07:53 AM EDT, 06/24/2024 (MT Newswires) -- Africa Oil ( AOIFF ) said Monday that it agreed with BTG Pactual Oil & Gas to consolidate into a new subsidiary their 50-50 shareholdings in Prime Oil & Gas Cooperatief UA.

The consolidation will provide Africa Oil ( AOIFF ) shareholders with significant free cash flows, and allow Africa Oil ( AOIFF ) to commit to an enhanced total shareholder returns model, the company said.

Under the agreement, BTG Oil & Gas and BTG Pactual Holding (BTG Holding) will be amalgamated under Canadian corporate law with a newly created subsidiary of Africa Oil ( AOIFF ), with BTG Oil & Gas receiving newly issued common shares in Africa Oil ( AOIFF ) as part of the amalgamation. On closing of the proposed reorganization, BTG Oil & Gas is expected to hold about 35% of the outstanding share capital of the enlarged Africa Oil ( AOIFF ).

The accretion in free cash flow per share for Africa Oil ( AOIFF ) shareholders in the 2025 to 2029 period is expected to be more than 100%, the company said.

The boards of Africa Oil ( AOIFF ) and BTG Oil & Gas have approved the proposed reorganization, which is expected to close in the third quarter of 2025 at the latest.

Separately, Africa Oil ( AOIFF ) said it bought back about 1.1 million common shares from June 17 to June 21 under the previously announced share buyback program.