Oil Exploration in East Africa: Activity in the Northern Rift Valley
While attention on East Africa is, quite naturally, focused at the moment on Mozambique, Tanzania, Uganda and the eastern part of the Democratic Republic of Congo, there are frequently little and generally overlooked announcements about exploration and production activity further north, in Somalia, Ethiopia and the northern Kenyan parts of the Rift Valley. I thought that perhaps it was worth pulling some of them together. For good reason - political stability being a key one - there currently doesn't seem to be much investment interest in the area. None of the big firms seem to be directly (or overtly) involved, apart from CNOOC, and not many wells have yet been drilled.
This article is intended, therefore, to be a place to draw together any news that does appear - more for reference than for any immediate investment interest (as far as I am concerned, anyway). If there are more significant discoveries in the Ugandan part of the Rift Valley, then there might well be some more M&A activity affecting the smaller fry. Perhaps that might spread further north?
It is also worth perhaps bearing in mind that there seems a strong possibility that Sudan may break into its two component parts of North and South when the referendum takes place in January 2011. If so, then the potentially oil-bearing basins in the South will also attract more attention (provided the area is peaceful, of course! And there might be more instability, too, if the results are contested.
Let me start off with African Oil Corporation (CVE:AOI), a company that has quietly picked up a lot of potentially interesting acreage in Somaliland, Ethiopia and Northern Kenya with a collection of announcements which I will detail below. In Ethiopia and Northern Kenya, falling within the Rift Valley, they got under way by acquiring the Lundin Petroleum acreage in Ethiopia and Kenya, completed in April 2009. In February 2010, they acquired two new blocks in Kenya from Platform Resources (part of Alberta Oilsands) and announced a farmout to Lion Energy in March 2010 of three Kenyan blocks and two blocks located in Puntland, Somalia.
The latest announcement is the acquisition of an 80 per cent interest in Ethiopian acreage held by Agriterra (LON:AGTA - formerly White Nile - remember them?), with the CEO Keith Hill commenting:
"The addition of the South Omo block brings the total gross acreage on which the Company has signed agreements on to almost 250,000 square kilometres and gives us a dominant land position in the highly prospective East Africa Tertiary Rift trend. We currently have two seismic crews and one drilling rig active and are expecting to test all major play types within the next 12 to 18 months. The increased activity in East Africa will also allow us to attract international partners to reduce the risk capital required to explore these highly prospective rift basins."
The other company that is also planning to venture into the region is Victoria Oil & Gas (LON:VOG), which has decided to pursue its option to buy Falcon Petroleum, a UAE private company headed by former VOG Director Rashid Al Suwaidi, which has 45,000 square kilometres of exploration acreage in both Ethiopia and Mali. According to the company’s announcement at the beginning of May:
“Falcon represents a low-cost entry into two exciting hydrocarbon regions and after an independent assessment of the asset potential and its value, we will be looking to press ahead with an acquisition later this year”.
I won't focus too much on the Somali interests. The region is far too prone to insecurity, in my view, except to note that Africa Oil are in partnership there with Range Resources (LON:RRL) and have just signed a letter of intent to farm out another 10 per cent to Red Emperor Resources, an Australian mining minnow.
Contributions and discussion are, of course, welcome below.
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18 comments
Africa Oil have completed the farm-in/out deal with Tullow for three blocks in Kenya and Ethiopia, according to this Reuter's story
http://www.reuters.com/article/idUSLDE70P1O820110126?feedType=RSS&feedName=rbssEnergyNews&rpc=43
And though the story isn't quite as well edited as it might have been, it looks as though another couple of blocks are to be farmed down to Tullow as well.
Tullow not shy about picking up more acreage in the area, then.
Man Siarad
Tullow Oil (TLW.L) trading statement tomorrow may have further information.
fuiseog
Africa Oil have revised their Puntland PSAs and are planning two wells this year.
http://www.energy-pedia.com/article.aspx?articleid=143745
Africa Oil Corp has announced that Africa Oil, together with Range Resources and Lion Energy, its joint venture partners, has entered into amending agreements with the Government of Puntland, represented by the Puntland Petroleum and Mineral Agency, in respect of the production sharing agreements (PSAs) for the Dharoor Valley Exploration Area and the Nugaal Valley Exploration Area. Under the PSAs, as amended, the First Exploration Agreement has been extended for a further 12 months, from January 17, 2011 to January 17, 2012.
