Breakdown of 2C Oil Resources Increase in South Lokichar Basin

Africa Oil has announced 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) increased 2C unrisked resources increased by 150 million barrels (or 24%) to 766 million barrels of oil.

This is an increase from the last independent assessment of the Company’s Contingent Resources in the South Lokichar Basin located in Blocks 10BB and 13T in Kenya by Gaffney, Cline & Associates increasing the total 2C (best) gross contingent resources by 67% to 616 million barrels of oil and total 3C (high)  gross contingent resources increased 52% to 1.29 billion barrels of oil.

12 million barrels are however classified as Development Unclarified from the Etuko and Ewoi fields leaving the Development Pending resources at 754 million barrels.

In six of the fields (Ngamia, Amosing,Ekale, Etom, Twiga and Agete) the assessment placed the chance of commerciality at 86 percent while at Etuko and Ewoi the chance of commerciality at 50 percent.

Net Contingent Resources in this table are AOC’s Working Interest fraction of the Gross Field Contingent Resources as of December 31, 2015 and do not represent AOC’s Working Interest following the completion of the farmout to Maersk which was completed in February 2016

The assessment also provides the net present value of future net revenue calculated under the terms of the Block 10BB and Block 13T PSCs using DMCL’s forecast prices with effective date December 31, 2015 less a constant $3/bbl discount to Brent blend.

“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,” says Africa Oil CEO Keith Hill.

On developing the fields Africa Oil says Pre-FEED engineering studies that have been completed on the production facilities and crude oil pipeline export route indicate that 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.