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Africa Energy (TSE:AFE)
:AFE
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Africa Energy (AFE) AI Stock Analysis

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Africa Energy

(AFE)

Rating:35Underperform
Price Target:
Africa Energy's overall stock score is primarily impacted by severe financial challenges, including persistent losses and liquidity issues. While technical indicators show some positive momentum, and recent corporate events are a positive note, the poor valuation reflects ongoing unprofitability. Strategic changes are essential to address these financial weaknesses and improve future prospects.

Africa Energy (AFE) vs. iShares MSCI Canada ETF (EWC)

Africa Energy Business Overview & Revenue Model

Company DescriptionAfrica Energy Corp (AFE) is an oil and gas company focused on the exploration and development of energy resources on the African continent. The company is primarily engaged in the acquisition and development of upstream oil and gas assets, targeting high-impact exploration opportunities. Africa Energy operates primarily in proven hydrocarbon basins, with a strategic focus on leveraging partnerships to enhance its exploration and development capabilities.
How the Company Makes MoneyAfrica Energy makes money through its exploration and development activities in the oil and gas sector. The company generates revenue primarily by participating in exploration projects that lead to the discovery of commercially viable hydrocarbon reserves. Once these reserves are developed, Africa Energy can earn income through production sales, either through direct sales of crude oil and natural gas or by entering into production sharing agreements with host governments. Key revenue streams include the sale of equity stakes in its exploration assets, farm-out agreements, and potential future production revenues. The company's earnings are significantly influenced by its ability to successfully discover and develop oil and gas reserves, as well as its strategic partnerships with other energy companies and stakeholders in the regions where it operates.

Africa Energy Financial Statement Overview

Summary
Africa Energy's financial performance is hindered by continuous losses, negative cash flows, and declining assets. Despite manageable leverage, the company's absence of revenue and liquidity issues pose significant challenges to financial stability.
Income Statement
10
Very Negative
Income Statement analysis reveals persistent losses with no revenue generation in recent years, leading to negative profit margins. The TTM (Trailing-Twelve-Months) data shows worsening performance with a significant net loss, indicating challenges in achieving profitability.
Balance Sheet
30
Negative
Balance Sheet analysis highlights a moderate debt-to-equity ratio, suggesting manageable leverage. However, a decreasing equity base and declining total assets over time raise concerns about financial stability. Equity ratio remains adequate but declining assets need attention.
Cash Flow
20
Very Negative
Cash Flow analysis shows negative operating and free cash flows, indicating cash outflows are exceeding inflows. This trend is concerning, as it suggests ongoing liquidity issues. Despite positive financing cash flow, reliance on external funding is not sustainable long-term.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue0.000.000.000.000.00
Gross Profit0.000.00-14.00K-32.00K-32.00K
EBITDA-1.85M-4.63M-6.04M-5.46M-4.24M
Net Income-100.61M-119.78M-35.48M48.65M-4.12M
Balance Sheet
Total Assets42.58M138.83M257.42M267.24M244.03M
Cash, Cash Equivalents and Short-Term Investments2.31M1.71M6.79M10.85M19.64M
Total Debt10.36M6.83M5.00M2.00K19.00K
Total Liabilities10.65M6.99M8.39M1.68M1.80M
Stockholders Equity31.92M131.85M249.03M265.56M242.24M
Cash Flow
Free Cash Flow-1.11M-2.13M-11.26M-4.24M-3.50M
Operating Cash Flow-1.11M-2.13M-3.02M-4.04M-3.35M
Investing Cash Flow-582.00K-3.95M-7.22M-5.00M-32.00M
Financing Cash Flow2.30M1.00M6.22M287.00K52.59M

Africa Energy Technical Analysis

Technical Analysis Sentiment
Negative
Last Price0.12
Price Trends
50DMA
0.17
Negative
100DMA
0.18
Negative
200DMA
0.16
Negative
Market Momentum
MACD
>-0.01
Negative
RSI
46.75
Neutral
STOCH
38.10
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:AFE, the sentiment is Negative. The current price of 0.12 is below the 20-day moving average (MA) of 0.14, below the 50-day MA of 0.17, and below the 200-day MA of 0.16, indicating a bearish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 46.75 is Neutral, neither overbought nor oversold. The STOCH value of 38.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:AFE.

