Africa Oil Corp. has reported that the previously announced farm-out with Maersk Oli and Gas has received approval from the Government of Kenya.
This gives a green light for completion of the farm-out of Blocks 10BB, 13T and 10BA.At completion of the Maersk farmout, the new respective interests in each of Africa Oil’s blocks will be:
|Kenya Block 10BB||Africa Oil – 25%||Maersk – 25%||Tullow – 50%*|
|Kenya Block 13T||Africa Oil – 25%||Maersk – 25%||Tullow – 50%*|
|Kenya Block 10BA||Africa Oil – 25%||Maersk – 25%||Tullow – 50%*|
|Ethiopia Rift Basin||Africa Oil – 25%*||Maersk – 25%||Marathon – 50%|
|Ethiopia South Omo||Africa Oil – 15%||Maersk – 15%||Tullow – 50%*||Marathon – 20%|
|Kenya Block 12A||Africa Oil – 20%||Tullow – 65%*||Marathon – 15%|
|Kenya Block 9||Africa Oil – 50%*||Marathon – 50%|
According to Africa Oil’s President and CEO Keith Hill this completion will put the company on a stable financial position to carry on through the year.
“We are very pleased to have received approval from the Government of Kenya. We feel Maersk will be an excellent partner in terms of technical and financial strength and experience critical to moving the development project forward. This transaction puts Africa Oil in the enviable position of not requiring any additional equity financing prior to first oil and will allow us to weather the current difficult oil price environment should it continue into 2016,” says Hill.
Going forward Maersk will pay Africa Oil US$350 million as reimbursement for approximately 50% of past costs incurred by Africa Oil prior to the agreed March 31, 2015 effective date as per the terms of the farm-out agreement.
In addition, upon Final Investment Decision (FID), Maersk will also carry up to US$405 million of Africa Oil’s working interest share of development expenditures for the Lokichar Development Project.