Africa Oil PROVIDES OPERATIONS UPDATE
February 12, 2014 (AOI–TSXV, AOI–NASDAQ OMX First North) … Africa Oil Corp. (“Africa Oil” or the “Company”) is pleased to provide the following update on its activities in Kenya and Ethiopia. Africa Oil’s work program for 2014 will include at least 20 exploration and appraisal wells, extended well tests on the South Lokichar basin discoveries, and will include exploration wells targeting four new basins.
Excellent progress continues with the exploration and appraisal program in the South Lokichar basin in Northern Kenya which is the site of seven consecutive significant oil discoveries by Africa Oil in conjunction with its 50% partner and Operator, Tullow Oil plc (“Tullow”). Currently three drilling rigs and a test rig are operating in the South Lokichar basin.
Well testing at Etuko-1 from five identified Lokhone pay intervals confirmed the previously announced discovery. Light 36 degree API waxy crude oil was successfully flowed from three zones at a combined average rate of over 550 barrels of oil equivalent per day. Additional potential pay zones with good oil shows were identified in good quality Auwerwer sandstones over a 200 metre interval shallow in the Etuko-1 well but were not able to be evaluated due to a large hole size. The rig was skidded over and will now drill a 650 metre well to evaluate and potentially test this upper reservoir section.
The rig that recently completed drilling the Amosing discovery has mobilized to the Emong prospect and spud the well on 5 February 2014. Emong-1 is located 6 kilometres to the west of Ngamia-1 and is targeting high quality Auwerwer sandstones. The prospect is fault offset and updip from the large Ngamia oil discovery which has over 200 metres of net oil pay. The gross best estimate of prospective resources for Emong are 242 million barrels of oil based on a third-party independent resource assessment. The well has a planned total depth of 1,500 metres and is expected to take 40 days to drill.
The rig that recently completed drilling the Ewoi discovery has mobilized to drill the first of three planned back-to-back appraisal wells at the large Twiga South oil discovery. Twiga South-2 which will spud mid-February 2014, is located 2 kilometres to the west of the Twiga South-1 discovery well and is updip on the structure. The well is designed to assess the areal extent of the high quality Auwerwer net pay encountered in the discovery well and also the prospective resources associated with up to 150 metres of shallower water bearing high quality Auwerwer net sands encountered at Twiga South-1 that are within mapped closure at this location. The Twiga South gross best estimate of unrisked prospective resources for the discovery are 132 million barrels of oil based on a third-party independent resource assessment. The well has a planned total depth of 2,000 metres and is expected to take 45 days to drill. An extended well test of the Twiga South field is being planned for towards the end of the year.
A light well testing and completions rig has been mobilized and has commenced testing operations on the Ekales oil discovery. Testing operations on Ekales-1 are expected to be complete by end March 2014.
A large 3D seismic survey over the western flank of the South Lokichar basin has commenced and civils construction on several exploration and appraisal locations is being progressed to keep pace with the aggressive drilling program.
Given the significant contingent resources associated with discoveries to date and the extensive exploration, appraisal and seismic program planned to fully assess the upside of the South Lokichar basin, the Company and its partner and Operator, Tullow, has agreed with the Government of Kenya to commence development studies. In addition, the partnership is involved in a comprehensive pre-FEED study for an export pipeline. The current ambition of the Government of Kenya and the joint venture partnership is to reach project sanction for development, including an export pipeline, in the period 2015/2016. If further exploration success opens additional basins there will be scope for the development to be expanded.
The Sala-1 well in Kenya Block 9 will spud mid-February 2014 and Africa Oil will operate this well on behalf of its 50% joint venture partner Marathon Oil Corporation. The prospect is a large three way dip closed structure against the rift bounding fault in the Cretaceous Anza rift in a similar structural setting to the Tertiary Ngamia discovery in Block 10BB. Sala is updip from the Bogal-1 well drilled in 2010 which appeared to find a significant gas accumulation and also near the Ndovu-1 well drilled in 1988 which had significant shows of oil and gas. The unrisked prospective resources for Sala are approximately 400 million barrels of recoverable oil based on a third-party independent resource assessment. The well has a planned total depth of 3,450 metres and is expected to complete by end April 2014. Additionally, preparations are being made for drilling in the South Kerio and West Turkana basins later in the year exposing the Company to multiple potential basin opening wells in Kenya.
