Africa Oil Corp.
TSX VENTURE : AOI
OMX : AOI

Africa Oil Corp.

August 22, 2012 02:00 ET

Africa Oil Announces Significant Increase in Independent Resource Estimates in Kenya and Ethiopia

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 22, 2012) - Africa Oil Corp. ("Africa Oil", "AOC", or "the Company") (TSX VENTURE:AOI)(OMX:AOI) is pleased to announce that an updated independent assessment of the Company's contingent and prospective resources on its Kenyan and Ethiopian exploration properties has been completed by Gaffney, Cline & Associates ("Gaffney Cline", or "GCA"). 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 June 30, 2012.

It should be noted that these estimates do not include the Company's Puntland (Somalia) oil and gas interests which is available at www.sedar.com under Horn Petroleum Corporation, Africa Oil's 45% owned subsidiary.

Given the large quantity of prospects and leads in the Company's portfolio, the following two tables have been prepared for the convenience of readers by Africa Oil. Readers should refer to the tables attached to this News Release, which have been prepared by Gaffney Cline, detailing the contingent and prospective oil resources by prospect and lead with the associated geological chance of success:

Summary of Prospective Oil Resources1 as of June 30, 2012
UNRISKED UNRISKED RISKED3
Country License GROSS
Best
Estimate
AOC
Working
Interest2
NET
Best
Estimate
Net
Best
Estimate
(Risked)
(MMBbl) (%) (MMBbl) (MMBbl)
Kenya Block 94 1,287 100% 1,287 177
Block 10A 588 30% 176 22
Block 10BA 9,885 50% 4,943 347
Block 10BB 3,132 50% 1,566 290
Block 12A 4,582 50% 2,291 115
Block 13 T 472 50% 236 83
Ethiopia S. Omo 2,700 30% 810 61
Notes:
1. This summation of resources has been prepared for convenience by the Company and not by Gaffney, Cline & Associates.
2. AOC Working interest share is subject to adjustment based on proposed farmouts previously announced with Tullow Oil plc, New Age (Africa Global Energy) Limited and Marathon Oil Corporation that are subject to Government approvals and have not completed as of the effective date of this report. Assuming completion of these farmouts, AOC working interests will be reduced as follows: Block 9: 50%, Block12A: 20%, Blocks 7/8: 35%.
3. Risked resources have been calculated and summed by the company after risking prospects and leads individually. Geological Chance of success (GCOS) varies with each prospect or lead.
4. Gross best estimate of prospective recoverable gas resources of 1.88 TCF are not included for Block 9.
Summary of Contingent Oil Resources1 as of June 30, 2012
GROSS
Best
(2C)
AOC
Working
NET
Best
(2C)
Country License Estimate Interest 2 Estimate
(MMBbl) (%) (MMBbl)
Kenya Block 10BB 56 50% 28
Ethiopia Blocks 7/82 155 55% 85
Notes:
1. This summation of resources has been prepared for convenience by the Company and not by Gaffney Cline & Associates.
2. Gross best estimate (2C) contingent gas resources of 106 BCF (58 BCF Net) not included in table for Blocks 7/8.

Keith Hill, Africa Oil's President and Chief Executive Officer, commented: "Gaffney Cline's independent assessment confirms the enormous resource potential of our enviable East Africa onshore acreage. We are pleased that the investment to date in our aggressive exploration program has yielded these results showing a considerable increase in the prospective resources assigned to a growing number of leads and prospects. In addition the Ngamia-1 oil discovery has resulted in a considerable increase in the geological chance of success assigned to numerous prospects and leads, most notably in the Lokichar sub-basin. We continue to aggressively explore with three seismic crews active and a continuous drilling program that is expected to have three rigs under contract by the end of 2012. We expect the next 18 months to be transformational for the Company as we will continuously drill high impact exploration targets."