Under the amended PSAs Africa Oil is obligated to spud a minimum of one exploratory well in the Dharoor Valley Exploration Area by July 27, 2011. A second exploratory well is required to be spudded in the Nugaal Valley Exploration Area or, at the option of Africa Oil, in the Dharoor Valley Exploration Area, by September 27, 2011.
The Dharoor Valley block looks pretty close to the 'Pirate Coast' to me.
They have the go ahead according to the latest release and included in this release it says that negotiations are at an advanced stage. I hope they are successful, just look at the time scale they have.
http://www.thepressreleasewire.com/client/africa_oil/release.jsp?year=2011&actionFor=1380915&releaseSeq=0
The Chinese are giving up their last Kenya acreage
http://www.businessdailyafrica.com/Corporate%20News/CNOOC%20quits%20Kenya%20oil%20drill%20and%20heads%20for%20Uganda/-/539550/1077918/-/13ay1wmz/-/
Block 9 to be relinquished before the end of the year.
That leaves Anadarko and Tullow as the large companies involved, wioth Africa Oil (larger now because of its take-over of Centric) as the key minor player.
Now let's see what 2011 brings in terms of exploration.
Happy Christmas !
Man Siarad
The Kenya High Court ruling dismissed the case by Interstate Petroleum as being "without merit", awarding costs to the Ministry of Energy, and the interested parties, including Africa Oil and Centric Energy.
Presumably now the takeover of Centric by Africa Oil will progress to completion, as will the 50% farm-in by Tullow Oil.
It might be worth watching where Centric CEO Alec Robinson emerges. See Upstream article and other links here:
http://boards.fool.co.uk/as-mentioned-in-the-op-the-judicial-review-due-12126018.aspx
Hi Man Siarad,
I misinterpreted the wording in the header - "more for reference than for any immediate investment interest" - my mistake.
Looking at Africa Oil more closely, the current share capital structure is:
http://www.africaoilcorp.com/s/ShareStructure.asp
Shares out: 99.68m
Options : 3.99m
Warrants : 44.31m *including those wts subject to accelerated expiry on 23rd December.
Fully Diluted : 147.99m
At C$2.10, fully diluted market cap = ~ C$311m, equivalent to £200m @US$1.56.
Upon acquisition of Centric Energy (to be completed by 15 March 2011, and subject to Centric shareholder approval in February), The share capital structure will be (I think):
Existing Fully Diluted: 147.99m
Centric Acquisition : 30.15m (98m shares+options x 0.3077)
Proposed Fully Diluted: 180.14m, giving a market cap, assuming C$2.10/share, of C$378m = £242m.
Centric shareholders will also receive C$0.0001 per share in cash, which might just buy a pint or two of Doom Bar down the local hostelry!
The addition of Block 10BA to Africa Oil's contiguous Kenya Rift Valley Blocks centred on Lake Turkana provides a very strong position as exploration preparations build.
Not forgetting Centric's Mali Blocks (25% WI) where the company is free-carried by Heritage Oil (75% WI) to include 2D seismic currently being acquired and the first well.
-----------------------------------
Dominion Petroleum's 100% interest in Tanzania deepwater Block 07 contains the Alpha gas prospect, with a 7TCF (1.17 boe) recoverable prospective resource. Dominion, I imagine, needs to farm-down a substantial part of its WI to proceed.
TMF regular Tullow contributor, "12global", will be in East Africa for the Petroleum Conference early in the new year. He hopes to add some colour to regional events on his return.
http://boards.fool.co.uk/i-will-be-heading-out-to-east-africa-for-the-12101897.aspx
Chris,
Off-topic for this thread but, as a Centric holder, I intend taking the AOI paper.
Not really off-topic, I think.
As I see it, the whole of northern Rift Valley play(s) are going to throw up a number of potentially-interesting companies which have so far received relatively little attention but which might be radically transformed by any future success in the area.
