August 3, 2011 (AOI - TSXV, AOI - NASDAQ OMX) … Africa Oil Corp. (“Africa Oil”
or “the Company”) is pleased to provide an update on the Company's ongoing
exploration activities. The Company has launched a major exploration
initiative throughout its East Africa portfolio which includes at least 10
seismic acquisition programs (totaling over 7,000 kilometres), 6 full tensor
gravity surveys, extensive environmental studies, acquisition of high
resolution gravity and magnetic data as well as geochemical surveys. Over the
next 18 months, a minimum of 7 to 10 wells are planned to test the numerous
prospects identified throughout the blocks.
Kenya
The Company and Tullow Oil plc. (“Tullow”), its operating partner in each of
the Kenyan Blocks other than Block 9, have completed the work and/or are
proposing the work programs, described below.
Block 10BB
The Company and Tullow have integrated and interpreted all newly acquired (610
km) and vintage 2D seismic data. A number of prospects have been identified
and are being high graded for the planned drill program. The Ngamia (Camel)
prospect (previously named Fise-1) has been selected by the joint venture for
the initial well in Block 10BB. The prospect will test the oil potential in
Miocene age sandstones within a three way dip closure against the West Lokichar
rift fault. Ngamia is directly analogous to successful oil accumulations
drilled by Tullow and partners early in the exploration efforts in the Lake
Albert graben of Uganda. The contract for the drilling rig has been awarded to
Weatherford International and the rig is planned to be mobilized in August to
Kenya. Additional preparations for drilling, including purchase of materials,
execution of drilling related contracts, civil works, and environmental permits
are either completed or underway. Spudding of the Ngamia well is slated for
the fourth quarter of 2011. In addition to drilling operations, the Company
and its partner are currently acquiring a full tensor gravity survey (FTG) to
further define prospective areas of the block that lack 2D seismic data. The
survey should be completed in the fourth quarter of 2011.
(For location map showing the Ngamia prospect in Kenya Block 10BB, see attached
file)
Block 10BA
The Company and Tullow have initiated a FTG survey over most of Block 10BA,
covering all of Lake Turkana and most of the adjacent onshore areas. Two FTG
contractors are working simultaneously to expedite the survey, which is
expected to be completed during the fourth quarter of 2011. A seismic
acquisition contract has been awarded to the Bureau of Geophysical Prospecting
(“BGP”) for 1350 km of 2D data to be acquired in both the offshore lake
environment and nearshore transitional areas adjacent to Lake Turkana. The
offshore data will be acquired using state of the art Ocean Bottom Cable
(“OBC”), whereby the recording receivers will be positioned on the bottom of
the lakebed. Pre-seismic environmental studies are underway and permits are
expected to be in hand by early August 2011 enabling initiation of the seismic
survey in the fourth quarter of 2011.
Block 10A
The Company and Tullow have integrated and interpreted all newly acquired (750
km) and vintage 2D seismic data. A number of prospects have been identified
and are being high graded for selection of the first drilling location.
Preparations for drilling, including purchase of materials, execution of
drilling related contracts, civil works, and environmental permits are either
completed or underway. The Block 10A well is expected to spud in early 2012
using the same Weatherford rig as will be used in Block 10BB. In addition to
the drilling operations, a small swath of full tensor gravity (FTG) is being
acquired to test the applicability of the FTG technology in Block 10A. The
swath survey should be completed in the third quarter of 2011.
Block 13T
The Company and Tullow have awarded contracts for both a FTG survey and seismic
acquisition. The FTG survey is underway and is anticipated to be completed by
the third quarter of 2011. The recording of at least 562 km of 2D seismic data
by BGP is planned to commence in the fourth quarter of 2011. Environmental
impact studies and government permitting will precede the seismic survey.
Interpretation of reprocessed vintage seismic data has revealed a string of
interesting structures on trend with the Ngamia feature of Block 10BB. The
seismic program will focus on further delineation of these leads to mature them
to drillable prospect status.
Block 12A
The Company and Tullow have awarded contracts for both an FTG survey and
seismic acquisition. The FTG survey is underway and is expected to be
completed during the third quarter of 2011. The recording of at least 520 km
of 2D seismic data by BGP is planned to commence in January 2012.
Environmental impact studies and Government permitting will precede the seismic
survey.