Africa Oil's holdings include working interests in operated and non-operated Production Sharing Contracts (PSC's) in Kenya, Ethiopia and Puntland (Somalia) in East Africa. These Blocks contain relatively under explored plays in basins that have proven and productive analogs. Since the effective date (December 30, 2010) of Gaffney Cline's previous evaluation of prospective resources, highlights of the Company's exploration activities in Kenya and Ethiopia include:

  • Drilling the Ngamia-1 well in Block 10BB (Kenya) resulting in an oil discovery. As a result of this discovery, several prospects and leads in the Tertiary rift have been de-risked and the volume of contingent oil resources has increased;
  • The acquisition of more than 4,300 km of 2D seismic, increasing the number of mapped prospects and leads;
  • The completion of more than 53,000 km2 (73,000 line-kilometers) of full tensor gravity ("FTG") surveys. Given the size of the Company's exploration acreage, FTG has been a useful tool in efficiently generating additional leads and identifying prospective areas to target subsequent 2D seismic programs.

Please refer to the tables below detailing the Company's contingent and prospective oil resources by prospect and lead as provided by Gaffney Cline effective June 30, 2012.

Africa Oil Corp. is a Canadian oil and gas company with assets in Kenya, Ethiopia and Puntland (Somalia). Africa Oil's East African holdings are within a world-class exploration play fairway with a total gross land package in this prolific region in excess of 300,000 square kilometers. 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 Albert Graben oil discoveries in neighboring Uganda. Africa Oil's recent Ngamia-1 discovery extends the Albert Graben play into Kenya where Africa Oil along with partner Tullow hold a dominant acreage position. Newly acquired seismic and gravity data show robust leads and prospects throughout Africa Oil's project areas. The Company is listed on the TSX Venture Exchange and on First North at NASDAQ OMX-Stockholm under the symbol "AOI".

FORWARD-LOOKING STATEMENTS

Certain statements made and information contained herein constitutes "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

INDEPENDENT ASSESSMENT OF THE CONTINGENT AND
PROSPECTIVE RESOURCES OF AFRICA OIL CORP.
PROPERTIES IN EAST AFRICA
AS AT 30
th June, 2012

Prepared by Gaffney, Cline & Associates

KENYA: SUMMARY OF GROSS OIL CONTINGENT RESOURCES
AS AT 30
th JUNE, 2012

Licence Discovery Gross Contingent Resource
(MMBbl)
1C 2C 3C
Block 10BB Loperot-1 2.0 5.0 25.0
Ngamia-1 21.0 51.0 101.0

Notes:

  1. "Gross Contingent Resources" are 100% of the volumes estimated to be recoverable from the field without any economic cut-off being applied.
  2. The volumes reported here are "Unrisked" in the sense that "Chance of Development" values have not been arithmetically applied to the designated volumes within this assessment. "Chance of Development" represents an indicative estimate of the probability that the Contingent Resource will be developed, which would warrant the re-classification of that volume as a Reserve.
  3. The primary Contingent Resource volume reported here is the 2C, or 'Best Estimate', value.

KENYA: SUMMARY OF NET OIL CONTINGENT RESOURCES
AS AT 30
th JUNE, 2012

Licence Discovery NWI
(%)
Net Contingent Resource
(MMBbl)
1C 2C 3C
Block 10BB Loperot-1 50 1.0 2.5 12.5
Ngamia-1 50 11.5 25.5 50.5

Notes:

  1. "Net Contingent Resources" are stated herein in terms of AOC's net Working Interest (WI) in Block 10BB and, due to the very immature nature of these Contingent Resources, have not been computed as net entitlement volumes under the PSC. In this regard, these volumes stated herein may exceed the volumes which will arise to AOC under the terms of the PSC.
  2. The volumes reported here are "Unrisked" in the sense that "Chance of Development" values have not been arithmetically applied to the designated volumes within this assessment. "Chance of Development" represents an indicative estimate of the probability that the Contingent Resource will be developed, which would warrant the re-classification of that volume as a Reserve.
  3. No economic limit has been applied
  4. The primary Contingent Resource volume reported here is the 2C, or 'Best Estimate', value.