In the South Omo Block in Ethiopia the rig is currently moving to the previously undrilled Chew Bahir basin, to drill the Shimela prospect in the eastern portion of the block where new seismic has delineated a number of exciting new prospects, some of which have encouraging seismic amplitude anomalies that map with closure. The well is expected to spud at the end of the first quarter of 2014 with the aim of derisking some further 15 prospects and leads across the basin. The Company has a 30% interest in the block which is operated by Tullow with a 50% interest and Marathon Oil holding the remaining 20% interest.
In Block 8 in Ethiopia, drilling continues on the El Kuran-3 well with the current depth being 2,850 metres. The well encountered a 1,200 metre section of Jurassic Hamanlei carbonates, with wet gas and oil shows throughout the interval, similar to the El Kuran-1 well drilled in 1972. The reservoirs are low porosity and permeability and will require acid or fracture stimulation to produce at commercial levels. A decision was taken to deepen the well to the below the planned target depth to evaluate the deeper Gumboro zone which has significant gas condensate potential. The revised total depth of the well is 3,500 metres and is expected to be complete in April. The Company has a 30% interest in the block which is operated by NewAge.
Keith Hill, President and CEO of Africa Oil commented, “We have a very exciting exploration and appraisal program set out for 2014 which will see us complete over 20 wells. Currently we have seven rigs running and after releasing one in mid-year will have six rigs running full time through the remainder of the year. Our program has three objectives, to appraise the existing key discoveries, to drill out the remaining prospects in the South Lokichar basin and to open at least one of the four new basins being tested along trend. Additionally, we are pushing hard to move the development studies along with the aim of sanctioning a pipeline development for the South Lokichar basin in the period 2015/2016. This fully funded program should continue to deliver high potential upside value for shareholders through this year and beyond.”
February 12, 2014 (AOI–TSXV, AOI–NASDAQ OMX First North) … Africa Oil Corp. (“Africa Oil” or the “Company”) is pleased to provide the following update on its activities in Kenya and Ethiopia. Africa Oil’s work program for 2014 will include at least 20 exploration and appraisal wells, extended well tests on the South Lokichar basin discoveries, and will include exploration wells targeting four new basins.
Excellent progress continues with the exploration and appraisal program in the South Lokichar basin in Northern Kenya which is the site of seven consecutive significant oil discoveries by Africa Oil in conjunction with its 50% partner and Operator, Tullow Oil plc (“Tullow”). Currently three drilling rigs and a test rig are operating in the South Lokichar basin.
Well testing at Etuko-1 from five identified Lokhone pay intervals confirmed the previously announced discovery. Light 36 degree API waxy crude oil was successfully flowed from three zones at a combined average rate of over 550 barrels of oil equivalent per day. Additional potential pay zones with good oil shows were identified in good quality Auwerwer sandstones over a 200 metre interval shallow in the Etuko-1 well but were not able to be evaluated due to a large hole size. The rig was skidded over and will now drill a 650 metre well to evaluate and potentially test this upper reservoir section.
The rig that recently completed drilling the Amosing discovery has mobilized to the Emong prospect and spud the well on 5 February 2014. Emong-1 is located 6 kilometres to the west of Ngamia-1 and is targeting high quality Auwerwer sandstones. The prospect is fault offset and updip from the large Ngamia oil discovery which has over 200 metres of net oil pay. The gross best estimate of prospective resources for Emong are 242 million barrels of oil based on a third-party independent resource assessment. The well has a planned total depth of 1,500 metres and is expected to take 40 days to drill.
