Petroleum Africa
Find us on: 
Wednesday, March 5, 2014
Farm-out deals in Ethiopia, initiated by Africa Oil Corp., have been approved by the government. The farm-out deals, one with Marathon Oil Corp. and the other with New Age Ethiopia, are for the Rift Basin Area and Adigala Block respectively.
Under the terms of the Marathon farm out, Marathon will acquire a 50% interest in the Rift Basin Area. Africa Oil will maintain operatorship of the block, but Marathon Oil has the right to assume operatorship if a commercial discovery is made. In consideration for the assignment of this interest, Marathon Oil will pay Africa Oil an entry payment of $3 million in respect of past costs, and has agreed to fund $15 million of Africa Oil’s working interest share of JV expenditures in the Rift Basin Area. The deal, originally announced in July 2012, is anticipated in March 2014. Following completion, Africa Oil and Marathon Oil will each hold a 50% working interest in the Rift Basin Area.
In the farm-out agreement with New Age, Africa Oil is giving up a 40% stake in the Adigala Block, this is in addition to the 10% stake it was holding previously. Africa Oil will now hold 10% and Genel Energy holds the other 40%. In consideration of the assignment New Age will carry Africa Oil’s working interest share of a planned 1,000 km 2D seismic work program in the Adigala Block. Completion of this transaction is anticipated in March 2014.
Keith Hill, Africa Oil’s president and CEO, stated, “We are very pleased to receive government approval to complete these farm-out transactions as we continue to actively manage our highly prospective East African acreage portfolio. We look forward to continuing to work with Marathon Oil as a partner given their stature and long history of success in the oil and gas business. We have a very exciting exploration and appraisal program set out for 2014 which will see us complete over 20 wells. Currently we have seven rigs running and after releasing one in mid-year will have at least six rigs running full time through the remainder of the year. Our program has three objectives, to appraise the existing key discoveries, to drill out the remaining prospects in the South Lokichar basin and to open at least one of the four new basins being tested along trend. Additionally, we are pushing hard to move the development studies along with the aim of sanctioning a pipeline development for the South Lokichar basin by the end of 2015 or early 2016. This fully funded program should continue to deliver high potential upside value for shareholders through this year and beyond.”
" alt="First LNG Realized at the Greater Tortue Ahmeyim Project">
" alt="United Energy Acquires Western Desert Producer APEX">
" alt="Baker Hughes Announces Major Gas Technology Orders for Venture Global LNG">
" alt="ReconAfrica: Naingopo Results Demonstrate a Working Petroleum System">
" alt="Tullow Highlights 2025 Operational Plans in Ghana">
" alt="TotalEnergies to Supply 1.5 TWh to STMicroelectronics in France Over 15 years">
" alt="Rockhopper Reaches Final Settlement with United on Egypt’s Abu Sennan Concession">
" alt="Oil & Gas Crucial for African Growth: AEC Calls for Industry Support to Defend African Market">