KENYA: SUMMARY OF GAS PROSPECTIVE RESOURCES
AS AT 30
th JUNE, 2012

Licence Prospect / Lead P/L Gross
Best
(Bcf)
AOC
NWI
(%)
Net
Best
(Bcf)
GCoS
Block 09 Bogal-1 P 1,880 100 1,880 0.40

Notes:

  1. "Gross Unrisked Prospective Resources" are 100% of the volumes estimated to be recoverable from the field.
  2. It is inappropriate to report summed-up Prospective Resource volumes or to otherwise focus upon those of other than the 'Best Estimate'.
  3. The Geological Chance of Success (GCoS) reported here represents an indicative estimate of the probability that the drilling of this prospect would result in a discovery which would warrant the re-categorisation of that volume as a Contingent Resource. These GCoS percentage values have not been arithmetically applied within this assessment. This dimension of risk assessment does not incorporate the considerations of economic uncertainty and commerciality.
  4. P/L = Prospect or Lead.
  5. Prospects are features that have been sufficiently well defined, on the basis of geological and geophysical data, to the point that they are considered viable drilling targets.

KENYA: SUMMARY OF OIL PROSPECTIVE RESOURCES
AS AT 30
th JUNE, 2012

Licence Prospect / Lead P/L Gross
Best
Estimate
(MMBbl)
AOC
NWI
(%)
Net
Best
Estimate
(MMBbl)
GCoS
Block 9 Kinyonga P 320.0 100 320.0 0.19
Pundamilia P 402.0 100 402.0 0.12
Ndovu 1 L 197.0 100 197.0 0.12
Ndovu 2 L 103.0 100 103.0 0.12
Ndovu 3 L 61.0 100 61.0 0.12
Ndovu 4 L 49.0 100 49.0 0.12
Ndovu 5 L 155.0 100 155.0 0.12
Block 10A PaiPai P 121.0 30 36.3 0.10
Paipai North L 91.7 30 27.5 0.13
West Sirius 1 L 40.3 30 12.1 0.14
West Sirius 2 L 24.2 30 7.3 0.14
West Sirius 3 L 88.6 30 26.6 0.14
Bellatrix 1 L 47.9 30 14.4 0.12
Bellatrix 2 L 85.6 30 25.7 0.12
North Sirius L 26.9 30 8.1 0.12
East Sirius L 61.8 30 18.5 0.12
Block 10BA Eliye Deep 1 L 28.0 50 14.1 0.05
Eliye Deep 2 L 91.0 50 45.5 0.05
Eliye Deep 3 L 45.0 50 22.5 0.05
Class 2 - 1 L 130.0 50 64.9 0.08
Class 2 - 2 L 399.0 50 199.3 0.08
Class 2 - 3 L 704.0 50 352.2 0.08
Class 2 - 4 L 276.0 50 137.9 0.08
Class 2 - 5 L 109.0 50 54.4 0.08
Class 2 - 6 L 104.0 50 52.0 0.08
