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Africa Oil Announces 557% Increase in Estimates of Contingent Resources in the South Lokichar Basin in Kenya and a Significant

Africa Oil Announces 557% Increase in Estimates of Contingent Resources in the 
South Lokichar Basin in Kenya and a Significant
Increase in Risked Prospective Resources 
VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 09/03/13 -- Africa
Oil Corp. ("Africa Oil", "AOC", or "the Company") (TSX
VENTURE:AOI)(OMX:AOI) is pleased to announce that an updated
independent assessment of the Company's contingent and prospective
resources on its Kenyan and Ethiopian exploration properties has been
completed by Gaffney, Cline & Associates ("Gaffney Cline", or "GCA").
The independent assessment was carried out in accordance with the
standards established by the Canadian Securities Administrators in
National Instrument 51-101 Standards of Disclosure for Oil and Gas
Activities. The effective date of the report is July 31, 2013. 
It should be noted that these estimates do not include the Company's
Puntland (Somalia) oil and gas interests which is available at
www.sedar.com under Horn Petroleum Corporation, Africa Oil's 45%
owned subsidiary.  
Given the large quantity of prospects and leads in the Company's
portfolio, the following three tables have been prepared for the
convenience of readers by Africa Oil. Readers should refer to the
tables attached to this News Release, which have been prepared by
Gaffney Cline, detailing the contingent oil resources and prospective
oil and gas resources by prospect and lead with the associated
geological chance of success:  


 
---------------------------------------------------------------------
Summary of Contingent Oil Resources(1) as of July 31, 2013           
---------------------------------------------------------------------
                             GROSS Best            AOC       NET Best
                          (2C) Estimate        Working  (2C) Estimate
Country     Licence             (MMbbl)   Interest (%)        (MMbbl)
---------------------------------------------------------------------
Kenya       Block 10BB              280            50%            140
            ---------------------------------------------------------
            Block 13T                87            50%             44
---------------------------------------------------------------------
Ethiopia    Block 7/8(2)            155            30%             47
---------------------------------------------------------------------
                                                                            
Notes:                                                                      
1. This summation of resources has been prepared for convenience by the     
Company and not by Gaffney Cline & Associates.                              
2. Gross best estimate (2C) contingent gas resources of 106 BCF (32 BCF Net)
not included in table for Blocks 7/8.                                       
                                                                            
------------------------------------------------------------------------
Summary of Prospective Oil Resources(1) as of July 31, 2013             
------------------------------------------------------------------------
                            UNRISKED                UNRISKED   RISKED(2)
                        ------------------------------------------------
                                                                     NET
                               GROSS         AOC         NET        Best
                                Best     Working        Best    Estimate
                            Estimate    Interest    Estimate    (Risked)
Country     Licence          (MMbbl)         (%)     (MMbbl)     (MMbbl)
------------------------------------------------------------------------
Kenya       Block 9            1,598         50%         799          96
            ------------------------------------------------------------
            Block 10A            376         30%         113          14
            ------------------------------------------------------------
            Block 10BA         9,836         50%       4,918         374
            ------------------------------------------------------------
            Block 10BB         2,364         50%       1,182         302
            ------------------------------------------------------------
            Block 12A          3,779         20%         756          38
            ------------------------------------------------------------
            Block 13T          2,174         50%       1,087         382
------------------------------------------------------------------------
Ethiopia    South Omo          2,641         30%         792          88
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
Summary of Prospective Gas Resources(1  )as of July 31, 2013            
------------------------------------------------------------------------
                            UNRISKED                UNRISKED   RISKED(2)
                        ------------------------------------------------
                                                                     NET
                               GROSS         AOC         NET        Best
                                Best     Working        Best    Estimate
                            Estimate    Interest    Estimate    (Risked)
Country     Licence            (BCF)         (%)       (BCF)       (BCF)
------------------------------------------------------------------------
Kenya       Block 9            1,880         50%         940         376
            ------------------------------------------------------------
            Block 10A            360         30%         108          38
------------------------------------------------------------------------
Notes:                                                                      
1. This summation of resources has been prepared for convenience by the     
Company and not by Gaffney, Cline & Associates.                             
2. Risked resources have been calculated and summed by the company after    
risking prospects and leads individually. Geological Chance of success      
(GCOS) varies with each prospect or lead.                                   