Block 9
The Company holds 100% interest in Block 9 and current operations include the
acquisition of 750 km of 2D seismic data. The survey is 95% complete and is
expected to conclude in mid-August of 2011. The survey has been focused on
delineating a drillable prospect in the oil-prone Kaisut sub-basin in the
northwestern portion of the block. Newly acquired data is of excellent quality
and a number of interesting leads have been identified. One exploration well
is expected to be drilled during 2012. Additionally, the Company has completed
a study associated with potential commercialization of gas resources in the
2010 Bogal discovery prior to a potential 2012 Bogal re-entry, and testing
program. The Company plans to pursue a partner on Block 9 that brings gas
development and marketing experience to the joint venture.
Ethiopia
South Omo Block
The Company and its operating partner on the Block, Tullow, have recently
completed a FTG survey across most of the southern portion of the South Omo
Block. The results of the survey are encouraging and will be used to lay out
the upcoming 2D seismic survey. A contract with BGP for the acquisition of at
least 1000 km of 2D seismic data has been executed and base camp construction
began in July 2011. The seismic recording is estimated to commence during the
third quarter of 2011. Environmental impact studies and government permitting
will precede the seismic survey.
Ogaden Blocks 7/8
The Company and its partners have integrated and interpreted all newly acquired
(430 km) and vintage 2D seismic data over the two blocks. The joint venture is
currently focused on developing a better understanding of the large El Kuran
oil and gas accumulation in Block 8, discovered in the early 1970's. The
Company has completed a reservoir characterization study over the El Kuran
structure. A revised analysis of the well data has confirmed the presence of
light oil in the Jurassic limestones. The Company is currently analyzing how
best to re-drill and test El Kuran in hopes of proving up movable, commercial
quantities of oil. Preparations for drilling, including purchase of materials,
execution of drilling related contracts, civil works, and environmental permits
have commenced. Spud of the El Kuran well is anticipated in the first half of
2012.
Ogaden Blocks 2/6
Ogaden Blocks 2/6 have been relinquished and Ministerial approval to waive
remaining commitments is expected shortly.
Adigala Block
The Company and its partner have completed the first exploration period of
three years and have exceeded the contractual work obligations. Negotiations
with the Ministry of Mines to enter the second period of exploration for the
Adigala Block are ongoing. The Company and its partner are proposing
additional geologic and geophysical studies to better understand the subsurface
configuration of the block. In addition, the partnership is contemplating
drilling a stratigraphic test well if a suitable light rig can be secured at
reasonable costs.
Rift Valley Joint Study Block
The Company completed the acquisition of high resolution gravity and magnetic
data over the Rift Valley Block in April 2011. Final processing and
interpretation is anticipated to be completed during the third quarter of
2011. The gravity and magnetic interpretation will enable the Company to
decide whether to commit to a further work program under a formal production
sharing agreement. The block is on trend with highly prospective blocks in the
Tertiary rift valley such as Ethiopian South Omo block, and Kenyan blocks 10BA,
10BB, 13T, and 12A. Additionally, the Company mobilized geochemical
specialists to collect fluid samples (potential oil seeps) from the surface and
/or margins of the major rift lakes Abaya and Chamo, within the southern
portion of the block. A total of 17 samples were collected of which 3 revealed
hydrocarbon signatures.
Puntland-Somalia
Dharoor and Nugaal Valley Blocks
The Company and Denovo Capital Corp. ("Denovo") have entered into a letter of
intent dated May 11, 2011 for the creation of a new Puntland focused oil
exploration company to be named Horn Petroleum Corp. (“Horn Petroleum”). Horn
Petroleum will be created as a result of the sale, to Denovo, of the
subsidiaries of the Company that hold its oil and gas properties in Puntland
Somalia. Certain management and technical services are expected to be provided
to Horn Petroleum by the Company under a service contract.
On August 2, 2011 Horn Petroleum completed a $40.98 million private placement
financing, with assistance from Africa Oil. These proceeds will be used to
fund Horn Petroleum's share of costs associated with the drilling of two
exploratory wells in the Dharoor Valley Block. Africa Oil subscribed for $10
million of the private placement and will have an approximately 50% interest in
Horn Petroleum when the transaction completes. Completion of the acquisition
of Africa Oil's interest in Puntland, Somalia by Horn Petroleum remains subject
to, amongst other things, TSX Venture Exchange approval.
The Company is currently in final preparations to commence the two well
drilling campaign in the Dharoor Valley Block, with the first well planned to
spud in the fourth quarter of 2011. Drilling locations have been selected over
two robust prospects targeting gross best estimated prospective resources of
over 300 million barrels each based on internal estimates. Contracts for a
drilling rig and third party services are in advanced stages of negotiations
with contract execution scheduled for early August.