The rig that recently completed drilling the Ewoi discovery has mobilized to drill the first of three planned back-to-back appraisal wells at the large Twiga South oil discovery. Twiga South-2 which will spud mid-February 2014, is located 2 kilometres to the west of the Twiga South-1 discovery well and is updip on the structure. The well is designed to assess the areal extent of the high quality Auwerwer net pay encountered in the discovery well and also the prospective resources associated with up to 150 metres of shallower water bearing high quality Auwerwer net sands encountered at Twiga South-1 that are within mapped closure at this location. The Twiga South gross best estimate of unrisked prospective resources for the discovery are 132 million barrels of oil based on a third-party independent resource assessment. The well has a planned total depth of 2,000 metres and is expected to take 45 days to drill. An extended well test of the Twiga South field is being planned for towards the end of the year.
A light well testing and completions rig has been mobilized and has commenced testing operations on the Ekales oil discovery. Testing operations on Ekales-1 are expected to be complete by end March 2014.
A large 3D seismic survey over the western flank of the South Lokichar basin has commenced and civils construction on several exploration and appraisal locations is being progressed to keep pace with the aggressive drilling program.
Given the significant contingent resources associated with discoveries to date and the extensive exploration, appraisal and seismic program planned to fully assess the upside of the South Lokichar basin, the Company and its partner and Operator, Tullow, has agreed with the Government of Kenya to commence development studies. In addition, the partnership is involved in a comprehensive pre-FEED study for an export pipeline. The current ambition of the Government of Kenya and the joint venture partnership is to reach project sanction for development, including an export pipeline, in the period 2015/2016. If further exploration success opens additional basins there will be scope for the development to be expanded.
The Sala-1 well in Kenya Block 9 will spud mid-February 2014 and Africa Oil will operate this well on behalf of its 50% joint venture partner Marathon Oil Corporation. The prospect is a large three way dip closed structure against the rift bounding fault in the Cretaceous Anza rift in a similar structural setting to the Tertiary Ngamia discovery in Block 10BB. Sala is updip from the Bogal-1 well drilled in 2010 which appeared to find a significant gas accumulation and also near the Ndovu-1 well drilled in 1988 which had significant shows of oil and gas. The unrisked prospective resources for Sala are approximately 400 million barrels of recoverable oil based on a third-party independent resource assessment. The well has a planned total depth of 3,450 metres and is expected to complete by end April 2014. Additionally, preparations are being made for drilling in the South Kerio and West Turkana basins later in the year exposing the Company to multiple potential basin opening wells in Kenya.
In the South Omo Block in Ethiopia the rig is currently moving to the previously undrilled Chew Bahir basin, to drill the Shimela prospect in the eastern portion of the block where new seismic has delineated a number of exciting new prospects, some of which have encouraging seismic amplitude anomalies that map with closure. The well is expected to spud at the end of the first quarter of 2014 with the aim of derisking some further 15 prospects and leads across the basin. The Company has a 30% interest in the block which is operated by Tullow with a 50% interest and Marathon Oil holding the remaining 20% interest.
In Block 8 in Ethiopia, drilling continues on the El Kuran-3 well with the current depth being 2,850 metres. The well encountered a 1,200 metre section of Jurassic Hamanlei carbonates, with wet gas and oil shows throughout the interval, similar to the El Kuran-1 well drilled in 1972. The reservoirs are low porosity and permeability and will require acid or fracture stimulation to produce at commercial levels. A decision was taken to deepen the well to the below the planned target depth to evaluate the deeper Gumboro zone which has significant gas condensate potential. The revised total depth of the well is 3,500 metres and is expected to be complete in April. The Company has a 30% interest in the block which is operated by NewAge.
Keith Hill, President and CEO of Africa Oil commented, “We have a very exciting exploration and appraisal program set out for 2014 which will see us complete over 20 wells. Currently we have seven rigs running and after releasing one in mid-year will have six rigs running full time through the remainder of the year. Our program has three objectives, to appraise the existing key discoveries, to drill out the remaining prospects in the South Lokichar basin and to open at least one of the four new basins being tested along trend. Additionally, we are pushing hard to move the development studies along with the aim of sanctioning a pipeline development for the South Lokichar basin in the period 2015/2016. This fully funded program should continue to deliver high potential upside value for shareholders through this year and beyond.”
