AFRICA OIL PROVIDES UPDATE ON PROPOSED TRANSFER OF PUNTLAND SUBSIDIARIES AND INDEPENDENT ASSESSMENT OF PROSPECTIVE RESOURCES

September 6, 2011 - Africa Oil Corp. (AOI - TSXV, AOI - NASDAQ OMX) (“Africa
Oil” or “the Company”) is pleased to provide an update to its previously
announced proposed transaction (the “Transaction”) with Denovo Capital Corp. (“
Denovo”) whereby Denovo will acquire all the issued and outstanding shares of
Canmex Holdings (Bermuda) I Ltd. (“Canmex”), Africa Oil's wholly-owned
subsidiary.


The TSX Venture Exchange (the “Exchange”) approved the filing of Denovo's
filing statement dated August 29, 2011 (the “Filing Statement”) relating to the
Transaction and the Filing Statement was filed on SEDAR on September 1, 2011. 
Denovo has made its initial submission to the Exchange but has not received
conditional approval of the Transaction.  Africa Oil and Denovo expect to be in
a position to close the Transaction in the next few weeks.  

Following the completion of the Transaction, Denovo will, among other things,
have consolidated its issued and outstanding common shares on the basis of one
post-consolidation common share for every 0.65 pre-consolidation common shares,
continued into the Province of British Columbia under the Business Corporations
Act (British Columbia) and changed its name to “Horn Petroleum Corporation”. 
For further information regarding the Transaction, please see Denovo's press
release dated August 11, 2011.

In connection with the Transaction, Africa Oil is pleased to announce the
results of an independent evaluation of the prospective resources held by
Canmex in the Dharoor Valley and Nugaal Valley Blocks in Puntland (Somalia) (“
Resource Report”).  The Resource Report, effective June 30, 2011, was prepared
for Denovo by Petrotech Engineering Ltd. (“Petrotech”) and in accordance with
the current guidelines outlined in the Canadian Oil and Gas Evaluation Handbook
and National Instrument 51-101 - Standards of Disclosure for Oil and Gas
Activities. A copy of the Resource Report may also be found under Denovo's
profile on SEDAR.

The Resource Report indicates that gross best estimate prospective resource in
the Dharoor Valley and Nugaal Valley Blocks, including both prospects and
leads, are in excess of 5.2 billion barrels of oil. A summary of Canmex's gross
and net share of the unrisked prospective resources (prospects) and the net
present values from the profit oil revenue less the un-recoverable amount of
funds from the production operation; discounted at 0, 5, 10, 15 and 20% before
and after income tax are presented in the table below. The net cash flow is
calculated at forecast prices and escalated costs on the prospective resources,
to all future time and after deduction of the capital costs, royalties and
before and after deduction of income tax.  All cash flow data is in U. S.
dollars.

 

(For table, see attached file)

 

Prospective resources (leads) are identified in both blocks and the unrisked
resources at 100% and are as follows:

 

Total Unrisked Prospective Resources (Leads) - Dharoor Valley and Nugaal Valley

 

Estimates                                 Low          Best         High

Petroleum Originally in Place (Mbbl)                     16,012,157  66,301,497
                                          1,044,887

Prospective Resources on Leads (Mbbl) @                              16,575,374
100% WI                                   156,733      3,202,431


Canmex's Share of the Cost Oil and Profit Oil cannot be determined at this time
until the leads can be upgraded to prospects together with the evaluation of
production and economic forecasts.

Definitions and Cautionary Statements

 

Prospective Resources: those quantities of petroleum estimated, as of a given
date, to be potentially recoverable from undiscovered accumulations by
application of future development projects.  Prospective resources have both an
associated chance of discovery and a chance of development.  Prospective
Resources are further subdivided in accordance with the level of certainty
associated with recoverable estimates, assuming their discovery and
development, and may be sub-classified based on project maturity.

 

Uncertainty Categories

 

Estimates of resources always involve uncertainty, and the degree of
uncertainty can vary widely between accumulations/projects and over the life of
a project.  Consequently, estimates of resources should generally be quoted as
a range according to the level of confidence associated with the estimates.  An
understanding of statistical concepts and terminology is essential to
understanding the confidence associated with resources definitions and
categories.  The range of uncertainty of estimated recoverable volumes may be
represented by either deterministic scenarios or by a probability
distribution.  Resource should be provided as low, best and high estimates as
follows:

 

  • Low Estimate: This is considered to be a conservative estimate of the
    quantity that will actually be recovered.  It is likely that the actual
    remaining quantities recovered will exceed the low estimate.  If
    probabilistic methods are used, there should be at least a 90 percent
    probability (P90) that the quantities actually recovered will equal or
    exceed the low estimate.

 

  • Best Estimate: This is considered to be the best estimate of the quantity
    that will actually be recovered.  It is equally likely that the actual
    remaining quantities recovered will be greater or less than the best
    estimate.  If probabilistic methods are used, there should be at least a 50
    percent probability (P50) that the quantities actually recovered will equal
    or exceed the best estimate.

 

  • High Estimate: This is considered to be an optimistic estimate of the
    quantity that will actually be recovered.  It is unlikely that the actual
    remaining quantities recovered will exceed the high estimate.  If
    probabilistic methods are used, there should be at least a 10 percent
    probability (P10) that the quantities actually recovered will equal or
    exceed the high estimate.

