Africa Oil Corp.
TSX : AOI
OMX : AOI

Africa Oil Corp.

July 29, 2015 02:00 ET

Africa Oil Operations and Development Update

VANCOUVER, BRITISH COLUMBIA--(Marketwired - July 29, 2015) - Africa Oil Corp. ("Africa Oil", "AOC" or the "Company") (TSX:AOI)(OMX:AOI) is pleased to provide the following update on its operations in Kenya.

Kenya

During the second quarter of 2015, activities were focused on the appraisal of the South Lokichar basin to test the extent of previous discoveries and gain important reservoir data for the field development plans.

A number of Extended Well Tests (EWTs) have been completed at the Amosing field, and preparations are advanced for the Ngamia field EWTs which are due to commence in August. The Amosing-1 and Amosing-2 wells were completed in five separate zones and initial rig-less flow testing during clean-up flowed at a cumulative maximum rate of 5,600 and 6,000 bopd respectively. These results exceeded expectations, and demonstrated high quality reservoir sands which flowed 31 to 38 degree API dry oil under natural conditions. During the test the wells produced at a cumulative average constrained rate of 4,300 bopd under natural flow conditions. Pressure data from the two wells supports significant connected oil volumes and confirms lateral reservoir continuity, which is positive for the future development. A cumulative volume of 30,000 barrels of oil has been produced into storage. Water injection tests are under way to further validate the viability of water flood reservoir management and the oil recovery assumptions.

Preparations are now well advanced for the Ngamia field EWTs which are due to commence in August. In preparation for the Ngamia EWTs, multi zone completions have been installed in the Ngamia-8, Ngamia-3 and Ngamia-6 wells and clean-up flow testing has been completed. The Ngamia EWT flow test will be followed by water injection testing. Elsewhere in the South Lokichar basin, Ngamia-9, an appraisal well for this field, was completed in July 2015 and encountered between 90 metres and 110 metres of net oil pay in the Lokone and Auwerwer horizons.

All of the appraisal work to date is strongly underpinning the Company's Gross Contingent Resources estimated range (2C and 3C) of between 616 and 1290 mmbo. This estimate was completed by independent third party resource evaluators in 2014 (see news release dated September 16, 2014) and is expected to be updated in the fourth quarter of this year. The results have also identified additional prospective upside in the basin.

A one rig operation will continue with the drilling of the Twiga-3 well, which is currently underway, followed by the large Amosing North prospect (Amosing-5) located on the northern flank of Amosing and updip of the Ngamia field (that was identified from the 3D seismic). The Cheptuket exploration well in Block 12A is scheduled to commence in October 2015 and will test a basin bounding structural closure in the Kerio Valley Basin in a similar structural setting to the successful Ngamia and Amosing discoveries. Other wells under consideration include Etom North (an appraisal well to follow up on our success at Etom-1) and Tausi (a basin opening well).

In parallel with the exploration and appraisal program, pre-FEED (Front End Engineering and Design) studies are being progressed for entry in to FEED.

Development

In Kenya discussions are under way with the Government regarding the submission of a draft Field Development Plan for the discoveries in the South Lokichar basin. Initial discussions are progressing positively and continued engagement is expected on this issue in the coming months.

Progress on the East African pipeline route to export oil from Lake Albert in Uganda and the South Lokichar Basin in Kenya has gained pace in recent months. The Governments of Uganda and Kenya are working closely together and the pipeline studies undertaken by a joint Government-appointed independent technical consultant have progressed well. The Government's decision on the pipeline route is expected in the third quarter 2015. The overall ambition is to achieve a combined project sanction of the export pipeline and Kenya upstream projects by the end of 2016.

About Africa Oil Corp.

Africa Oil Corp. is a Canadian oil and gas company with assets in Kenya and Ethiopia as well as a 41% equity interest in Africa Energy Corp. The Company is listed on the Toronto Stock Exchange and on Nasdaq Stockholm under the symbol "AOI".

Forward-Looking Statements

Certain statements made and information contained herein constitute "forward-looking information" (within the meaning of applicable Canadian s ecurities 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.

Cautionary Statements regarding Well Test Results

Drill stem tests are commonly based on flow periods of 1 to 5 days and build up periods of 1 to 3 days. Pressure transient analysis has not been carried out on all well tests and the results should therefore be considered as preliminary. Well test results are not necessarily indicative of long-term performance or of ultimate recovery.

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 July 29, 2015 at 2:00 a.m. Eastern Time.

ON BEHALF OF THE BOARD

Keith C. Hill, President and CEO

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