Africa Oil announces significant increase 2c oil resources in South Lokichar Basin, Kenya

AA – Africa Oil Corp. (“Africa Oil”, “AOC” or the “Company”) (TSX:AOI)(OMX:AOI) is pleased to announce that an independent assessment of the Company’s Contingent Resources in the South Lokichar Basin located in Blocks 10BB and 13T in Kenya has been completed by DeGolyer and MacNaughton Canada Limited (“DMCL”).

The estimated gross 2C unrisked resources in the South Lokichar Basin, Kenya have increased by 150 million barrels (or 24%) to 766 million barrels of oil (Development Pending: 754 million barrels and Development Unclarified: 12 million barrels).

Keith Hill, President and CEO, commented, “DMCL’s independent assessment confirms a significant increase in Contingent Resources for the South Lokichar Basin in Northern Kenya. Based on the continuing drilling and testing program over the past year our best estimate is now that the Company’s discoveries in the South Lokichar Basin contain gross unrisked Contingent Resources of 766 million barrels of oil (2C estimate) (Development Pending: 754 million barrels and Development Unclarified: 12 million barrels), an increase of 24% on previous estimates, and may contain as much as 1.63 billion barrels of gross oil Contingent Resources (3C estimate), an increase of 26%. The level of these resources gives us confidence that we will exceed the threshold required for development and we continue to push forward for development sanction during 2017.”

Project Description

AOC and its JV partners have completed a substantial exploration and appraisal program across eight discoveries within the South Lokichar Basin, northwest Kenya. The high quality sweet, waxy crude is reservoired in the fluvial and lacustrine sands of the Auwerwer and Lokone reservoirs. The South Lokichar Basin fields have been subject to an extensive data acquisition and analysis program including a large number of production and inter-well interference tests to demonstrate productivity and reservoir connectivity.

Pre-FEED engineering studies have been completed on the production facilities and crude oil pipeline export route. The main fields of the South Lokichar Basin will be developed using wells drilled from multi-well pads and using a secondary recovery waterflood scheme. Given the waxy nature of the reservoir fluids, heated water injection will be required in addition to artificial lift on the production wells to maximize oil recovery efficiency. A heated, insulated export pipeline will be required to transport crude oil to the loading facilities at the port of Lamu.

A draft field development plan was submitted to the Kenyan regulatory authorities in December 2015. An update to the field development plan is expected in 2016 with a target for government development approval and Final Investment Decision (“FID”) in 2017.

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