Africa Oil closes $125m private placement

Canadian listed company Africa Oil  has announced that it has closed the US$125,000,000 brokered private placement, previously announced on earlier this month having issued an aggregate of 57,020,270 common shares.

Net proceeds of the private placement will be used for ongoing exploration, appraisal and development activities in East Africa, as well as for corporate development and general working capital purposes.

The placement according to Africa Oil should be sufficient to complete the work required ahead of a field development plan submission for the South Lokichar Basin at the end of 2015.

The funds will be utilitilsed to drill at least four appraisal/exploration wells, extended well tests in the Amosing and Ngamia fields and reservoir and engineering studies (including extensive core analysis).

Africa Oil and Tullow Oil also plan to test deeper exploration upside (Basin Axis Play) with two high risk appraisal wells that are currently being drilled on the Ngamia and Ekales structures which are hoped to add material resource to the existing discoveries.

The two partners are also plan on drilling two basin openers including the Engomo-1 well currently drilling in the West Turkana Basin and which is expected to complete in March 2015 as well as the Cheptuket well (formerly Lekep) in Block 12A situated in the Kerio Valley Basin in line with PSC commitments that needs to be drilled before September 2016.

Other than its acreage in Kenya Africa Oil has licenses in Ethiopia and Puntland through its subsidiary Horn Petroleum.