Africa Oil Announces New Gas Discovery at Sala Prospect in Block 9 in Kenya
NEWS RELEASE TRANSMITTED BY Marketwired
FOR: Africa Oil Corp.
TSX SYMBOL: AOI
OMX SYMBOL: AOI
JUNE 24, 2014
Africa Oil Announces New Gas Discovery at Sala Prospect in Block 9 in Kenya
VANCOUVER, BRITISH COLUMBIA--(Marketwired - June 24, 2014) - Africa Oil Corp.
(TSX:AOI)(OMX:AOI) ("Africa Oil" or the "Company") is
pleased to announce it has made a gas discovery in Block 9 onshore Kenya. The
Sala-1 drilled a large 80 square kilometer anticlinal feature along the
northern basin bounding fault in the Cretaceous Anza graben and encountered
several sandstone intervals which had oil and gas shows. The well was drilled
to a total depth of 3030 meters and petrophysical analysis indicated three
zones of interest over a 1000 meter gross interval which were subsequently
drill stem tested. An upper gas bearing interval tested dry gas at a maximum
rate of 6 mmcf/d from a 25 meter net pay interval. The interval had net
reservoir sand of over 125 meters and encountered a gas water contact so there
is potential to drill up-dip on the structure where this entire interval will
be above the gas-water contact. A lower interval tested at low rates of dry gas
from a 50m potential net pay interval which can also be accessed at the up-dip
location. It should also be noted that there were oil shows while drilling and
small amounts of oil were recovered during drilling and testing which indicates
there may be potential for oil down-dip on the structure. Africa Oil is the
Operator of Block 9 with a 50% working interest. Marathon Oil Kenya Limited
B.V. has the remaining 50% interest.
An appraisal plan to follow up this discovery is currently being evaluated by
the partnership in consultation with the Kenyan government. Plans being
discussed include an up-dip location to confirm the areal extent of the gas
zones tested where the full net sand interval can be intersected above the
gas-water contact. The partnership is also considering a down-dip appraisal
location to test an on-lapping stratigraphic wedge on the flanks of the
structure which is of the same age as the zones in the nearby Ndovu-1 well
which had oil and gas shows.
In addition, the Company is considering drilling an appraisal well on the crest
of the large Bogal structure to confirm this large potential gas discovery
which has closure over an area of up to 200 square kilometers. The gross best
estimate of prospective resources for Bogal are 1.8 trillion cubic feet of gas
based on a third-party independent resource assessment. The Company currently
has two optional slots on the Great Wall drilling rig used to drill the Sala-1
well that are available for this appraisal program.
The Company believes there is a very strong market for gas development in Kenya
and have already engaged in discussions with power companies and the government
to potentially fast track a gas to power project that could add significant
value and create benefits for the people of Kenya. In 2013 the Government of
Kenya launched its "+5000 MW by 2016 - Power to transform Kenya"
initiative with ambitious plans to increase Kenya's power generating
capacity by 5,000 Mega Watts in 40 months. This plan includes significant
generating capacity fuelled by imported LNG and coal which are currently being
bid. The discovery of indigenous gas in significant quantities in Block 9 has
the potential to offer a far more cost effective fuel source for these power
projects that will also provide positive environmental and local development
benefits. Significant interest exists with development agencies and commercial
independent power producers to partner on power developments in Kenya.
Africa Oil CEO Keith Hill stated, "We are very excited about the opening a
new basin and the possibilities of bringing significant value to the Company by
our Block 9 discovery. Not only is there a great need for power in Kenya, there
is also the potential for downdip oil and for additional prospects on trend. We
have a number of leads along this basin bounding fault and additional seismic
data is being considered. We continue to have a very active exploration and
appraisal program in both Kenya and Ethiopia and have made significant progress
in moving the South Turkana pipeline and development program forward in
cooperation with the Kenyan government."
The Company is also pleased to update additional exploration and appraisal
activities in Kenya and Ethiopia.
In Kenya, the Company has 4 additional rigs active in the South Turkana Basin
where oil discoveries have previously been announced at Ngamia, Twiga, Agete,
Amosing, Ekales, Etuko and Ewoi.
The PR Marriott 46 rig has recently completed the Ngamia-2 well which was
drilled 1.7 km from the Ngamia-1 discovery well to test the northwest flank of
the prospect. The well encountered up to 39 meters of net oil pay and 11 meters
of net gas pay and appears to have identified a new fault block trap north of
the main Ngamia accumulation. The reservoirs were high quality with more than
200 meters of net reservoir sands with good permeability inferred from MDT
sampling. The well has been suspended for testing and the rig will continue to
drill up to 4 additional appraisal wells in the Ngamia field area for an
extended well test program. A 3D seismic program is currently being concluded
over the field area which should allow for detailed mapping of the fault
The SMP-5 rig has completed testing operations on the Agete-1 well where it
confirmed the Auwerwer pay previously released, the well flow rate was tested
at 500 barrels of oil per day. This rig is now currently on location at the
Ewoi-1 discovery and is preparing to test, after which it will continue to be
used to test discovery and appraisal wells in this basin.
The Weatherford 804 rig is currently drilling the Agete-2 downdip appraisal
well and will then move to drill the Etom prospect located 7 kilometers north
of the Agete discovery along the basin bounding 'string of pearls'
The Sakson PR-5 rig is drilling ahead on the Amosing-2 downdip appraisal well,
with a planned sidetrack, and will then move to drill the Kodos and Epir
(formerly Aze) prospects, which will be the first exploratory wells to test the
Kerio Basin, located immediately adjacent to the prolific S. Lokichar basin.
Finally, the Exalo 205 rig is drilling ahead on the Gardim prospect, located in
the Chew Bahir basin in the South Omo block in Ethiopia. The partnership is in
discussions on the next prospect to be considered for drilling in this block.
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 45% equity interest in Horn
Petroleum Corporation. 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 215,000 square kilometres. The East African Rift
Basin system is one of the last of the great rift basins to be explored. Seven
new significant discoveries have been announced in the Northern Kenyan basin in
which the Company holds a 50% interest along with operator Tullow Oil plc. The
Company is listed on the Toronto Stock Exchange and on First North at NASDAQ
OMX-Stockholm under the symbol "AOI".
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
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reflect conclusions that are based on certain assumptions that the reserves and
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reflected in those forward-looking statements are reasonable, but no assurance
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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
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changes in oil prices, results of exploration and development activities,
uninsured risks, regulatory changes, defects in title, availability of
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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
ON BEHALF OF THE BOARD
Keith C. Hill, President and CEO
Africa Oil's Certified Advisor on NASDAQ OMX First North is Pareto
FOR FURTHER INFORMATION PLEASE CONTACT:
Africa Oil Corp.
INDUSTRY: Energy and Utilities - Oil and Gas
-0- Jun/24/2014 06:00 GMT
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