We should know Tullow well enough by now, (and it's too big to be completely transformed by any success in its Kenyan acreage), but perhaps AOI is becoming one of those which could benefit dramatically. IMO, it's certainly worth adding to a watchlist of companies in East Africa as a whole that are worth following - plenty of acreage and potential for company-changing results, or for some further interesting farm-out activity. A bit like Dominion, perhaps?
Man Siarad
Off-topic for this thread but, as a Centric holder, I intend taking the AOI paper.
The takeover announcement looks to be very positive for the outcome of the final court ruling on the Interstate Petroleum challenge to the legality of the licences (set for 16th December), and the combined entity will enter the exploration phase well funded and with a first class JV partner/Operator. That's good for all the partners, host governments, and investors alike.
Thanks to Chris Walden on TMF for this:
http://www.centricenergy.com/news-amp-media/press-coverage/details/article/proposed-acquisition-by-africa-oil-corp.html
Centric to be acquired by Africa Oil.
Not quite all-paper:
Under the terms of the Transaction, each Centric shareholder will receive 0.3077 of a common share of Africa Oil and C$0.0001 in cash for each Centric Share held, which represents a premium of 71% based on the 20-day volume weighted average trading prices of both Africa Oil and Centric on the TSX Venture Exchange for the period ended November 26, 2010.
...
Highlights of the Combined Entity
The directors and management of Centric expect that the combination of the two companies will benefit the existing shareholders of Centric who will exchange their Centric shares for the shares of Africa Oil, which will:
be a leading East African focused exploration company with the largest exploration portfolio in Kenya that provides exposure to the highly prospective East Africa rift basin trend and rift basins in Puntland which are thought to be the extension of productive basins in Yemen
have a larger, more diversified exploration portfolio representing total net contingent and prospective unrisked resources of 4,558 MMboe in three east African countries and in Mali, central west Africa
have numerous high impact drilling targets in geological settings analogous to the highly-productive basins of Uganda (Albertine basin), south Sudan (Muglad and Melut basins) and Yemen
be in a strong financial position with currently available cash of approximately C$50 million to fund the combined company’s active upcoming work and drilling program
have the potential to acquire additional East African opportunities through its enhanced access to external financing source.
An interesting company emerging here, and a good premium for Centric holders.
The Kenyan High Court's stay order on Centric's Lake Turkana block has been lifted.
http://www.energy-pedia.com/article.aspx?articleid=143015
as noted in an earlier post, Tullow have agreed to farm-in for 50% of the block.
It's puzzling to note the wording of Centric's and Africa Oil's releases following the 16th November judicial review.
Of the six blocks involved, three (10BB, 12A, 13T) are the subject of farm-outs to Tullow by Africa Oil.
Here's what AOI said:
"The High Court in Kitale, Kenya, heard the submissions of the parties on November 16, 2010 and will issue a final ruling on the case on December 16, 2010. In the interim, the stay order that had initially been imposed on operations under the exploration permits was lifted.
Keith Hill, the Company's President stated, "We are advised that the court proceedings went very well. We had requested an early resolution of the matter and are extremely optimistic that the December 16 ruling will dismiss Interstate's application." "
http://www.thepressreleasewire.com/client/africa_oil/release.jsp?actionFor=1354872&releaseSeq=0&year=2010
Centric Energy, whose block 10BA is the subject of a farm-out also to Tullow, said a little more:
"The result of the hearing on November 16th is that the Court has agreed to lift the previously-granted Stay Order which had been halting exploration on Block 10BA subject to the Company agreeing to compensate the Applicant for any resulting loss it may incur. The Court has set a date of December 16th, 2010, for issuing a final ruling on the case."
http://www.centricenergy.com/news-amp-media/corporate-releases/details/article/exploration-stay-order-lifted-on-kenya-block-10ba.html
Agreeing to compensate Interstate Petroleum for any loss it MAY incur seems to suggest in the future, so one wonders what this truly means, also whether it might also apply to Africa Oil, albeit nothing was mentioned by the latter.
