Africa Oil Corp.
TSX : AOI
OMX : AOI

Africa Oil Corp.

August 18, 2015 17:00 ET

Africa Oil Announces US$50 Million Equity Subscription Financing With International Finance Corporation

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 18, 2015) -

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Africa Oil Corp. ("Africa Oil" or the "Company") (TSX:AOI)(OMX:AOI) is pleased to announce that it has entered into an equity subscription agreement with International Finance Corporation ("IFC"), a member of the World Bank Group, to sell, on a non-brokered private placement basis, 31,169,048 of its common shares at a price of CAD $2.10 for gross proceeds of CAD $65,455,000 (US $50 million(1)). Upon completion of the private placement IFC will hold approximately 6.83% of the issued and outstanding common shares of the Company.

IFC is the world's largest global development institution focused exclusively on the private sector in developing countries.

Proceeds of the private placement will be used to fund the Company's oil and gas exploration, appraisal and development activities, and general working capital requirements, primarily aimed at advancing the appraisal and development of the South Lokichar Basin in Blocks 10BB and 13T.

An application will be made to the Toronto Stock Exchange (the "TSX") for approval of the private placement. The closing of the financing is subject to regulatory approval and certain other customary conditions. The Company expects the closing to occur on or around August 31, 2015. The new shares will be admitted to trading on Nasdaq Stockholm after they have been issued by the Company.

Keith Hill, President and CEO of Africa Oil, commented, "We are very pleased that we were able to attract an investment partner of the caliber of IFC and consider it an important endorsement of our project. This investment will underscore our commitment to conducting our operations to high social and environmental standards. The investment allows us to continue moving the Lokichar project forward in the difficult times of low oil prices and we hope that IFC will become a long term partner as we move the project into development. We also look forward to expanding this relationship as development accelerates in light of the recently announced export pipeline agreed by the Kenya and Uganda host governments."

"The sustainable development of the South Lokichar project holds significant potential for Kenya's continued economic growth," said Lance Crist, IFC Global Head of Natural Resources. "Through this investment, IFC looks forward to an active engagement with Africa Oil that will help pioneer Kenya's entry into the cadre of oil producing nations in sub-Saharan Africa."

The common shares issued in the financing will be subject to resale restrictions under Canadian securities laws for a period of four months plus one day from the date of the closing of the financing.

The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or applicable state securities laws, and may not be offered or sold in the United States absent registration or an exemption from such registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

(1) Based on the USD CAD Noon Rate (1.3091) posted by the Bank of Canada for August 17, 2015.

About Africa Oil Corp.

Africa Oil Corp. is a Canadian oil and gas company with assets in Kenya and Ethiopia. The Company is listed on the Toronto Stock Exchange and on Nasdaq Stockholm under the symbol "AOI".

About IFC

IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, IFC uses its capital, expertise, and influence to create opportunity where it's needed most. In FY15, IFC's long-term investments in developing countries rose to nearly $18 billion, helping the private sector play an essential role in the global effort to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.

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.

Additional Information

The information in this release is subject to the disclosure requirements of Africa Oil Corp. under the Swedish Securities Market Act and/or the Swedish Financial Instruments Trading Act. This information was publicly communicated on August 18, 2015 at 2:00 p.m. Pacific Time.

ON BEHALF OF THE BOARD

Keith C. Hill, President and CEO

Contact Information