Class 2 - 7 L 650.0 50 325.1 0.06
Class 2 - 8 L 81.0 50 40.4 0.08
Class 2 - 9 L 310.0 50 155.0 0.08
Class 2 - 10 L 289.0 50 144.3 0.06
Class 2 - 11 L 39.0 50 19.3 0.06
Class 2 - 12 L 524.0 50 262.0 0.06
Class 2 - 13 L 156.0 50 78.2 0.06
Class 2 - 14 L 1,246.0 50 623.0 0.06
Class 2 - 15 L 143.0 50 71.4 0.06
Class 2 - 16 L 151.0 50 75.5 0.06
Class 2 - 17 L 111.0 50 55.7 0.06
Class 2 - 18 L 123.0 50 61.3 0.06
Class 2 - 19 L 114.0 50 57.2 0.06
Class 2 - 20 L 54.0 50 27.1 0.06
Class 3 - 1 L 242.0 50 121.2 0.08
Class 3 - 2 L 348.0 50 174.0 0.08
Class 3 - 3 L 142.0 50 71.2 0.08
Class 3 - 4 L 514.0 50 256.8 0.08
Class 3 - 5 L 289.0 50 144.4 0.08
Class 3 - 6 L 406.0 50 203.0 0.08
Class 3 - 7 L 284.0 50 142.2 0.08
Class 3 - 8 L 314.0 50 157.1 0.06
Class 3 - 9 L 562.0 50 281.2 0.08
Class 3 - 10 L 252.0 50 126.2 0.08
Class 3 - 11 L 274.0 50 137.2 0.06
Class 3 - 12 L 172.0 50 85.8 0.06
Class 3 - 13 L 209.0 50 104.3 0.06
Block 10BB Ngamia-1 (Updip) P 137.0 50 68.5 0.62
Loperot P 201.0 50 100.5 0.34
Loperot_2 L 34.0 50 17.0 0.34
Loperot_3 L 15.0 50 7.5 0.34
Loperot_4 L 8.0 50 4.0 0.34
Ngamia E L 8.0 50 4.0 0.39
Ngamia S L 68.0 50 34.0 0.39
Kamba P 231.0 50 115.5 0.34
10BB_Lead A L 41.0 50 20.5 0.22
Kerio N Lead 1 L 551.0 50 275.5 0.11
Kerio N Lead 2 L 571.0 50 285.5 0.11
Kerio N Lead 3 L 137.0 50 68.5 0.11
Kerio N Lead 4 L 111.0 50 55.5 0.11
Kerio N Lead 5 L 34.0 50 17.0 0.11
Kerio N Lead 6 L 24.0 50 12.0 0.11
Kerio S Lead 1 L 66.0 50 33.0 0.25
Kerio S Lead 2 L 45.0 50 22.5 0.15
Kerio S Lead 3 L 143.0 50 71.5 0.11
Kerio S Lead 4 L 93.0 50 46.5 0.15
Kerio S Lead 5 L 58.0 50 29.0 0.15
Mamba L 556.0 50 278.0 0.13
Block 12A TFB_1 L 1,007.0 50 503.5 0.05
TFB_2 L 406.0 50 202.9 0.05
TFB_3 L 338.0 50 169.0 0.05
TFB_4 L 986.0 50 492.8 0.05
TFB_5 L 801.0 50 400.4 0.05
TFB_6 L 175.0 50 87.4 0.05
TFB_7 L 531.0 50 265.6 0.05
BM_1 L 121.0 50 60.4 0.05
BM_2 L 128.0 50 64.2 0.05
BM_3 L 89.0 50 44.3 0.05
Block 13T Twiga South P 59.0 50 29.5 0.39
Twiga North P 112.0 50 56.0 0.39
Kongoni P 64.0 50 32.0 0.39
Kongoni S L 9.0 50 4.5 0.39
13T_Lead E L 158.0 50 79.0 0.31
13T_Lead F L 70.0 50 35.0 0.31