I missed this, so thanks to xxnjr on TMF, who notes that Tullow are thought to be evaluating the idea of farming into the Southwest Energy acreage.
http://boards.fool.co.uk/this-is-a-little-bit-off-topic-but-given-tlw-are-12092253.aspx
A reshuffling of concessions in Ethiopia.
http://www.sw-oil-gas.com/southwest_energy_news.htm
OCT 2010 - SOUTHWEST ENERGY AGREES TO ACQUIRE PETRONAS CARIGALI'S OIL AND GAS INTERESTS IN ETHIOPIA:
(Addis Ababa and Kuala Lumpur – 6 October 2010) SouthWest Energy is pleased to announce that on 24 September 2010 it agreed to purchase from PETRONAS Carigali Overseas Sdn Bhd (PETRONAS Carigali), all of its oil and gas interests in Ethiopia. The transaction is expected to be completed during the first quarter of 2011 following the fulfilment of certain conditions precedent, including regulatory approval.
PETRONAS Carigali Overseas Sdn Bhd, which is the international exploration and production subsidiary of Malaysia's national oil company, PETRONAS, is a party to five petroleum production sharing agreements (PSAs) for oil and gas exploration and production in Ethiopia. SouthWest Energy has agreed to purchase 100% of PETRONAS Carigali's interests in each of those PSAs. The blocks and contract areas covered by the PSAs are Blocks 3&4, 11&15, 12&16, 17&20 and the Calub & Hilala contract area. All of the blocks and contract areas are located southeast of Addis Ababa, in the Ogaden Basin, which covers 350,000 sq km and is the largest proven hydrocarbon bearing sedimentary basin in Ethiopia with proven gas reserves of 2-4 TCF.
"This is a fantastic opportunity for SouthWest Energy to expand its exploration and production activities in Ethiopia," said Tewodros Ashenafi, Chairman and CEO of SouthWest Energy. "This transaction will transform SouthWest Energy into the leading force in the Ethiopian upstream industry. We intend to develop these new blocks together with our existing blocks as quickly as possible and to work on developing transport solutions for hydrocarbons in the Ogaden Basin. This development will be a cornerstone not only for SouthWest Energy's future growth, but also for the oil and gas industry in Ethiopia."
Orrick, Herrington & Sutcliffe LLP is acting as SouthWest Energy's legal advisors on the transaction, and Standard Bank Plc is acting as SouthWest Energy's financial advisor.
It will be interesting to see if TLW do, indeed, farm in to this acreage - that would give them a massive presence in the whole area, excluding Somalia (and best to stay away for that for a while, I would have thought).
Man Siarad
Time for a bit of an update on what's happening
Centric announce government approval of Tullow farm-in
http://www.marketwatch.com/story/centric-energy-announces-kenya-government-approval-of-block-10ba-farmout-2010-11-04-171440?reflink=MW_news_stmp
Centric Energy Corp. ("Centric Energy" or "the Company") (tsx venture:CTE) is pleased to announce that the Kenyan Government has approved the farm-out of a 50 percent interest in Block 10BA to Tullow Oil PLC ("Tullow") /quotes/comstock/23s!e:tlw (UK:TLW 1,249, +1.00, +0.08%) .
Block 10BA covers 16,205 square kilometres in the northwestern part of Kenya, the size of approximately 65 UK North Sea exploration blocks. It includes approximately 75 percent of Lake Turkana. It is located in the eastern arm of the Tertiary-age East African Rift system and is considered analogous(1) to the Albertine rift in Uganda, where an estimated 1 billion barrels of reserves have been proven to date, with another 1.5 billion barrels of prospective resources(2). The Lake Albert blocks are operated by Tullow Oil, and out of 36 exploration wells drilled, 35 have been successful.
and CNOOC are still after a farm-in to Tullow's blocks, having given one back and thinking about relinquishing another
http://uk.news.moneycentral.msn.com/ticker/article.aspx?symbol=GB:TLW&feed=MCIntl&date=20101104&id=12357809
CAPE TOWN, Nov 4 (Reuters) - China's CNOOC has not yet made a formal application to withdraw from a second Kenya exploration licence, a senior official at the east African country's National Oil Corporation said on Thursday.