 

This approach to describing uncertainty may be applied to reserves, contingent
resources and prospective resources.  There may be significant risk that
sub-commercial and undiscovered accumulations will not achieve commercial
production.  However, it is useful to consider and identify the range of
potentially recoverable quantities independently of such risk.

 

Significant Positive and Negative Factors Relevant to the Resources Estimates

This news release contains forward looking information including, but not
limited to, estimated resources. The forward looking information is based on
current expectations and is subject to a number of risks and uncertainties
which could cause actual results to differ materially from those anticipated. 
These risks include, but are not limited to the following:

Risks Associated with Ever Making a Discovery

The estimation of prospective resource volumes for high-risk and poorly
calibrated basins can be subject to large variation from the introduction of
new information. The estimates presented herein are based on all of the
information available; however, new data or information is likely to have a
material effect on the resource assessment values. There is no certainty that
any portion of the resources will be discovered. If discovered, there is no
certainty that the discovery will be commercially viable to produce any portion
of the resources. Given that a significant portion of the resources in the
portfolio are in leads that require additional data to fully define their
potential it is likely that significant changes to the resource estimates will
occur with the incorporation of additional data and information.

Risk Associated with the Estimates

In the event of a discovery, basic reservoir parameters, such as porosity, net
hydrocarbon pay thickness, fluid composition and water saturation, may vary
from those assumed, affecting the volume of hydrocarbon estimated to be
present. Other factors such as the reservoir pressure, density and viscosity of
the oil and solution gas/oil ratio will affect the volume of oil that can be
recovered. Additional reservoir parameters such as permeability, the presence
or absence of water drive and the specific mineralogy of the reservoir rock may
affect the efficiency of the recovery process. Recovery of the resources may
also be affected by well performance, reliability of production and process
facilities, the availability and quality of source water for enhanced recovery
processes and availability of fuel gas. There is no certainty that certain
mineral interests are not affected by ownership considerations that have not
yet come to light.

Substantial Capital Requirements

Canmex expects to make substantial capital expenditures for exploration,
development and production of oil and gas reserves in the future.  Canmex's
ability to access the equity or debt markets in the future may be affected by
any prolonged market instability. The inability to access the equity or debt
markets for sufficient capital, at acceptable terms and within required time
frames, could have a material adverse effect on Canmex's financial condition,
results of operations and prospects.

Ability to Execute Exploration and Development Program

It may not always be possible for Canmex to execute its exploration and
development strategies in the manner in which Canmex considers optimal.
Execution of exploration and development strategies is dependent upon the
political and security climate in the host countries where Canmex operates. 
Canmex's exploration and development programs may involve the need to obtain
approvals from relevant authorities who may require conditions to be satisfied
or the exercise of discretion by the relevant authorities. It may not be
possible for such conditions to be satisfied.

 

Access to Infrastructure

 

Canmex's ability to produce and market hydrocarbons from any potential
discoveries will depend on its ability to access suitable infrastructure. 
Canmex may also be affected by deliverability uncertainties related to the
proximity of its potential production to pipelines and processing facilities
and operational problems affecting such pipelines and facilities as well as
potential government regulation relating to price and the export of oil and
gas. Currently there is limited local infrastructure and markets for oil,
natural gas and condensate and export infrastructure to enable other markets to
be accessed.  Canmex will work with its partners and government authorities to
evaluate the commercial potential and technical feasibility of any discovery
made.

Additional Risks

Additional risks associated with the estimate of the prospective resources
include risks associated with the oil and gas industry generally (i.e.
financing; operational risks in exploration, development and production; delays
or changes in plans with respect to exploration or development projects or
capital expenditures; the uncertainty of estimates and projections related to
production; costs and expenses; health, safety, security and environmental
risks; and the uncertainty of resource estimates), drilling equipment
availability and efficiency, the ability to attract and retain key personnel,
the risk of commodity price and foreign exchange rate fluctuations, the
uncertainty associated with dealing with governments and obtaining regulatory
approvals, and the risk associated with international activity.   

 

Other Information and Updates

 

Denovo and Africa Oil will continue to provide further details in respect of
the Transaction, in due course, by way of press releases.

 

Completion of the Transaction remains subject to a number of conditions,
including but not limited to, Exchange acceptance.  There can be no assurance
that the Transaction will be completed as proposed or at all.

 

The Exchange has in no way passed upon the merits of the proposed transaction
and has neither approved nor disapproved the contents of this press release.

 

Africa Oil Corp. is a Canadian oil and gas company with assets in Kenya,
Ethiopia, Mali and Puntland (Somalia). Africa Oil's East African holdings are
in what is considered a truly world-class exploration play fairway. The
Company's total gross land package in this prolific region is 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
OF                                                                              
   

AFRICA OIL
CORP.                                                                           
                                                

 

“Keith C. Hill”  
                                                                                
                                                   

President and
CEO                                                                             
                                               

 

 

For further information, please contact: 

 

Sophia Shane, Corporate Development, Africa Oil (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) has in any way
passed upon the merits of the Transaction and neither of the foregoing entities
has in any way approved or disproved the contents of  this release.