The Company is significantly increasing the pace of exploration. For a period during the last half of the year, the Company will have six drilling rigs operating and expects to exit the year with five rigs operating.
The Ngamia-1, Twiga South-1 and Etuko-1 light oil discoveries in the Lokichar sub-basin, combined with positive results from reservoir analysis and flow rate tests at Ngamia-1 and Twiga South-1, has led to a significant increase in the pace of exploration focused on tertiary rift basins. The Company and its joint venture partners in the tertiary rift play in east Africa plan to have four rigs operating by the end of 2013. The near term focus of these rigs is to continue drilling and testing wells in the Lokichar sub-basin in Kenya with improved efficiencies in an effort to continue building its contingent resource base, and to drill potential basin-opening wells in the Turkana, Chew Bahir, and Kerio basins in the tertiary rift play within Kenya and Ethiopia. Resources discovered to date are of a scale that the Tullow-Africa Oil joint venture partnership will initiate discussions with the Government of Kenya and other relevant stakeholders to consider development options. These discussions include consideration of a "start-up phase" oil production system with potential to deliver significant production rates with oil export via road or rail in advance of a full-scale pipeline development. The Company and its partners will continue to acquire seismic data throughout the tertiary rift in Kenya and Ethiopia in an effort to add to its existing portfolio of drill-ready prospects.
The Company and its operating partner in Block 9 in Kenya are currently mobilizing Greatwall GW190 rig to drill the Bahasi-1 exploratory well. This well which is planned to spud in September will be drilled on a large anticlinal structure targeting tertiary and cretaceous sandstones where six billion barrels of oil was discovered along trend in Sudan in a similar geologic setting. A follow-up well is also being considered in early 2014 in Block 9. The Company and its operating partners in Blocks 7/8 in Ethiopia are currently mobilizing a rig to drill a well to appraise reservoir characteristics of Jurassic carbonates on the El Kuran oil accumulation. The main focus of this well which is expected to spud in September, is to establish commercial rates with acidizing, fraccing and horizontal sidetracks being considered.
Based on the encouragement provided by the Shabeel wells, the Company and its partners entered the next exploration period in both the Dharoor Valley and Nugaal Valley PSAs which carry a commitment to drill one well in each block within an additional three year term ending October 2015. The current operational plan is to contract a seismic crew to acquire additional data in the Dharoor Valley block and to hold discussions with the Puntland Government regarding drill ready prospects in the Nugaal Valley block. The focus of the Dharoor Valley block seismic program will be to delineate new structural prospects for the upcoming drilling campaign. Horn has been in discussion with potential joint venture partners and is reviewing new venture opportunities in the region.
Africa Oil Corp. is a Canadian oil and gas company with assets in Kenya and Ethiopia as well as Puntland (Somalia) through its 45% equity interest in Horn Petroleum Corporation. Africa Oil's East African holdings are in within a world-class exploration play fairway with a total gross land package in this prolific region in excess of 250,000 square kilometers. The East African Rift Basin system is one of the last of the great rift basins to be explored. Two new significant discoveries have been announced in the Lokichar basin in which the Company holds a 50% interest along with operator Tullow Oil plc. The Company is listed on the TSX Venture Exchange and on First North at NASDAQ OMX-Stockholm under the symbol "AOI".
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