CNOOC drilled a well in Kenya's block 9 in partnership with Canada's Africa Oil and Taiwan's CPC, and was consulting with them before reaching a final decision, said Peter Thuo, exploration and production team leader at Kenya's state-owned oil company.
Last month a Kenyan government official said CNOOC intended pulling out of its two Kenyan licences, although it wanted a 20 percent participation in another five blocks to be operated by UK-listed Tullow Oil.
"They have actually not yet withdrawn from Kenya. They have given back one exploration block, L2 in the Lamu Basin," Thuo told Reuters on the sidelines of an African oil conference.
As noted, by the way, in this TMF post from Ingermarie,
http://boards.fool.co.uk/lundin-petroleum-results-12084415.aspx
although Africa Oil took over Lundin's East African interests, Lundin have a good way of getting back in, if they so wish:
I notice incidentally that Africa Oil, also part of the Lundin Group, owes Lundin Petroleum over 20 million US dollars. This loan is redeemable before the end of 2011 and Lundin has the option to take shares at $0.90Can - less than half the current share price of Africa oil. Perhaps the next disbursement to Lundin Petroleum shareholders?
and from the original announcement:
http://www.lundin-petroleum.com/Press/pr_corp_05-02-09_e.html
Africa Oil is a Canadian oil and gas company with exploration interests in East Africa. Africa Oil's shares are listed on the Toronto Stock Exchange (Venture) under the symbol "AOI". Africa Oil is headquartered in Vancouver, Canada and one of its major shareholders is related to the Lundin family.
Africa Oil will pay Lundin Petroleum consideration of approximately USD 20 million, which will be funded through a loan from Lundin Petroleum to Africa Oil maturing 31 December 2011 and bearing interest at USD six-month LIBOR plus 3 percent. This loan will be convertible into shares of Africa Oil on the basis of CAD 0.90 per share.
This paper from the "Economics of Peace and Security Journal" by Lundin's Vice President - Corporate Responsibility, on lessons the company has learned from its operations in Sudan, Ethiopia and Kenya, is well worth a read for those wishing to delve deeper into the nature of political risk in the area - especially as the Southern Sudan referendum draws ever closer.
http://www.lundin-petroleum.com/Documents/ot_co_Eafrica_article.pdf
Man Siarad
I missed this one last week. To make it possible for Africa Oil to make their deal with Tullow, they've had to persuade Lion Energy to give up some of what was agreed under the farm-out earlier in the year:
http://www.sys-con.com/node/1518960
VANCOUVER, Sept. 2 /PRNewswire-FirstCall/ - Lion Energy Corp. (the "Company" or "Lion Energy") (TSX.V - LEO) is pleased to report that it has come to an agreement with Africa Oil Corp. ("Africa Oil") regarding certain amendments to the existing farmout agreement on all its east Africa assets. The amendment of the Lion farmout agreement with Africa Oil provides that Lion will reduce its interest in Block 10BB to 10% (originally 20%) and will not retain any interest in Block 10A (originally 25%). As consideration Africa Oil has agreed to pay Lion US$2.5 million in cash and to issue to Lion 2.5 million common shares of Africa Oil. Africa Oil has also agreed to the elimination of future expenditure promotes in Block 10BB and on the Company's projects in Puntland (Somalia) and the release of US$4.0 million in escrowed funds.
The resultant working interest in the Kenya and Somalia blocks upon closing the Lion amending agreement will be:
Block 10BB (Kenya) Tullow 50% Africa Oil 40% Lion10% Block 10A (Kenya) Tullow 50% Africa Oil 30% EAX (Black Marlin) 20% Block 9 (Kenya) CNOOC 40% OPIC 30% Africa Oil 20% Lion 10% Puntland (Somalia) Africa Oil 65% Range 20% Lion 15%The amendments to the farmout agreement are subject to the successful closing of a definitive farmout agreement between Tullow Oil plc ("Tullow") and Africa Oil whereby Tullow will acquire a 50% interest in, and operatorship of, three of Africa Oil's east African exploration blocks, comprised of two exploration blocks in Kenya and one exploration block in Ethiopia. Under the terms of the Tullow farmout agreement, Tullow will acquire a 50% interest in, and operatorship of, Blocks 10BB and 10A in Kenya.
