestic resources to ensure energy security and stability, which has been emphasized by recent conflict in the middle east.
The Company is focused on obtaining environmental authorization for development of discovered resources in Block 11B/12B so that it can obtain the Production Right approval. Early engagements with relevant stakeholders on gas supply has commenced in an effort to secure offtake customers for future development.
Subject to all relevant regulatory approvals by South African authorities with respect to the withdrawal of the joint venture partners in Block 11B/12B and completion of the restructuring of Main Street 1549, the Company expects to hold 75% direct 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 required to achieve both sustainable economic growth and the transition to lower carbon energy sources.
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1 Main Street 1549 currently holds a 10% participating interest in Block 11B/12B, offshore South Africa. The Company currently owns 49% of the common shares and 100% of the Class B shares of Main Street 1549. |
FINANCIAL INFORMATION
(Unaudited; thousands, except per share amounts, US dollars)
Three Months | Three Months | |
Ended | Ended | |
March 31, | March 31, | |
2026 | 2025 | |
Operating expenses | 539 | 675 |
Net loss | (522) | (958) |
Net loss per share (basic and diluted) | (0.00) | (0.00) |
Weighted average number of shares outstanding (basic and diluted) | 479,162 | 283,758 |
Number of shares outstanding | 479,162 | 283,758 |
Cash flows provided by (used in) operations | (456) | (199) |
Cash flows provided by (used in) investing | 35 | (359) |
Cash flows provided by (used in) financing | - | 2,858 |
Total change in cash and cash equivalents | (430) | 2,382 |
Change in share capital | - | 17,671 |
Change in contributed surplus | (20) | (3,956) |
Change in deficit | 522 | 958 |
Total change in equity | (542) | 12,757 |
March 31, | December 31, | |
2026 | 2025 | |
Cash and cash equivalents | 2,730 | 3,160 |
Total assets | 40,629 | 41,134 |
Total liabilities | 353 | 316 |
Total equity attributable to common shareholders | 40,276 | 40,818 |
Net working capital | 2,447 | 2,954 |
The financial information in this table was selected from the Company's unaudited condensed interim consolidated financial statements for the three months ended March 31, 2026 (the "Financial Statements"), which are available on SEDAR at www.sedar.com and the Company's website at www.africaenergycorp.com.
EARNINGS TREND AND FINANCIAL POSITION
(Unaudited; US dollars)
Operating expenses decreased by $0.1 million for the three months ended March 31, 2026, compared to the same period in 2025. Decreases in stock-based compensation expense and professional fees were partially offset by an increase in salaries and benefits. The Company recorded a recovery of stock-based compensation in the first quarter of 2026 due mainly to a reversal of prior period expense for unvested options forfeited during the quarter. Professional fees were higher in the first quarter of 2025 due to legal fees associated with the definitive agreements signed on May 28, 2025 related to the restructuring of Main Street 1549. Salaries and benefit expenses were higher in the first quarter of 2026 compared to the same period in 2025 due to an increase in full-time equivalent employees.
At March 31, 2026, the Company had cash of $2.7 million and working capital of $2.4 million compared to cash of $3.2 million and working capital of $3.0 million at December 31, 2025. The decrease in cash and working capital since December 31, 2025, can be mainly attributed to cash-based operational expenditures.
NEXT EARNINGS REPORT RELEASE
The Company plans to report its results for the six months ended June 30, 2026 on August 13, 2026.
About Africa Energy Corp.
Africa Energy Corp. is a Canadian oil and gas exploration company focused on South Africa. The Company is listed in Toronto on TSX Venture Exchange (ticker "AFE") and in Stockholm on Nasdaq First North Growth Market (ticker "AEC").
Important information
This is information that Africa Energy is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication through the agency of the contact persons set out above on May 14, 2026, at 5:30 p.m. ET.
The Company's certified advisor on Nasdaq First North Growth Market is Bergs Securities AB, +46 739 4962 50, rutger.ahlerup@bergssecurities.se.
Forward looking statements
Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or the Company's future performance, business prospects and opportunities, which are based on assumptions of management.
The use of any of the words "will", "expected", "planned" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Company's current belief or assumptions as to the outcome and timing of certain future events. These forward-looking statements involve risks and uncertainties relating to, among other things, changes in oil prices, results of exploration and development activities, including results, timing and costs of seismic, drilling and development related activity in the Company's area of operations and, uninsured risks, regulatory changes, defects in title, availability of funds required to participate in the exploration activities, or of financing on reasonable terms, availability of materials and equipment on satisfactory terms, outcome of commercial negotiations with government and other regulatory authorities, timeliness of government or other regulatory approvals, actual performance of facilities, availability of third party service providers, equipment and processes relative to specifications and expectations and unanticipated environmental impacts on operations. Actual future results may differ materially. Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to the Company. The forward-looking information contained in this release is made as of the date hereof and the Company is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Africa Energy Corp.
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