The Puntland Government and Dharoor Valley communities are fully supportive of
the drilling project and have ensured they will do all to allow the project to
move forward safely and expeditiously. Specific milestone target dates have
been adjusted by the Puntland Government allowing the Company and partners to
move the drilling start-up to the fourth quarter of 2011. In addition, partial
relinquishments in both the Dharoor Valley and Nugaal Valley agreements have
been finalized and approved. The Puntland Government has also given its
approval for the formation of Horn Petroleum and the impending transaction with
the Company.
Mali
Blocks 7 and 11
The Company and its partner, Heritage Oil and Gas Ltd. (“Heritage”) have
recently completed the acquisition of 848 km of 2D seismic in Block 11 and 243
km in Block 7. Both blocks are located in the Gao Graben which is thought to
be analogous to other Cretaceous age, oil productive, central African rift
basins. The Company's share of costs for initial seismic and the drilling of
the first exploratory well are fully carried by its single partner, Heritage.
Keith Hill, President and CEO, commented, “We are moving into a very exciting
period for Africa Oil which is expected to include the drilling of 7 to 10
exploration wells in the next 18 months that will test all the major petroleum
systems in our extensive portfolio. Additional exploration activities will
continue into the third quarter with FTG, 2D seismic and drilling preparations
on multiple blocks to further delineate propsects. The Company remains well
financed with reputable joint venture partners."
Africa Oil Corp. is a Canadian oil and gas company with assets in Kenya,
Ethiopia and Puntland (Somalia). Africa Oil's East African holdings are in
within a world-class exploration play fairway with a total gross land package
in this prolific region in excess of 300,000 square kilometers. The East
African Rift Basin system is one of the last of the great rift basins to be
explored. New discoveries have been announced on all sides of Africa Oil's
virtually unexplored land position including the major Albert Graben oil
discovery in neighbouring Uganda. Similar to the Albert Graben play model,
Africa Oil's concessions have older wells, a legacy database, and host numerous
oil seeps indicating a proven petroleum system. Good quality existing seismic
show robust leads and prospects throughout Africa Oil's project areas. The
Company is listed on the TSX Venture Exchange and on First North at NASDAQ
OMX-Stockholm under the symbol "AOI".
FORWARD-LOOKING STATEMENTS
Certain statements made and information contained herein constitute
"forward-looking information" (within the meaning of applicable Canadian
securities legislation). Such statements and information (together, "forward
looking statements") relate to future events or the Company's future
performance, business prospects or opportunities. Forward-looking statements
include, but are not limited to, statements with respect to estimates of
reserves and or resources, future production levels, future capital
expenditures and their allocation to exploration and development activities,
future drilling and other exploration and development activities, ultimate
recovery of reserves or resources and dates by which certain areas will be
explored, developed or reach expected operating capacity, that are based on
forecasts of future results, estimates of amounts not yet determinable and
assumptions of management.
All statements other than statements of historical fact may be forward-looking
statements. Statements concerning proven and probable reserves and resource
estimates may also be deemed to constitute forward-looking statements and
reflect conclusions that are based on certain assumptions that the reserves and
resources can be economically exploited. Any statements that express or involve
discussions with respect to predictions, expectations, beliefs, plans,
projections, objectives, assumptions or future events or performance (often,
but not always, using words or phrases such as "seek", "anticipate", "plan",
"continue", "estimate", "expect, "may", "will", "project", "predict",
"potential", "targeting", "intend", "could", "might", "should", "believe" and
similar expressions) are not statements of historical fact and may be
"forward-looking statements". Forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such forward-looking
statements. The Company believes that the expectations reflected in those
forward-looking statements are reasonable, but no assurance can be given that
these expectations will prove to be correct and such forward-looking statements
should not be unduly relied upon. The Company does not intend, and does not
assume any obligation, to update these forward-looking statements, except as
required by applicable laws. These forward-looking statements involve risks and
uncertainties relating to, among other things, changes in oil prices, results
of exploration and development activities, uninsured risks, regulatory changes,
defects in title, availability of materials and equipment, timeliness of
government or other regulatory approvals, actual performance of facilities,
availability of financing on reasonable terms, availability of third party
service providers, equipment and processes relative to specifications and
expectations and unanticipated environmental impacts on operations. Actual
results may differ materially from those expressed or implied by such
forward-looking statements.
ON BEHALF OF THE BOARD
“Keith C. Hill”
President and CEO
For further information, please contact: Sophia Shane, Corporate Development
(604) 689-7842.
Africa Oil's Certified Advisor on First North is E. Öhman J:or Fondkommission
AB.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