 
Keith Hill, Africa Oil's President and Chief Executive Officer,
commented: "Gaffney Cline's independent assessment confirms a
significant increase to contingent and risked prospective resources
in the Tertiary rift basins in Kenya and Ethiopia. Based on the
drilling and testing program over the past year we have confirmed the
South Lokichar Basin contains gross contingent resources of 368
million barrels of oil, an increase of 557%. In addition gross risked
prospective resources of 1,213 million barrels of oil are estimated
for the South Lokichar Basin. This level of resource exceeds the
threshold for development and development studies have commenced. We
continue to aggressively explore with three seismic crews active and
are ramping up drilling activity with plans to have a total of six
rigs (four operated by Tullow Oil) operating in the fourth quarter of
2013. We expect the next 18 months to be transformational as we
drill-out the prolific South Lokichar Basin and open up a number of
highly prospective basins on the Tertiary rift trend." 
Africa Oil's holdings include working interests in operated and
non-operated Production Sharing Contracts (PSC's) in Kenya, Ethiopia
and Puntland (Somalia) in East Africa. These Blocks contain
relatively under explored plays in basins that have proven and
productive analogs. Since the effective date (June 30, 2012) of
Gaffney Cline's previous evaluation of prospective resources,
highlights of the Company's exploration activities in Kenya and
Ethiopia include: 


 
--  Drilling and testing the Twiga South-1 well in Block 13T (Kenya)
    resulting in an additional oil discovery and demonstrating high quality
    Auwerwer sands containing light waxy sweet oil. 
--  Production testing the Ngamia-1A discovery in Block 10BB (Kenya) which
    significantly increased the assessment of net oil pay encountered by the
    well; 
--  Drilling the Etuko-1 well in Block 10BB (Kenya) resulting in an
    additional oil discovery. 
--  As a result of these additional South Lokichar Basin discoveries,
    several prospects and leads in the Tertiary rift have been de-risked and
    the volume of contingent oil resources has increased; 
--  Drilling the Paipai-1 well in Block 10A (Kenya) demonstrating a working
    petroleum system in the Anza Basin; 
--  Drilling the Sabisa-1 well in the South Omo Block (Ethiopia)
    demonstrating a working petroleum system in the South Omo Basin; 
--  The acquisition of approximately 5,000 km of 2D seismic, increasing the
    number of mapped prospects and leads; 

 
Please refer to the tables below detailing the Company's contingent
oil resources and prospective oil and gas resources by prospect and
lead as provided by Gaffney Cline effective July 31st, 2013. 
To view Tables 1-12, click on the following link:
http://media3.marketwire.com/docs/895788t.pdf 
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 within a world-class exploration play fairway with a
total gross land package in this prolific region in excess of 250,000
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 Albert Graben oil discoveries in neighboring
Uganda. Africa Oil's recent Ngamia-1A, Twiga South-1 and Etuko-1
discoveries extend the Albert Graben play into Kenya where Africa
Oil, along with partners Tullow and Marathon, hold a dominant acreage
position. Newly acquired seismic and gravity data 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 constitutes
"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 Hill, President and CEO 
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. 
BASIS OF OPINION 
This document reflects GCA's informed professional judgment based on
accepted standards of professional investigation and, as applicable,
the data and information provided by the Client and/or obtained from
other sources e.g. public domain, the limited scope of engagement,
and the time permitted to conduct the evaluation.  
In line with those accepted standards, this document does not in any
way constitute or make a guarantee or prediction of results, and no
warranty is implied or expressed that actual outcome will conform to
the outcomes presented herein. GCA has not independently verified any
information provided by or at the direction of the Client and/or
obtained from other sources e.g. public domain, and has accepted the
accuracy and completeness of these data. GCA has no reason to believe
that any material facts have been withheld from it, but does not
warrant that its inquiries have revealed all of the matters that a
more extensive examination might otherwise disclose.  
The opinions expressed herein are subject to and fully qualified by
the generally accepted uncertainties associated with the
interpretation of geoscience and engineering data and do not reflect
the totality of circumstances, scenarios and information that could
potentially affect decisions made by the report's recipients and/or
actual results. The opinions and statements contained in this report
are made in good faith and in the belief that such opinions and
statements are representative of prevailing physical and economic
circumstances.  
This assessment has been conducted within the context of GCA's
understanding of the effects of petroleum legislation and other
regulations that currently apply to these properties. However, GCA is
not in a position to attest to property title or rights, conditions
of these rights including environmental and abandonment obligations,
and any necessary licenses and consents including planning
permission, financial interest relationships or encumbrances thereon
for any part of the appraised properties.  
In carrying out this study, GCA is not aware that any conflict of
interest has existed. As an independent consultancy, GCA is providing
impartial technical, commercial and strategic advice within the
energy sector. GCA's remuneration was not in any way contingent on
the contents of this report. In the preparation of this document, GCA
has maintained, and continues to maintain, a strict independent
consultant-client relationship with the Client. Furthermore, the
management and employees of GCA have no interest in any of the assets
evaluated or related with the analysis carried out as part of this
report.  
Staff members who prepared this report are professionally-qualified
with appropriate educational qualifications and levels of experience
and expertise to perform the scope of work set out in the Proposal
for Services.  
This report has been prepared in accordance with GCA's understanding
of the requirements of Canadian National Instrument 51-101. In this
context GCA has followed the Canadian Oil and Gas Evaluation Handbook
(COGEH); a copy of Chapter 5 of COGEH is attached hereto as Appendix
I. 
There are numerous uncertainties inherent in estimating reserves and
resources, and in projecting future production, development
expenditures, operating expenses and cash flows. Oil and gas reserve
engineering and resource assessment must be recognized as a
subjective process of estimating subsurface accumulations of oil and
gas that cannot be measured in an exact way. Estimates of oil and gas
reserves or resources prepared by other parties may differ, perhaps
materially, from those contained within this report. The accuracy of
any reserve estimate is a function of the quality of the available
data and of engineering and geological interpretation. Results of
drilling, testing and production that post-date the preparation of
the estimates may justify revisions, some or all of which may be
material. Accordingly, reserve estimates are often different from the
quantities of oil and gas that are ultimately recovered, and the
timing and cost of those volumes that are recovered may vary from
that assumed. 
Oil and condensate volumes appearing in this report have been quoted
at stock tank conditions. Typically these volumes have been referred
to in million barrel increments (MMstb). Natural gas volumes have
been quoted in billions of standard cubic feet (Bscf). Standard
conditions are defined as 14.696 psia and 60o Fahrenheit. 
It is GCA's opinion that the estimates of total remaining recoverable
hydrocarbon liquid and gas volumes at 31st July, 2013, are, in the
aggregate, reasonable and the resources classification and
categorization is appropriate and consistent with the definitions and
guidelines and resources. 
CONTINGENT AND PROSPECTIVE RESOURCES 
Contingent Resources are those quantities of petroleum estimated, as
of a given date, to be potentially recoverable from known
accumulations, but the applied project(s) are not yet considered
mature enough for commercial development due to one or more
contingencies. Contingent Resources may include, for example,
projects for which there are currently no evident viable markets, or
where commercial recovery is dependent on technology under
development, or where evaluation of the accumulation is insufficient
to clearly assess commerciality. Contingent Resources are further
categorized in accordance with the level of certainty associated with
the estimates and may be sub- classified based on project maturity
and/or characterized by their economic status. 
It must be appreciated that the Contingent Resources reported herein
are unrisked in terms of economic uncertainty and commerciality. 