Notes:

  1. "Gross Unrisked Prospective Resources" are 100% of the volumes estimated to be recoverable from the field.
  2. It is inappropriate to report summed-up Prospective Resource volumes or to otherwise focus upon those of other than the 'Best Estimate'.
  3. The Geological Chance of Success (GCoS) reported here represents an indicative estimate of the probability that the drilling of this prospect would result in a discovery which would warrant the re-categorisation of that volume as a Contingent Resource. These GCoS percentage values have not been arithmetically applied within this assessment. This dimension of risk assessment does not incorporate the considerations of economic uncertainty and commerciality.
  4. P/L = Prospect or Lead.
  5. Prospects are features that have been sufficiently well defined, on the basis of geological and geophysical data, to the point that they are considered viable drilling targets.
  6. Leads are features that are not sufficiently well defined to be drillable, and need further work and/or data. In general, Leads are significantly more risky than Prospects and therefore volumetric estimates for Leads are only indicative of relative size.

ETHIOPIA: SUMMARY OF GROSS OIL CONTINGENT RESOURCES
AS AT 30
th JUNE, 2012

Licence Discovery Reservoir 1C
(MMBbl)
2C
(MMBbl)
3C
(MMBbl)
Block 08 El Kuran U. Hamanlei 90 155 309

Notes:

  1. "Gross Contingent Resources" are 100% of the volumes estimated to be recoverable from the field without any economic cut-off being applied.
  2. The volumes reported here are "Unrisked" in the sense that "Chance of Development" values have not been arithmetically applied to the designated volumes within this assessment. "Chance of Development" represents an indicative estimate of the probability that the Contingent Resource will be developed, which would warrant the re-classification of that volume as a Reserve.
  3. The primary Contingent Resource volume reported here is the 2C, or 'Best Estimate', value.

ETHIOPIA: SUMMARY OF NET OIL CONTINGENT RESOURCES
AS AT 30
th JUNE, 2012

Licence Discovery Reservoir 1C
(MMBbl)
2C
(MMBbl)
3C
(MMBbl)
Block 08 El Kuran U. Hamanlei 49.5 85.3 170.0

Notes:

  1. "Net Contingent Resources" are stated herein in terms of AOC's net Working Interest (WI) in Block 08, and, due to the very immature nature of these Contingent Resources, have not been computed as net entitlement volumes under the PSC. In this regard, these volumes stated herein may exceed the volumes which will arise to AOC under the terms of the PSC.
  2. The volumes reported here are "Unrisked" in the sense that "Chance of Development" values have not been arithmetically applied to the designated volumes within this assessment. "Chance of Development" represents an indicative estimate of the probability that the Contingent Resource will be developed, which would warrant the re-classification of that volume as a Reserve.
  3. No economic limit has been applied
  4. The primary Contingent Resource volume reported here is the 2C, or 'Best Estimate', value.

ETHIOPIA: SUMMARY OF GROSS GAS CONTINGENT RESOURCES
AS AT 30
th JUNE, 2012

Licence Discovery Reservoir 1C
(Bcf)
2C
(Bcf)
3C
(Bcf)
Block 08 El Kuran Adigrat 42 106 324

Notes:

  1. "Gross Contingent Resources" are 100% of the volumes estimated to be recoverable from the field without any economic cut-off being applied.
  2. The volumes reported here are "Unrisked" in the sense that "Chance of Development" values have not been arithmetically applied to the designated volumes within this assessment. "Chance of Development" represents an indicative estimate of the probability that the Contingent Resource will be developed, which would warrant the re-classification of that volume as a Reserve.
  3. The primary Contingent Resource volume reported here is the 2C, or 'Best Estimate', value.

ETHIOPIA: SUMMARY OF NET GAS CONTINGENT RESOURCES
AS AT 30
th JUNE, 2012

Licence Discovery Reservoir 1C
(Bcf)
2C
(Bcf)
3C
(Bcf)
Block 08 El Kuran Adigrat 23.1 58.3 178.2

Notes:

  1. "Net Contingent Resources" are stated herein in terms of AOC's net Working Interest (WI) in Block 08 and, due to the very immature nature of these Contingent Resources, have not been computed as net entitlement volumes under the PSC. In this regard, these volumes stated herein may exceed the volumes which will arise to AOC under the terms of the PSC.
  2. The volumes reported here are "Unrisked" in the sense that "Chance of Development" values have not been arithmetically applied to the designated volumes within this assessment. "Chance of Development" represents an indicative estimate of the probability that the Contingent Resource will be developed, which would warrant the re-classification of that volume as a Reserve.
  3. No economic limit has been applied
  4. The primary Contingent Resource volume reported here is the 2C, or 'Best Estimate', value.