Africa Energy Peers Comparison

Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
52
Neutral
C$2.95B-1.04-3.46%5.86%3.01%-47.13%
TSPPR
44
Neutral
$49.06M57.68%-42.06%66.59%
TSEOG
41
Neutral
C$53.59M-58.84%-549.19%
TSTAO
39
Underperform
C$22.65M-16.72%
TSOYL
39
Underperform
C$45.70M-4.08%18.11%
TSWIL
37
Underperform
C$42.28M-683.57%-15.33%-31.45%
TSAFE
35
Underperform
C$67.08M-100.64%15.89%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:AFE
Africa Energy
0.12
-0.20
-62.50%
TSE:PPR
Prairie Provident Resources
0.03
>-0.01
-21.05%
TSE:EOG
Eco Atlantic Oil & Gas
0.17
-0.04
-21.43%
TSE:WIL
Wilton Resources
0.55
-0.21
-27.63%
TSE:TAO
TAG Oil
0.10
-0.20
-66.67%
TSE:OYL
CGX Energy
0.14
-0.10
-41.67%

Africa Energy Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Africa Energy Corp. Strengthens Leadership with New Appointment
Positive
Apr 29, 2025

Africa Energy Corp. has announced the appointment of Dr. Phindile Masangane as Head of Strategy and Business Development, who will also join the Board of Directors. Dr. Masangane’s extensive experience in the energy sector, including her previous role as CEO of The Petroleum Agency of South Africa, is expected to significantly contribute to the company’s strategic direction, particularly in advancing the development of Block 11B/12B and bringing its gas and condensate discoveries to market. Additionally, the Board has approved the grant of 10 million incentive stock options to further align interests with stakeholders.

Spark’s Take on TSE:AFE Stock

According to Spark, TipRanks’ AI Analyst, TSE:AFE is a Underperform.

Africa Energy’s overall stock score is hindered by severe financial challenges, including persistent losses and liquidity issues. While technical analysis shows some momentum, the valuation remains poor with negative earnings. Recent corporate events have provided a temporary financial boost, but long-term strategies are needed to ensure stability.

To see Spark’s full report on TSE:AFE stock, click here.

Delistings and Listing ChangesPrivate Placements and Financing
Africa Energy Completes Private Placement and Debt Settlement
Positive
Mar 31, 2025

Africa Energy Corp. has successfully closed a non-brokered private placement and shares for debt transaction, raising significant funds to settle existing debts and support its operations. The transaction has resulted in Deepkloof Limited becoming a control person of the company, and a share consolidation is planned to align with TSX Venture Exchange policies, impacting the company’s share structure and market positioning.

Business Operations and StrategyFinancial DisclosuresRegulatory Filings and Compliance
Africa Energy Faces Financial Setbacks but Sees Potential in South African Gas Discoveries
Neutral
Mar 27, 2025

Africa Energy Corp. reported a challenging financial year ending December 31, 2024, primarily due to a US$97.4 million non-cash loss from the revaluation of its investment in Block 11B/12B, following the withdrawal of key joint venture partners. Despite these setbacks, Africa Energy is restructuring its investment in Main Street 1549 to increase its direct interest in Block 11B/12B to 75%, subject to regulatory approval. The company remains optimistic about the commercial potential of the Brulpadda and Luiperd discoveries, which are among South Africa’s largest natural gas finds. The recent changes in joint venture dynamics and regulatory developments, including the Upstream Petroleum Resources Development Act, are expected to influence the company’s future operations and strategic positioning.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Apr 30, 2025