Meren Energy (MER) Q4 2024 earnings summary

Executive summary

• Completed key strategic transactions, including the imminent Prime consolidation, Venus appraisal, and increased Impact stake to 39.5%, positioning for growth and de-risking the balance sheet.

• Returned $68 million to shareholders via dividends and buybacks, the highest annual return since 2022, with plans to increase the annual base dividend to at least $100 million post-reorganization.

• Enhanced influence in the Namibian Orange Basin through increased Impact shareholding at a cost of $88.6 million.

• Nearing completion of the Prime deal, expected to double reserves and production, and provide direct control over Prime's cash flows.

Financial highlights

• Net loss attributable to shareholders was $279.1 million in 2024, mainly due to a $436.7 million non-cash impairment on Prime.

• Prime achieved an average realized oil price of $84.6/bbl in 2024, above Brent average.

• Prime's EBITDA (50% share) was $242 million in Q4 2024, including a $164 million gain from Agbami securitization.

• Cash flow from operations before working capital and interest was $268 million, within guidance.

• Combined cash balance with Prime at year-end was $461 million.

Outlook and guidance

• Prime consolidation expected to close around March 7, 2025, enabling increased dividends and direct control of Prime's financials.

• Annual base dividend set at $100 million, with 50% of excess free cash flow to be distributed via special dividends or buybacks.

• 2025 drilling campaign focuses on infill wells and near-field exploration in Nigeria, with high-impact exploration at Akpo Far East.

• Venus project in Namibia targets FID by mid-2026, with first oil as the country's inaugural production; first exploration well in South Africa's 3B/4B block expected in 2026.

• Consolidated 2025 guidance to be provided post-Prime deal completion.