ETHIOPIA: SUMMARY OF OIL PROSPECTIVE RESOURCES
AS AT 30
th JUNE, 2012

Licence Prospect / Lead P/L Gross
Best
Estimate
(MMBbl)
AOC
NWI
(%)
Net
Best
Estimate
(MMBbl)
GCoS
SouthOmo Sabisa P 68.0 30 20.3 0.17
Class 1_2 P 71.0 30 21.3 0.15
Class 1_3 P 87.0 30 26.2 0.15
Class 1_4 P 10.0 30 3.0 0.15
Class 2_1 L 18.0 30 5.4 0.08
Class 2_2 L 42.0 30 12.7 0.08
Class 2_3 L 25.0 30 7.6 0.08
Class 2_4 L 30.0 30 8.9 0.08
Class 2_5 L 43.0 30 12.8 0.08
Class 2_6 L 13.0 30 4.0 0.08
Class 2_7 L 59.0 30 17.7 0.08
Class 2_8 L 21.0 30 6.4 0.08
Class 2_9 L 17.0 30 5.2 0.08
Class 2_10 L 15.0 30 4.5 0.08
Class 2_11 L 9.0 30 2.6 0.08
Class 2_12 L 9.0 30 2.8 0.08
Class 2_13 L 61.0 30 18.4 0.08
Class 2_14 L 18.0 30 5.5 0.06
Class 2_15 L 20.0 30 6.1 0.06
Class 2_16 L 12.0 30 3.5 0.06
Class 3_1 L 103.0 30 30.9 0.07
Class 3_2 L 141.0 30 42.4 0.07
Class 3_3 L 29.0 30 8.8 0.07
Class 3_4 L 57.0 30 17.0 0.07
Class 3_5 L 58.0 30 17.4 0.07
Strat 1 L 57.0 30 17.2 0.05
Strat 2 L 92.0 30 27.7 0.07
Strat 3 L 285.0 30 85.5 0.07
FTG Lead 1 L 160.0 30 48.0 0.05
FTG Lead 2 L 47.0 30 14.1 0.05
FTG Lead 3 L 163.0 30 48.9 0.05
FTG Lead 4 L 42.0 30 12.6 0.07
FTG Lead 5 L 107.0 30 32.1 0.07
FTG Lead 6 L 160.0 30 48.0 0.07
FTG Lead 7 L 32.0 30 9.6 0.07
FTG Lead 8 L 56.0 30 16.8 0.07
FTG Lead 9 L 39.0 30 11.7 0.07
FTG Lead 10 L 87.0 30 26.1 0.07
FTG Lead 11 L 15.0 30 4.5 0.07
FTG Lead 12 L 103.0 30 30.9 0.07
FTG Lead 13 L 78.0 30 23.4 0.07
FTG Lead 14 L 28.0 30 8.4 0.07
FTG Lead 15 L 113.0 30 33.9 0.07

Notes:

  1. "Gross Unrisked Prospective Resources" are 100% of the volumes estimated to be recoverable from the field.
  2. It is inappropriate to report summed-up Prospective Resource volumes or to otherwise focus upon those of other than the 'Best Estimate'.
  3. The Geological Chance of Success (GCoS) reported here represents an indicative estimate of the probability that the drilling of this prospect would result in a discovery which would warrant the re-categorisation of that volume as a Contingent Resource. These GCoS percentage values have not been arithmetically applied within this assessment. This dimension of risk assessment does not incorporate the considerations of economic uncertainty and commerciality.
  4. P/L = Prospect or Lead.
  5. Prospects are features that have been sufficiently well defined, on the basis of geological and geophysical data, to the point that they are considered viable drilling targets.
  6. Leads are features that are not sufficiently well defined to be drillable, and need further work and/or data. In general, Leads are significantly more risky than Prospects and therefore volumetric estimates for Leads are only indicative of relative size.

BASIS OF OPINION

This report has been prepared in accordance with GCA's understanding of the requirements of Canadian National Instrument 51-101. In this context GCA has followed the Canadian Oil and Gas Evaluation Handbook (COGEH) which in turn recognizes the Petroleum Resource Management System (PRMS) of the Society of Petroleum Engineers (SPE), World Petroleum Congress (WPC), American Association of Petroleum Geologists (AAPG) and Society of Petroleum Evaluation Engineers (SPEE).

This assessment has been conducted within the context of GCA's understanding of the effects of petroleum legislation, taxation, and other regulations that currently apply to these properties and GCA's best professional judgment, subject to the generally recognized uncertainties associated with the interpretation of geoscience and engineering data.

