VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 24, 2011) - Africa Oil Corp. ("Africa Oil" or the "Company") (TSX VENTURE:AOI)(OMX:AOI) is pleased to announce that Africa Oil, together with its joint venture partner, Lion Energy Corp. ("Lion"), has entered into the First Additional Exploration Phase under the Block 9 Production Sharing Contract Agreement ("PSC") in Kenya. As a result of the withdrawal of its two other joint venture partners, Africa Oil will now hold a 66.7% working interest in the PSC and has been approved by the government as Operator of Block 9. Lion will hold the remaining 33.3%. As a condition of entering the First Additional Exploration Phase, 25% of the original contract area will be relinquished. The First Additional Exploration Phase commenced on December 31, 2010 and will expire on December 31, 2013 with a one well work commitment (minimum depth 1,500 meters).
During the previous exploration period, the joint venture partners drilled one well to a depth of 5,085 metres and discovered a potentially large gas accumulation. Gas shows and petrophysical analysis of wireline logs indicated multiple gas pay zones totaling approximately 91 meters in Lower Cretaceous sandstones. Preliminary testing on two of these potential gas pay zones was undertaken, with only minimal flow of gas from each zone. Analysis of the test results indicates that neither test was in communication with the extensive fracture network proven by the abundant fluid losses during drilling and the Formation Micro Imaging (FMI) log. The well was plugged and an additional testing program, which may include fracture and acid stimulation, is being considered to assess the production potential of these reservoirs. Studies on commercialization of this gas, including possible gas to power or small scale LNG projects will be conducted in parallel to the possible testing program.
In addition, the northwestern portion of the Block contains the Kaisut Basin which is an extension of the Anza Basin oil play currently being pursued by Africa Oil and its joint venture partners in Block 10A. Several large leads have been identified in this area on existing 2D seismic data and a 500 to 700 kilometer seismic survey is being planned for later this year aimed at upgrading these leads into drillable prospects.
Africa Oil President and CEO Keith Hill commented, "We are very pleased to assume majority interest and operatorship of this large and highly prospective block in the Anza rift trend. With the possible existing gas discovery and the upside of a highly prospective oil play, we see this block complementing our existing East African rift basin exploration portfolio."
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 in what is considered a truly world-class exploration play fairway. The Company's total gross land package in this prolific region is in excess of 350,000 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 major Tullow Albert Graben oil discovery in neighbouring Uganda. Similar to the Albert Graben play model, Africa Oil's concessions have older wells, a legacy database, and host numerous oil seeps indicating a proven petroleum system. Good quality existing seismic 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 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.
ON BEHALF OF THE BOARD
Keith C. Hill, President and CEO
Africa Oil's Certified Advisor on First North is E. Öhman J:or Fondkommission AB.
Contact Information: Africa Oil Corp.
Sophia Shane
Corporate Development
(604) 689-7842