August 13, 2015 (AOI–TSX, AOI–Nasdaq Stockholm) … Africa Oil Corp. (“Africa Oil” or the “Company”) is pleased to announce its financial and operating results for the three and six months ended June 30, 2015.
During the second quarter of 2015, the Company focused its efforts on appraisal in the South Lokichar Basin, Extended Well Tests (EWTs) in the Amosing and Ngamia fields, and reservoir and engineering studies. This focus for 2015 has the following objectives; confirming reservoir quality and deliverability, resource size and definition, and advancement of the development plans, including the export pipeline. One drilling rig is currently active in the South Lokichar Basin.
The current ambition of the joint venture partnership is to position the South Lokichar Basin development, and an export pipeline, for possible sanction by the end of 2016, subject to receipt of all necessary permits and approvals. Good progress continues to be made towards development of these oil resources and as part of the ongoing collaboration between the Governments of Kenya and Uganda on the oil export pipeline for the Lake Albert and South Lokichar resources, a joint technical adviser was appointed in late 2014. Subsequent to the end of the second quarter of 2015, on 10 August 2015, the Governments of Kenya and Uganda issued a joint communiqué which stated that “the two Heads of State agreed on the use of the Northern Route i.e. Hoima-Lokichar-Lamu for the development of the crude oil pipeline.”
At June 30, 2015, the Company had cash of $157.5 million and working capital of $81.7 million. During February 2015, the Company completed a brokered private placement issuing an aggregate of 57,020,270 shares at a price of SEK 18.50 per share for gross proceeds of SEK 1,055 million or $125.0 million. During May 2015, the Company completed a non-brokered private placement issuing an aggregate of 52,623,377 shares at a price of CAD $2.31 for gross proceeds of $100.0 million.
The Company has completed the following significant operational activities in, and subsequent to, the second quarter of 2015:
- A number of Extended Well Tests (EWTs) have been completed at the Amosing field (Block 10BB – Kenya). The Amosing-1 and Amosing-2 wells were completed in five separate zones and initial rig-less flow testing during clean-up flowed at a cumulative maximum rate of 5,600 and 6,000 bopd respectively. These results exceeded expectations, and demonstrated high quality reservoir sands which flowed 31 to 38 degree API dry oil under natural conditions. During the test the wells produced at a cumulative average constrained rate of 4,300 bopd under natural flow conditions. Pressure data from the two wells supports significant connected oil volumes and confirms lateral reservoir continuity, which is positive for the future development. A cumulative volume of 30,000 barrels of oil has been produced into storage. Water injection tests are under way to further validate the viability of water flood reservoir management and the oil recovery assumptions.
- Drilling results from the Amosing-4 well, located approximately one kilometer southeast of the Amosing-1 well, which was drilled to test the southern extent of the field and successfully encountered 27 meters of net oil pay in thick upper reservoir zones proving the significant down-dip extent of the field.
- Drilling results from the Amosing-3 appraisal well, located one kilometer northwest of the Amosing-1 discovery well, were released earlier in the year. The well encountered up to 140 meters of net oil pay and proved an extension of the field. Pressure data from the Amosing-3 well indicated connectivity in some reservoir horizons encountered in the Amosing-1, 2 & 2A wells.
- Drilling results from the Ngamia-8 and Ngamia-9 appraisal wells (Block 10BB - Kenya) were released. The Ngamia-8 well encountered up to 200 meters of net oil pay in line with pre-drill expectations. The well was positioned in the center of the Ngamia structure and static pressure data indicates the well is in pressure communication with the oil discovered in the neighboring Ngamia-1A, Ngamia-3, Ngamia-5, Ngamia-6 and Ngamia-7 wells. The Ngamia-9 appraisal well encountered between 90 meters and 110 meters of net oil pay in the Lokone and Auwerwer horizons.
- The Ngamia 5, 6 and 7 appraisal well results were released earlier in 2015. The Ngamia-5 well is located 500 meters northeast of the Ngamia-1 discovery well in a different fault compartment and encountered 160 to 200 meters net oil pay, which is amongst the highest of all the wells drilled in the basin to date. The Ngamia-6 well is located approximately 800 meters north of the Ngamia-1 well and in the same fault compartment as the Ngamia-5 well and encountered up to 135 meters net oil pay. The Ngamia-7 well was drilled 1.2 kilometers east of the Ngamia-3 well and encountered up to 130 meters of net oil pay identifying a large eastern extension of the field that had been identified from the new 3D seismic survey.Pressure data from the Ngamia-3, 5 and 6 wells demonstrates connectivity between the wells at multiple reservoir horizons, which will be further tested by the EWT.
- The Ngamia field EWTs are due to commence in August. Multi zone completions have been installed in the Ngamia-8, Ngamia-3 and Ngamia-6 wells.
- A one rig operation will continue with the drilling of the Twiga-3 well, which is currently underway. The large Amosing North prospect located on the northern flank of Amosing and updip of the Ngamia field will be drilled next. The Cheptuket exploration well in Block 12A is scheduled to commence in October 2015 and will test a basin bounding structural closure in the Kerio Valley Basin in a similar structural setting to the successful Ngamia and Amosing discoveries. Other wells under consideration include Etom North (an appraisal well to follow up on our success at Etom-1) and Emesek (formerly named Tausi) (a basin opening well).
- The full fast track processed data set for the 951 square kilometer 3D seismic survey over the series of significant discoveries along the western basin bounding fault in the South Lokichar Basin, is now available and is being interpreted. The 3D seismic indicates significantly improved structural and stratigraphic definition and additional prospectivity not evident on the 2D seismic.
- The partnership has acquired over 1,100 meters of whole core from the wells drilled in the South Lokichar Basin, and an extensive program of detailed core analysis is ongoing that will provide results throughout the year. A key focus of the core program is to better assess oil saturation and to refine the recovery factors of the main reservoir sands. Early core analysis results support the reservoir assumptions used in the contingent resource estimate and are reducing the uncertainty around oil saturations in the reservoir.
- In the Rift Basin Area Block, a 2D seismic crew will complete the acquisition of approximately 600 kilometers of land and lake seismic in the third quarter of 2015. Source rock outcrops and oil slicks on the lakes have been identified in the block where there was previously no existing seismic or wells.
- Pre-FEED (Front End Engineering and Design) studies are being progressed for entry in to FEED.
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For the complete news release and report see attached file.
FOR FURTHER INFORMATION PLEASE CONTACT:
Africa Oil Corp.
Sophia Shane
Corporate Development
(604) 689-7842
africaoilcorp@namdo.com
www.africaoilcorp.com