GCA is not in a position to attest to property title or rights, conditions of these rights including environmental and abandonment obligations, and any necessary licenses and consents including planning permission, financial interest relationships or encumbrances thereon for any part of the appraised properties.

The report is based on the data set made available by Africa Oil Corp. GCA is not aware of any falsification of data and does not warrant the accuracy of the data and accepts no liability for any losses from actions based upon reliance on data, which is subsequently shown to be falsified or erroneous. In any evaluation of natural resources, basic physical measurements taken over time cannot be verified in retrospect.

GCA has no reason to believe that any material facts have been withheld from it, but does not warrant that its inquiries have revealed all of the matters that a more extensive examination might otherwise disclose. The opinions and statements contained in this report are made in good faith and in the belief that such opinions and statements are representative of prevailing physical and economic circumstances.

It should be understood that any determination of Reserve volumes, particularly involving petroleum developments, or any assessment of Contingent Resources, may be subject to significant variations over short periods of time as new information becomes available and perceptions change. GCA does not guarantee the correctness or accuracy of any interpretation made by it and does not warrant that the opinions herein will be in any form of guarantee of the outcome.

CONTINGENT AND PROSPECTIVE RESOURCES

Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations, but the applied project(s) are not yet considered mature enough for commercial development due to one or more contingencies. Contingent Resources may include, for example, projects for which there are currently no evident viable markets, or where commercial recovery is dependent on technology under development, or where evaluation of the accumulation is insufficient to clearly assess commerciality. Contingent Resources are further categorized in accordance with the level of certainty associated with the estimates and may be sub- classified based on project maturity and/or characterized by their economic status.

It must be appreciated that the Contingent Resources reported herein are unrisked in terms of economic uncertainty and commerciality.

  • Low Estimate: This is considered to be a conservative estimate of the quantity that will actually be recovered. It is likely that the actual remaining quantities recovered will exceed the low estimate. If probabilistic methods are used, there should be at least a 90 percent probability (P90) that the quantities actually recovered will equal or exceed the low estimate.
  • Best Estimate: This is considered to be the best estimate of the quantity that will actually be recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate. If probabilistic methods are used, there should be at least a 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best estimate.
  • High Estimate: This is considered to be an optimistic estimate of the quantity that will actually be recovered. It is unlikely that the actual remaining quantities recovered will exceed the high estimate. If probabilistic methods are used, there should be at least a 10 percent probability (P10) that the quantities actually recovered will equal or exceed the high estimate.

There is no certainty that it will be commercially viable to produce any portion of the Contingent Resources.

Prospective Resources are those quantities of petroleum that are estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective Resources have both an associated chance of discovery and a chance of development. Prospective Resources are further subdivided in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and may be sub- classified based on project maturity.

There is no certainty that any portion of the Prospective Resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.

Prospective Resources include Prospects and Leads. Prospects are features that have been sufficiently well defined, on the basis of geological and geophysical data, to the point that they are considered drillable. Leads, on the other hand, are not sufficiently well defined to be drillable, and need further work and/or data. In general, leads are significantly more risky than prospects and therefore are not suitable for explicit quantification.

Prospective Resource volumes are presented as unrisked. It must be appreciated that Prospective Resources are risk assessed only in the context of applying the stated 'Geological Chance of Success', a percentage which pertains to the percentage probability of achieving the status of a Contingent Resource (where the Geological Chance of Success is unity). This dimension of risk assessment does not incorporate the considerations of economic uncertainty and commerciality.

GCA is an energy consultancy specializing in independent petroleum advice on resource evaluation and economic analysis. In preparation of this report, GCA has maintained, and continues to maintain, a strict consultant - client relationship with AOC. The management and employees of GCA have been and continue to be, independent of AOC in the services they provide to the company including the provision of the opinion expressed in this report. Furthermore the management and employees of GCA have no interest in any assets or share capital of AOC or in the promotion of the company.

