Africa Oil Announce Second Quarter 2017 Results

Africa Oil Corp. (“Africa Oil” or the “Company”) (TSX:AOI)(OMX:AOI) announce its financial and operating results for the three and six months ended June 30, 2017.

As at June 30, 2017, the Company had cash of $436.9 million and working capital of $440.2 million as compared to cash of $463.1 million and working capital of $435.0 million at December 31, 2016. The Company continues to work closely with its Joint Venture Partners to focus efforts on advancing the South Lokichar Basin development in Blocks 10BB and 13T (Kenya) by undertaking activities aimed at increasing resources and resource certainty while progressing development studies and planning.

We are pleased to have recommenced drilling activities in the South Lokichar Basin during the fourth quarter of 2016 and to have agreed with our Joint Venture Partners to extend the ongoing exploration and drilling campaign in the South Lokichar Basin.

During the second quarter of 2017, further to the previously announced farmout agreement (press release 4th February 2016), the Company and Maersk agreed to payment terms related to the $75.0 million advance development carry. Africa Oil is due to receive equal quarterly payments of $18.75 million at the end of each calendar quarter during 2018. These proceeds were recognized in accounts receivable ($37.5 million current and $37.5 million long term) and intangible exploration assets during the second quarter of 2017.

The exploration and appraisal campaign in Kenya has progressed to schedule in 2017 with two discoveries made. The first discovery was made in January 2017 at Erut-1 (Block 13T), which proved that oil has migrated to the northern limit of the South Lokichar basin. The second was made in May 2017 at Emekuya-1 (Block 13T) which encountered significant oil sands, demonstrated oil charge across a significant part of the Greater Etom structure and further de-risked the northern area of the basin.

The Etiir-1 (Block 13T) exploration well, which targeted a large, shallow, structural closure immediately to the west of the Greater Etom structure, spudded in late June and was unsuccessful with no material reservoir development or shows encountered. Although dry, this well has helped define the westerly extent of the Greater Etom Structure.

The JV Partners also drilled the Amosing-6, Ngamia-10, and Etom-3 appraisal wells (Block 10BB), the results of which are being incorporated into ongoing field development planning activities.

A further three wells are planned this year with drilling underway to test an undrilled fault block adjacent to the Ekales field. The Ngamia-11 appraisal well will be drilled and completed for use in an extended water flood pilot test in conjunction with the Early Oil Pilot Scheme (EOPS) and the Etete exploration well is planned to test a prospect adjacent to the Greater Etom structure. Further locations are currently under evaluation to be added to the programme.

Water injection testing on the Amosing and Ngamia fields (Block 10BB) has been successfully demonstrated and underpins the feasibility of water injection for the development of these fields.

Africa Oil Corp. has a 25% working interest in Blocks 10BB and 13T with Tullow Oil plc (50% and Operator) and Maersk Olie og Gas A/S (25%) holding the remaining interests.

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