Africa Oil discovers Natural Gas in Kenya’s Block 9

Africa Oil has announced 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.

Africa Oil says it 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.

“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,” said Africa Oil CEO Keith Hill.

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.

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