 
--  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. 

 
There is no certainty that it will be commercially viable to produce
any portion of the Contingent Resources. 
Prospective Resources are those quantities of petroleum that are
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. 
There is no certainty that any portion of the Prospective Resources
will be discovered. If discovered, there is no certainty that it will
be commercially viable to produce any portion of the resources. 
Prospective Resources include Prospects and Leads. Prospects are
features that have been sufficiently well defined, on the basis of
geological and geophysical data, to the point that they are
considered drillable. Leads, on the other hand, are not sufficiently
well defined to be drillable, and need further work and/or data. In
general, leads are significantly more risky than prospects and
therefore are not suitable for explicit quantification. 
Prospective Resource volumes are presented as unrisked. It must be
appreciated that Prospective Resources are risk assessed only in the
context of applying the stated 'Geological Chance of Success', a
percentage which pertains to the percentage probability of achieving
the status of a Contingent Resource (where the Geological Chance of
Success is unity). This dimension of risk assessment does not
incorporate the considerations of economic uncertainty and
commerciality. 
GCA is an energy consultancy specializing in independent petroleum
advice on resource evaluation and economic analysis. In preparation
of this report, GCA has maintained, and continues to maintain, a
strict consultant - client relationship with AOC. The management and
employees of GCA have been and continue to be, independent of AOC in
the services they provide to the company including the provision of
the opinion expressed in this report. Furthermore the management and
employees of GCA have no interest in any assets or share capital of
AOC or in the promotion of the company. 
Opinions concerning sub-surface petroleum resources are associated
with considerable uncertainty and represent best estimates based on
the data available at the time the opinion is given. The acquisition
of new data in the future and/or variations in economic circumstances
and market forces may result in significant upward or downward
movements in revised total resource estimates. 
RISKS AND CAUTIONARY STATEMENTS 
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 most 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 by GCA 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. 
Risk Associated with the Classifications: 
Substantial Capital Requirements: 
Africa Oil expects to make substantial capital expenditures for
exploration, development and production of oil and gas reserves in
the future. The Company'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 the Company's
financial condition, results of operations and prospects. 
Ability to Execute Exploration and Development Program: 
It may not always be possible for Africa Oil to execute its
exploration and development strategies in the manner in which the
Company considers optimal. Execution of exploration and development
strategies is dependent upon the political and security climate in
the host countries where the Company operates. The Company's
exploration and development programs in East Africa 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. 
Absence of a Formal Development Plan including Required Funding: 
There is no certainty the Company will prepare and approve a
development plan for any portion of the contingent resources or that
the Company will be successful in funding any development should such
a plan be prepared. General market conditions, the sufficiency of
such a development plan and the outlook regarding oil and gas prices
are some factors that will influence the availability of funding. 
Access to Infrastructure: 
Africa Oil's ability to produce and market hydrocarbons from any
potential discoveries will depend on its ability to access suitable
infrastructure. The Company 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 has not yet been developed. Africa Oil
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 and
contingent 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 activities.
Contacts:
Africa Oil Corp.
Sophia Shane
Corporate Development
(604) 689-7842
(604) 689-4250 (FAX)
africaoilcorp@namdo.com
www.africaoilcorp.com
 
 
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