Africa Oil Corp.
TSX VENTURE : AOI

Africa Oil Corp.

April 07, 2010 09:00 ET

Africa Oil Corp.: Operations and Corporate Update

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 7, 2010) - Africa Oil Corp. (TSX VENTURE:AOI) ("Africa Oil" or "the Company") is pleased to provide an update regarding its ongoing exploration activities in East Africa and other corporate developments.

Kenya

Block 9: Drilling of the Bogal 1-1 well is ongoing. The well is currently at a depth of approximately 5,000 metres and is drilling ahead to a planned total depth of approximately 5,500 metres. CNOOC is the operator of Block 9. A comprehensive set of wireline logs is currently being run to assess the hydrocarbon potential of numerous Cretaceous age sandstones encountered to date. Africa Oil holds a 20% working interest in this project.

Block 10BB: The tendering process for 600 km of 2D seismic has been completed and the contract will be awarded shortly. The acquisition program is expected to commence before the end of the second quarter of 2010. The Company has reprocessed all available vintage seismic data sharpening the imaging and the amplitude response for use in detecting direct hydrocarbon indicators. The Company held its initial meeting with the local community leaders in March in order to formally introduce the Company and outline the planned work program for 2010. The Company holds an 80% working interest in this project.

Block 10A: The Company is reprocessing all available vintage seismic data with the objective of improving the imaging of the data acquired in the late 1980s. New play concepts are being developed based on the reprocessed data in combination with vintage drilling data. The Company intends to acquire 750 km of 2D seismic in the Block following the Block 10BB seismic acquisition program. The Company holds a 55% working interest in this project.
Ethiopia

Adigala Area: Africa Oil completed 500 km of 2D seismic acquisition in the Adigala area during the fourth quarter of 2009. The data processing has now been completed and interpretation is underway at the Company's technical office in Calgary. The basin prospectivity, at this early stage, appears excellent with a number of large structural leads having been identified from the seismic data. In addition, earlier completed surface geology and sampling has documented the presence of excellent quality source and reservoir along the basin margin. The Company holds a 50% working interest in this project.

Ogaden Area (Blocks 2&6, 7&8): Seismic operations have been initiated in the Company's Ogaden area. A base camp is under construction and supplies are being mobilized. Local labor has been hired and survey and line clearing crews are actively working. Seismic recording is planned to start during the second quarter of 2010. The Company's plans are to acquire 500 km of 2D data over previously identified leads in order to mature these leads into drillable prospects. The Company holds a 55% working interest in these projects.

Somalia (Puntland)

Dharoor Block: The Company has completed a comprehensive interpretation of newly acquired 2D seismic data over the Dharoor Block. Several large prospects have been identified. Africa Oil and its joint venture partners have agreed to initially drill one prospect in Dharoor. The well is expected to commence drilling before the end of 2010. The Company holds a 65% working interest in this project.

Nugaal Block: Africa Oil has completed a re-interpretation of the existing 2D seismic data over the Nugaal Block. Several large prospects have been identified. Africa Oil and its joint venture partners are in discussion regarding drilling plans for 2010-2011. The Company holds a 65% working interest in this project.

Corporate

On March 15, 2010 the TSX Venture Exchange granted Lion Energy Corp ("Lion") final approval of the previously announced farmout between the Company and Lion. Under the farmout agreement Lion has the right to earn an interest in five of the Company's petroleum blocks located in Kenya and Puntland (Somalia). Please refer to the Company's previous press release dated December 23, 2009.

With receipt of final Exchange approval of the farmout agreement, Africa Oil is now seeking final Exchange approval for its finder's fee arrangements with Peninsula Merchant Syndication Corp. A finder's fee is payable to Peninsula in consideration of its assistance in the negotiation and completion of the farmout agreement. Under the proposed arrangement with Peninsula, Africa Oil will, subject to Exchange approval, issue 405,240 common share of the Company to Peninsula, at a deemed price of $1.04 per common share, immediately upon receipt of Exchange approval. Up to an additional 405,240 common shares of the Company will be issued to Peninsula over time as Lion and the Company fulfill their expenditure obligations under the farmout agreement.

The Company reports that it has granted an aggregate of 1,617,500 incentive stock options to certain officers, directors and other eligible persons of the Company. The options are exercisable, subject to vesting provisions, over a period of three years and will be priced based at the closing price on April 8, 2010.

Comments from the CEO, Keith Hill

"I am extremely encouraged by the fact that we have assembled a highly prospective portfolio that extends across four different proven petroleum play types. With major discoveries being announced offshore of East Africa coupled with Tullow's fantastic success in Uganda, Africa Oil is well positioned in an under-explored area of Africa which is gaining considerable oil and gas industry awareness. We continue to focus on aggressively exploring in each country that we operate."

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".

FORWARD-LOOKING STATEMENTS

Certain statements made and information contained herein constitute "forward-looking information" (within the meaning of applicable Canadian securities legislation). Such statements and information (together, "forward looking statements") relate to future events or the Company's future performance, business prospects or opportunities. Forward-looking statements include, but are not limited to, statements with respect to estimates of reserves and or resources, future production levels, future capital expenditures and their allocation to exploration and development activities, future drilling and other exploration and development activities, ultimate recovery of reserves or resources and dates by which certain areas will be explored, developed or reach expected operating capacity, that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.

All statements other than statements of historical fact may be forward-looking statements. Statements concerning proven and probable reserves and resource estimates may also be deemed to constitute forward-looking statements and reflect conclusions that are based on certain assumptions that the reserves and resources can be economically exploited. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "seek", "anticipate", "plan", "continue", "estimate", "expect, "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions) are not statements of historical fact and may be "forward-looking statements". Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Company believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. The Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by applicable laws. These forward-looking statements involve risks and uncertainties relating to, among other things, changes in oil prices, results of exploration and development activities, uninsured risks, regulatory changes, defects in title, availability of materials and equipment, timeliness of government or other regulatory approvals, actual performance of facilities, availability of financing on reasonable terms, availability of third party service providers, equipment and processes relative to specifications and expectations and unanticipated environmental impacts on operations. Actual results may differ materially from those expressed or implied by such forward-looking statements.

ON BEHALF OF THE BOARD

Keith Hill, President and CEO

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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