Global Cross-Asset Energy Analyst, VAC Investments

Aaditya Chintalapati, CFA

Global Cross-Asset Energy Analyst

Thematic (Sector/Industry)

Colombia Energy / Thematic (Sector/Industry)

<p>South Africa has limited historical oil and gas production, with current production of c.25 Kboe/day largely gas-focused for the Mossel Bay GTL plant. However, we have seen renewed industry interest in offshore South African exploration licenses recently, following significant oil discoveries around the Falkland Islands. With farm-ins by <a href="https://www.smartkarma.com/entities/812" target="_blank" data-smartkarma-citation="entities:812:1">Total Sa (FP FP)</a> , <a href="https://www.smartkarma.com/entities/21030" target="_blank" data-smartkarma-citation="entities:21030:1">Statoil ASA (STL NO)</a> and Qatar Petroleum in late-2017/early-2018, coupled with robust oil price expectations for the medium-term, we believe the region is well placed for near-term frontier exploration and significant resource upside potential. Following its recent USD 45m private placement, we highlight Africa Energy Corp (AFE TSX) as a well-funded top pick to play this theme.</p>

South Africa has limited historical oil and gas production, with current production of c.25 Kboe/day largely gas-focused for the Mossel Bay GTL plant. However, we have seen renewed industry interest in offshore South African exploration licenses recently, following significant oil discoveries around the Falkland Islands. With farm-ins by Total Sa (FP FP) , Statoil ASA (STL NO) and Qatar Petroleum in late-2017/early-2018, coupled with robust oil price expectations for the medium-term, we believe the region is well placed for near-term frontier exploration and significant resource upside potential. Following its recent USD 45m private placement, we highlight Africa Energy Corp (AFE TSX) as a well-funded top pick to play this theme.

Global E&Ps: South Africa in Focus