Africa Oil exploration expenditures in Kenya drop to $146.2 million in 2015

Canadian exploration company Africa Oil says it incurred $146.2 million of intangible exploration expenditures in Kenya for the six months ended June 30, 2015 a drop from $169.5 million in the same period last year.

According to 2015 second quarter financial and operating results the company’s drilling and completion expenditures reached $108.5 million relating to the Epir exploration well (Block 10BB), the Engomo exploration well (Block 10BA), the Ekales exploration well (Block 13T) as well as multiple South Lokichar Basin (Blocks 10BB and 13T) appraisal wells and completions relating to EWTs. The drilling and completion expenditure was $17.3 million lower than in H1 2014.

Africa Oil adds that it spent $19.6 million in the last six months in relation to studies aimed at progressing towards project sanction for the South Lokichar Basin.

Africa Oil adds that it is working closely with Tullow to focus the 2015 work program (multiple appraisal and exploration wells in the discovered basin, EWTs in the Amosing and Ngamia fields and reservoir and engineering studies [including extensive core analysis])) and budget on advancing the discovered basin development in Blocks 10BB and 13T (Kenya) by undertaking activities aimed at increasing resource certainty.

The Joint Venture partners are progressing with development studies with the intent of submitting a FDP around the end of 2015. The duo add that they hope a decision by Governments of Kenya and Uganda to select the pipeline route will enable the joint venture partnerships to move on to the next phases of development with a Government ambition to reach project sanction by the end of 2016.

The Company’s investment in Africa Energy was recorded as an equity investment resulting to a gain for accounting purposes of $4.2 million.Outside Kenya the company spent $361,000 in Ethiopia in relation exploration surveys and studies and PSA and G&A related. Acquisition of 2D seismic work being performed in the Rift Basin Area cost $313,000 for the approximately 600 kilometer land and lake survey.

During the half year the Company completed two private placements including in March 2015 in which 57,020,270 shares were issued for gross proceeds of $125 million while in May the company completed a private placement in which 52,623,377 shares were issued for gross proceeds of $100.0 million.