April 30, 2015 (AOI-TSX, AOI-Nasdaq Stockholm) … Africa Oil Corp. (“Africa Oil” or the “Company) is pleased to provide the following update on the appraisal program in the South Lokichar Basin.
In Kenya, the extensive appraisal program in the South Lokichar Basin continues. The Amosing -1 and Amosing -2 wells have been completed in five zones with hydraulically controlled completions that permit independent tests of selected intervals without well intervention in preparation for an Extended Well Test (EWT) of the field. Initial rig-less flow testing during clean-up at a combined maximum rate of 5,600 and 6,000 bopd respectively exceeded expectations, demonstrating high quality reservoir sands which flowed 31 to 38 degree API dry oil under natural conditions. The EWT involves production and water injection testing to enable dynamic flow characterisation between wells in the Amosing stacked oil reservoirs. The full EWT will commence shortly and results are expected over the next few months. The Amosing-4 appraisal well was drilled on the flank of the field and successfully encountered 27 metres of net oil pay in thick upper reservoir zones proving the significant down-dip extent of the field.
Elsewhere in the Lokichar basin, the Ekales-2 appraisal well reached a total depth of 4,059 metres and encountered an estimated 60-100 metres of net oil pay in the primary shallower objectives. This highly deviated well was also deepened to test the basin centre stratigraphic play where it intersected sandstones with elevated pressures and 50 metres of oil bearing sands, however operating conditions precluded logging and confirmation of any oil pay in this section. This was the first test of this exploration target and is very positive for the future upside potential of the South Lokichar basin above the significant oil resources already discovered.
The Ngamia-7 appraisal well was drilled to test the Ngamia oil field’s eastern flank and encountered up to 130 metres of net oil pay, expanding the proven extent of the field. The Ngamia-8 appraisal was drilled and encountered up to 200 metres of net oil pay in line with pre-drill expectations. The well was positioned in the centre of the Ngamia structure and static pressure data indicates the well is in pressure communication with the oil discovered in the neighbouring Ngamia-1A, Ngamia-3, Ngamia-5, Ngamia-6 and Ngamia-7 wells. Ngamia -8 will be completed as part of the Ngamia field EWT planned for mid-year which will also include the Ngamia-3 and Ngamia-6 wells.
The extensive appraisal activities in Kenya, including the planned EWT, along with the development concept studies completed in 2014 will enable a draft Field Development Plan (FDP) to be prepared by end 2015. The current ambition of the joint venture partnership is to position the East Africa project, which will include the development of South Lokichar and Tullow’s Lake Albert resources 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, a joint technical adviser was appointed in late 2014. The independent technical studies being undertaken by the adviser, with extensive support from the Kenya and Uganda upstream partners, are progressing rapidly and should assist in the finalisation of the pipeline route.
Africa Oil owns a 50% working interest in Kenya Blocks 1BB and 13T with Operator Tullow Oil holding the remaining 50%.
Keith Hill, President and CEO, commented, “We continue to be highly encouraged by the appraisal program in the Lokichar Basin which is above our expectations and confirms our belief that this is a world-class asset. We are working closely with our partners and the Kenyan Government to move the development project forward, particularly the export pipeline, which is the key to unlocking the value of this asset. The 3D seismic has been a great help in imaging new drilling targets in the basin and we plan to drill some high impact wells with the potential to add significant resources in the coming months.“
About Africa Oil Corp.
Africa Oil Corp. is a Canadian oil and gas company with assets in Kenya and Ethiopia as well as Puntland (Somalia) through its equity interest in Africa Energy Corp. The Company is listed on the Toronto Stock Exchange and on Nasdaq 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.
Cautionary Statements regarding Well Test Results
Drill stem tests are commonly based on flow periods of 1 to 5 days and build up periods of 1 to 3 days. Pressure transient analysis has not been carried out on all well tests and the results should therefore be considered as preliminary. Well test results are not necessarily indicative of long-term performance or of ultimate recovery.
ON BEHALF OF THE BOARD
“Keith C. Hill”
President and CEO
For further information, please contact: Sophia Shane, Corporate Development (604) 689-7842.
