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
