Pursuant to the Farmout Agreement, to earn its 80% participating interest, Africa Oil would pay 80% of past costs incurred by Agriterra, to a maximum of US$2,517,000, and fund 100% of the costs associated with a work program comprised of 500 kilometres of 2D seismic, a field geology program, and a surface geochemistry program. Total cost exposure for this work program is estimated at $6.5 MM USD with the majority of these costs to be incurred in the first half of 2011.
Africa Oil President and CEO Keith Hill commented, “The addition of the South Omo block brings the total gross acreage on which the Company has signed agreements on to almost 250,000 square kilometres and gives us a dominant land position in the highly prospective East Africa Tertiary Rift trend. We currently have two seismic crews and one drilling rig active and are expecting to test all major play types within the next 12 to 18 months. The increased activity in East Africa will also allow us to attract international partners to reduce the risk capital required to explore these highly prospective rift basins.”
Completion under the Farmout Agreement is conditional on the parties obtaining Ministerial consent and all requisite regulatory, third party and Ethiopian Government approvals.
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Africa Oil Corp. is a Canadian oil and gas company with assets in Kenya, Puntland (Somalia) and Ethiopia. Africa Oil’s East African holdings are in what is considered a truly world-class exploration play fairway. The Company’s total gross land package in this prolific region is in excess of 225,000 square kilometers – an area roughly the size of Great Britain. The East African Rift Basin system is one of the last of the great rift basins to be explored. New discoveries have been announced on all sides of Africa Oil’s virtually unexplored land position including the major Heritage/Tullow Albert Graben oil discovery in neighbouring Uganda. Similar to the Albert Graben play model, Africa Oil’s concessions have older wells, a legacy database, and host numerous oil seeps indicating a proven petroleum system. Good quality existing seismic show robust leads and prospects throughout Africa Oil’s project areas. The Company is listed on the TSX Venture Exchange under the symbol “AOI”.
