Meren Energy executives used the company’s fourth-quarter 2025 results call to outline a year they characterized as transformational, driven by the closing of the Prime consolidation deal, meaningful debt reduction, and continued focus on organic growth opportunities across Nigeria, the Orange Basin, and Equatorial Guinea.
Leadership transition and “transformational” Prime consolidation
Chief Executive Officer Oliver Quinn, speaking in his first results presentation as CEO, opened by thanking former CEO Roger Tucker for his leadership. Quinn said the Prime consolidation transaction, closed in March 2025, “doubled” Meren’s reserves and production from its offshore Nigeria assets and simplified the ownership structure of its core portfolio. He said the company successfully integrated Prime and created a “lean and fit-for-purpose organization” to manage production assets and advance growth options.
Production performance, maintenance impacts, and 2026 drilling plans
For 2025, Meren reported working interest production of 30.8 thousand barrels of oil equivalent per day (Mboe/d) and entitlement production of 35.1 Mboe/d, both described as in line with full-year guidance. Quinn said production averaged around 32 Mboe/d on a working interest basis during the first nine months of the year, supported by the Akpo and Egina infield drilling campaign.
Fourth-quarter production was lower, primarily due to a planned maintenance shutdown at the Agbami field. Quinn also cited minor facility issues, including temporary shutdowns related to power supply during the second part of the quarter, which he said were addressed through operational interventions.
The Akpo and Egina drilling program was paused in the third quarter to incorporate early results from a recently acquired 4D seismic dataset intended to optimize drilling locations. Quinn said the earlier finish to the 2025 drilling campaign contributed to full-year capital spending coming in at the lower end of guidance.
Looking ahead, management said drilling campaigns are expected to resume later in 2026 across Akpo, Egina, and Agbami, with timing dependent on rig arrivals. In Q&A, Quinn said the company was “very confident” rigs would be secured and that both joint ventures were advanced in the recontracting process.
Financial results, liftings, and non-cash impairment at Agbami
Chief Financial Officer Aldo Perracini said Meren completed three oil liftings in the fourth quarter totaling about 3 million barrels at a realized all-in sales price of $64.4 per barrel. For full-year 2025, the company completed 12 liftings totaling about 12 million barrels at an average all-in sales price of $72.2 per barrel, which Perracini said compared favorably to dated Brent at $69.1 per barrel.
Perracini said Meren used a mix of hedging instruments—including physical and financial hedges such as swaps, collars, and puts—to protect downside while retaining partial upside exposure.
He also emphasized an impairment charge recorded in the quarter: $105.3 million related to the Agbami cash-generating unit. Perracini said the impairment was non-cash and had no impact on cash flows, attributing it to oil price volatility in 2025 and updated cost forecasts for the Agbami field. The cost updates, he said, relate mainly to planned long-term FPSO life extension activities intended to support safe and reliable operations through the end of the license and to provide flexibility for future drilling and tieback opportunities.
For 2025, Perracini said Meren delivered EBITDAX of $441 million, which he said was slightly below guidance, primarily due to a larger overlift adjustment than expected and “smaller variations” in Nigerian royalties and levies. Cash flow from operations before working capital was $262 million, with reported capital expenditures of $100 million. He reported free cash flow before debt service and shareholder distributions of $289 million.
On liquidity, Perracini said the company ended 2025 with $175 million in cash, compared to an opening balance of $461 million on a constructed basis assuming the Prime amalgamation closed on Jan. 1, 2025. He said operating cash flow for the year included a positive working capital movement of $86 million, driven primarily by the timing of cargo liftings and receipts of oil sale receivables.
Meren announced a first-quarter 2026 dividend of $25 million, to be paid the following month.
Balance sheet, refinancing plans, and 2026 hedging details
At year-end 2025, Perracini said Meren had $330 million drawn under its RBL, a net debt position of $155 million, and net debt to EBITDAX of 0.4x—below the company’s target of 1.0x. He noted the company canceled an undrawn $65 million corporate facility following the Prime amalgamation to eliminate standby fees.