...
Africa Oil is currently acquiring seismic in Block 10BB in Kenya. Drilling of the first exploration well on this block is expected to take place during the first half of 2011. The Company continues evaluation of a potential gas discovery and additional hydrocarbon potential in Block 9 in Kenya. Drilling plans in Puntland Somalia continue to progress but the first well on these blocks will likely be delayed until 2011.
Man Siarad
Another bit of news from Centric Energy, related to Block 10BA in Kenya - oil seeps identified.
http://www.oilvoice.com/n/Centric_Energy_Announces_Results_of_Kenya_Oil_Seep_Study/5f7149510.aspx
Centric Energy Corp. announces results of an Synthetic Aperture Radar (SAR) oil-seep study of its Block 10BA, northwest Kenya.
As part of its ongoing exploration work in Block 10BA, Centric Energy has purchased sixteen satellite acquired SAR scenes from Fugro NPA Ltd to provide a minimum of three SAR scenes from different dates over all areas of Lake Turkana. Fugro NPA's experts undertook an interpretation of these data to identify and classify possible surface slicks on Lake Turkana. They categorised the observed slicks as either "Priority Unassigned" slicks, which is an oil slick with an estimated 20 percent chance of being related to natural oil seepage, or "Unassigned" which is an oil or non-oil slick that has an estimated 10 percent chance of being related to natural seepage. ...
It is important that the interpreted slicks on the lake and the mapped seep on the shore are validated by sampling them in the field and undertaking chemical and geochemical analyses to identify the source of the oil. This work is planned for later in 2010. "The results of this oil seep study are encouraging and we are cautiously optimistic," said Alec Robinson, President & CEO of Centric Energy.
"These results need to be confirmed by fieldwork and sampling, and geochemical analyses, which we expect will be conducted during late 2010. If this future work confirms that the oil is due to natural seepage it will greatly improve our risk assessment of the exploration potential of Block 10BA."
Tullow 50% following last month's farm-in. Quite timely, it seems...
Thanks to Subsurface on TMF for finding the announcement on OilVoice
Man Siarad
Problems in Uganda notwithstanding, Tullow TLW.L clearly still have high hopes of East Africa as a whole with the announcement today that they're taking a 50 per cent stake in the Africa Oil Rift Valley concessions in Kenya and Ethiopia
http://www.investegate.co.uk/Article.aspx?id=201009020700150193S
cheap, too
Under the terms of the agreements with Africa Oil, Tullow will reimburse pro-rata past costs in each of these blocks and will carry Africa Oil for future net expenditures up to US$23.75 million.
That could prove to be a VERY low-cost deal.
Map of the acreage available here
http://www.tullowoil.com/index.asp?pageid=137&newsid=675
which shows just what an enormous area is involved, by comparison with the Ugandan lakes stuff.
This deal follows one with Centric Energy last month - a farm-in to Kenyan Block 10BA - also shown on the map, which wasn't deemed worthy of a separate RNS. It's tucked away in the half-yearly report
http://www.investegate.co.uk/Article.aspx?id=201008250700135815R
Kenya
In August, Tullow agreed to farm-in to a 50% operated interest in Centric Energy's 100% owned Block 10BA in north-western Kenya subject to completion of due diligence, negotiating the necessary agreements and receiving Government of Kenya approval. This frontier acreage covers 16,205 sq km and will be evaluated for its possible long-term hydrocarbon potential.
The Africa Oil president and CEO is quoted in the above post, from June, as saying:
We currently have two seismic crews and one drilling rig active and are expecting to test all major play types within the next 12 to 18 months. The increased activity in East Africa will also allow us to attract international partners to reduce the risk capital required to explore these highly prospective rift basins."
Perhaps Tullow will increase the drilling programme in Kenya & South Omo in Ethiopia if the Ugandans continue to be difficult?
