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Wednesday, September 17, 2014
Africa Oil Corp. saw its contingent resources in Kenya rise based on an independent assessment by Gaffney, Cline & Associates (GCA). The blocks that saw their resources increase were Blocks 10BB and 13T, where the company is partnered with Tullow Oil.
Total 2C gross contingent resources increased 67% to 616 million barrels of oil and total 3C gross contingent resources increased 52% to 1.29 billion barrels of oil in the oil fields discovered to date in the South Lokichar basin. The Prospective Resource estimates outside of the field areas in the South Lokichar Basin have not been updated and it is planned to do a comprehensive update of all resources on all properties at year end.
The independent assessment was carried out in accordance with the standards established by the Canadian Securities Administrators in National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities. The effective date of the report is July 31, 2014.
In addition, the company announced that two key exploration wells have commenced drilling, the Kodos-1, which is a basin opening well in the Central Kerio Basin and the Ekosowan-1 well, which is a large prospect on the ‘string of pearls’ trend on the western basin bounding fault in the South Lokichar Basin directly south of the Amosing and Ngamia significant discoveries. These wells are expected to be completed by year end.
Keith Hill, Africa Oil’s president and CEO, commented: “Gaffney Cline’s independent assessment confirms a significant increase in Contingent Resources for the South Lokichar Basin in Northern Kenya. Based on the drilling and testing program over the past year our best estimate is now that the company’s discoveries in the South Lokichar Basin contain gross Contingent Resources of 616 million barrels of oil (2C estimate), an increase of 67% on previous estimates, and may contain as much as 1291 million barrels of gross oil Contingent Resources (3C estimate), an increase of 52%. This level of resources exceeds the threshold for development and we are targeting development sanction at the end of 2015/early 2016. We continue to aggressively explore and appraise the basin with three rigs operating and are currently acquiring a large 3D seismic survey in the west and north of the basin. The key factors to address to increase these resources over the next year will be related to recovery factors and reservoir connectivity and the early appraisal results at Ngamia and Amosing provide encouragement on the lateral continuity of the Auwerwer sands. The upcoming extended well tests at Ngamia and Amosing and the ongoing appraisal and core analysis programs will provide additional data to support this understanding. We also have an exciting exploration portfolio on trend with the South Lokichar Basin and will have drilled six new basins by the end of 2015. We are confident that our early successes will be repeated in at least one additional new basin.”
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