VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 08/19/10 -- Africa Oil Corp. (TSX VENTURE: AOI) ('Africa Oil' or 'the Company') is pleased to report that it has received Ministerial consent in connection with the previously announced Farmout Agreement with Agriterra Ltd. (formerly White Nile Ltd.) and the deal has now closed. Under the Farmout Agreement, Africa Oil Ethiopia B.V. ('AOEBV'), a wholly-owned subsidiary of Africa Oil, has acquired an 80% participating interest in, and operatorship of, the South Omo Block in Ethiopia.
South Omo represents a new opportunity for Africa Oil to secure a highly prospective block in the Omo Rift Valley of south-western Ethiopia. The block spans 29,465 square kilometres and is within the Tertiary age East African Rift, just north of Lake Turkana, Kenya and within the same petroleum system as the Company's Kenya Block 10BB and Tullow's Uganda discoveries.
Pursuant to the Farmout Agreement AOEBV will pay 80% of past costs incurred by Agriterra, to a maximum of US$2,517,000, to earn its 80% participating interest. The payment of these past costs will be set-off against future cash calls made to Agriterra by AOEBV in respect of Agriterra's 20% Participating Interest. AOEBV will also fund 100% of the costs associated with a work program comprised of 500 kilometres of 2D seismic, a field geology program, and a surface geochemistry program. Total cost exposure for this work program is estimated at $6.5 MM USD with the majority of these costs to be incurred in the first half of 2011.
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 in what is considered a truly world-class exploration play fairway. The Company's total gross land package in this prolific region is approaching 250,000 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 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'.
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.
Africa Oil Corp.