Man Siarad
Africa Oil - summary of recent developments
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 16, 2010) - Africa Oil Corp. (TSX VENTURE:AOI) ("Africa Oil" or "the Company") is pleased to announce that it has signed a definitive agreement with Platform Resources Inc. ("Platform"), a wholly owned subsidiary of Alberta Oilsands Inc., to take an assignment of Platform's 100% interest in Blocks 12A and 13T in Kenya. To see attached location map please click on: .
The new contract areas are adjacent to the Company's Block 10BB which hosts the Loperot-1 oil discovery (see news release dated January 7, 2010 for resource estimates). Existing gravity data on Blocks 12A and 13T suggests that the proven Lokichar basin and other prospective sub-basins and known strong leads in Block 10BB may extend onto these new blocks...
The Production Sharing Contracts covering Blocks 12A and 13T are dated September, 2008 and have an initial exploration period of 3 years. The initial minimum exploration expenditures are $3.65 million (Block 13T) and $3.6 million (Block 12A). The initial exploration work program includes 500km of 2D seismic or 100 km2 of 3D seismic (or a combination thereof) on each block.
Keith Hill, President and CEO of Africa Oil, commented, "These two new blocks consolidate our land holdings around Block 10BB located within the highly prospective East Africa Rift Trend. The exploration play is an analogue to the giant East African Tertiary rift-hosted Lake Albert oil discovery made by Tullow and Heritage. We are excited to note that some of our key leads and prospects within Block 10BB extend onto our new blocks, which greatly enhances the exploration play. We intend to shoot seismic in the coming months on these new blocks concurrently with our work on Block 10BB. Blocks 13T and 12A comprise an area of over 23,800 km2 which now brings the total gross acreage held by Africa Oil and its partners in East Africa to well over 225,000 km2."
March 2010 Farmout to Lion Energy, (Somalia and Kenya)
http://cnrp.marketwire.com/client/africa_oil/release.jsp?actionFor=1132050&releaseSeq=6&year=2010
VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 15, 2010) - Africa Oil Corp. ("Africa Oil" or "the Company") (TSX VENTURE:AOI) is pleased to announce that it has signed a Letter of Intent with Red Emperor Resources NL ("Red Emperor") pursuant to which Red Emperor will acquire a participating interest in the Dharoor and Nugaal Valley Blocks located in Puntland (Somalia).
Under the terms of the Letter of Intent, Red Emperor will earn a 10% interest in both the Dharoor and Nugaal Valley Blocks and is committed to paying a disproportionate share of costs related to the one well drilling commitment included in the first exploration period of both the Dharoor and Nugaal Valley Production Sharing Agreements. Red Emperor may, at its own discretion, exercise a right to increase its participating interest by an additional 10% in each of the Dharoor and Nugaal Blocks. Red Emperor must advise Africa Oil on or before 31 August 2010 if they wish to exercise this option.
June 2010 Acquisition of 80 per cent in Ethiopia's South Omo block from Agriterra (ex-White Nile)
http://cnrp.marketwire.com/client/africa_oil/release.jsp?actionFor=1277701&releaseSeq=0&year=2010
VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 17, 2010) - Africa Oil Corp. ("Africa Oil" or "the Company") (TSX VENTURE:AOI) is pleased to announce that it has signed a Farmout Agreement and Joint Venture Agreement with Agriterra Ltd. (formerly White Nile Ltd.) to acquire an 80% participating interest and operatorship of the South Omo Block in Ethiopia.
South Omo represents a new opportunity for Africa Oil to secure a highly prospective block in the Omo Rift Valley of south-western Ethiopia. The block spans 29,465 square kilometres and is within the Tertiary age East African Rift, just north of Lake Turkana, Kenya and within the same petroleum system as the Company's Kenya Block 10BB and Tullow's Uganda discoveries. Please see attached map, .
Pursuant to the Farmout Agreement, to earn its 80% participating interest, Africa Oil would pay 80% of past costs incurred by Agriterra, to a maximum of US$2,517,000, and fund 100% of the costs associated with a work program comprised of 500 kilometres of 2D seismic, a field geology program, and a surface geochemistry program. Total cost exposure for this work program is estimated at $6.5 MM USD with the majority of these costs to be incurred in the first half of 2011.