As a post-fourth quarter update, Perracini said the company drew an additional $40 million under the RBL due to working capital timing related to liftings and short-term liquidity positioning. He said the company was in the process of refinancing the RBL facility to reduce borrowing costs and improve the debt amortization profile, with an expectation to finalize the refinancing in the first half of 2026.
On hedging, Perracini reiterated a policy of hedging 70% to 100% of post-tax net entitlement production on a rolling 12-month basis. He said Meren had approximately 3.5 million barrels hedged for 2026 sales at the end of 2025, including 2.3 million barrels in the first half of 2026 primarily through physical forward sales with an average floor price around $62 per barrel, and 1.3 million barrels in the second half of the year using a mix of swaps and collar structures.
Growth catalysts: Nigeria tiebacks, Orange Basin, and Equatorial Guinea farm-down
Quinn detailed multiple organic growth opportunities, particularly around Meren’s Nigerian FPSO hubs. He said the company planned to recommend drilling the Akpo Far East exploration well in late 2026, describing it as a near-field prospect about 5 kilometers from existing facilities with around 23 million barrels of unrisked mean recoverable resource net to Meren. In a success case, he said first oil could be achieved through the Akpo FPSO in less than two years. Quinn later described Akpo Far East’s key geological risk as trap, saying the reservoir characteristics are comparable to Akpo’s and that commerciality would benefit from proximity to infrastructure.
Quinn also cited progress on undeveloped discoveries Preowei, Egina South, and Ikija, located within 20–30 kilometers of existing hubs, totaling around 42 million barrels of resource net to Meren. At Agbami, he said drilling would recommence in late 2026 with a campaign that includes appraisal of the adjacent Ikija discovery and six infill wells in the field. During Q&A, management discussed additional detail on drilling cadence, including a 16-well plan at Agbami through 2027 and expectations for infill drilling at Akpo and Egina into 2027.
In the Orange Basin, Quinn said the Venus development offshore Namibia remained on track for a final investment decision targeted for mid-2026, citing operator TotalEnergies. He said FEED is progressing and described a development concept with 40 subsea wells tied back to an FPSO with 160,000 barrels per day peak capacity and a production life of 20-plus years. He added that Meren retains exposure to further exploration prospects on the license with no upfront cost because spending is carried through to first commercial production.
In South Africa’s Block 3B/4B, Quinn said the legislative notification and appeals process remained suspended pending a Supreme Court of Appeals judgment for other blocks, though the identified lead prospect Naila is “drill ready” and the operator is prepared to drill once the process concludes. He said Meren’s cost exposure is limited due to a capped exploration carry and that the company holds an 18% carried interest.
In Equatorial Guinea, Quinn said Meren holds two operated licenses and is running a farm-down process for both. He highlighted the EG-31 license, including the Gardenia gas discovery, which he described as approximately 200 BCF gross resource and potentially developable using nearby LNG infrastructure. He also cited nearby prospects Massif and Whistler with around five TCF of unrisked gross prospective resource. For EG-18, he said the company identified basin-floor fan targets with multi-billion barrel potential. Meren secured two-year license extensions for both blocks, which Quinn said provides flexibility to progress partner discussions and could allow drilling in the next couple of years with the right partners.
Executives repeatedly emphasized a disciplined capital allocation framework, including maintaining minimum liquidity of $150 million and targeting net debt to EBITDAX of 1.0x or less. Quinn said Meren continues to screen potential inorganic opportunities but would not pursue scale “for the sake of scale” and would prioritize transactions that are accretive and consistent with its balance sheet approach.
In a Q&A exchange, Quinn referenced the company’s prior identity as Africa Oil (TSE:AOI), saying the business has already grown materially in recent years through the Prime transaction and that management remains focused on a disciplined pathway to additional scale.
About Africa Oil (TSE:AOI)
Africa Oil Corp is an international oil and gas exploration company. It is an exploration stage enterprise that participates in oil and gas projects located in emerging markets, in sub-Saharan Africa. The company operates in the business segment of international oil and gas exploration, and geographically, it operates in Kenya and Ethiopia.