Opinions concerning sub-surface petroleum resources are associated with considerable uncertainty and represent best estimates based on the data available at the time the opinion is given. The acquisition of new data in the future and/or variations in economic circumstances and market forces may result in significant upward or downward movements in revised total resource estimates.

RISKS AND CAUTIONARY STATEMENTS

Significant Positive and Negative Factors Relevant to the Resources Estimates:

This news release contains forward looking information including, but not limited to, estimated resources. The forward looking information is based on current expectations and is subject to a number of risks and uncertainties which could cause actual results to differ materially from those anticipated. These risks include, but are not limited to the following:

Risks associated with ever making a discovery:

The estimation of prospective resource volumes for high-risk and poorly calibrated basins can be subject to large variation from the introduction of new information. The estimates presented herein are based on all of the information available; however, new data or information is likely to have a material effect on the resource assessment values. There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that the discovery will be commercially viable to produce any portion of the resources. Given that most of the resources in the portfolio are in leads that require additional data to fully define their potential it is likely that significant changes to the resource estimates will occur with the incorporation of additional data and information.

Risk Associated with the Estimates:

In the event of a discovery, basic reservoir parameters, such as porosity, net hydrocarbon pay thickness, fluid composition and water saturation, may vary from those assumed by GCA affecting the volume of hydrocarbon estimated to be present. Other factors such as the reservoir pressure, density and viscosity of the oil and solution gas/oil ratio will affect the volume of oil that can be recovered. Additional reservoir parameters such as permeability, the presence or absence of water drive and the specific mineralogy of the reservoir rock may affect the efficiency of the recovery process. Recovery of the resources may also be affected by well performance, reliability of production and process facilities, the availability and quality of source water for enhanced recovery processes and availability of fuel gas. There is no certainty that certain mineral interests are not affected by ownership considerations that have not yet come to light.

Risk Associated with the Classifications:

Substantial Capital Requirements:

Africa Oil expects to make substantial capital expenditures for exploration, development and production of oil and gas reserves in the future. The Company's ability to access the equity or debt markets in the future may be affected by any prolonged market instability. The inability to access the equity or debt markets for sufficient capital, at acceptable terms and within required time frames, could have a material adverse effect on the Company's financial condition, results of operations and prospects.

Ability to Execute Exploration and Development Program:

It may not always be possible for Africa Oil to execute its exploration and development strategies in the manner in which the Company considers optimal. Execution of exploration and development strategies is dependent upon the political and security climate in the host countries where the Company operates. The Company's exploration and development programs in East Africa may involve the need to obtain approvals from relevant authorities who may require conditions to be satisfied or the exercise of discretion by the relevant authorities. It may not be possible for such conditions to be satisfied.

Absence of a Formal Development Plan including Required Funding:

There is no certainty the Company will prepare and approve a development plan for any portion of the contingent resources or that the Company will be successful in funding any development should such a plan be prepared. General market conditions, the sufficiency of such a development plan and the outlook regarding oil and gas prices are some factors that will influence the availability of funding.

Access to Infrastructure:

Africa Oil's ability to produce and market hydrocarbons from any potential discoveries will depend on its ability to access suitable infrastructure. The Company may also be affected by deliverability uncertainties related to the proximity of its potential production to pipelines and processing facilities and operational problems affecting such pipelines and facilities as well as potential government regulation relating to price and the export of oil and gas. Currently there is limited local infrastructure and markets for oil, natural gas and condensate and export infrastructure to enable other markets to be accessed has not yet been developed. Africa Oil will work with its partners and government authorities to evaluate the commercial potential and technical feasibility of any discovery made.

Additional Risks:

Additional risks associated with the estimate of the prospective and contingent resources include risks associated with the oil and gas industry generally (i.e. financing; operational risks in exploration, development and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of estimates and projections related to production; costs and expenses; health, safety, security and environmental risks; and the uncertainty of resource estimates), drilling equipment availability and efficiency, the ability to attract and retain key personnel, the risk of commodity price and foreign exchange rate fluctuations, the uncertainty associated with dealing with governments and obtaining regulatory approvals, and the risk associated with international activities.

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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