Africa Oil Corp (AOIFF)

[douginil]

AllAfrica: Africa Oil & Tullow article
Referenced by Travis Johnson the Stock Gumshoe

Kenya: Africa Oil and Tullow Watching Oil Prices - 3 Dec 2014
http://allafrica.com/stories/201412031663.html

By Richard Mungai


Oil is rethinking cutting budget and going slow in oil exploration and development projects that its currently undertaking in Northern Kenya amid the falling global crude prices, president Keith Hill said on Tuesday.

"We will look to cut our budgets to essential items as the access to reasonably priced equity funds becomes more difficult, but we do not see curbing investment on our primary activities which include building resource base and exploring new basins in Kenya," he told the star in an email response.

Its counterpart, Tullow Oil said it is not considering such options.The Canadian oil and gas company holds a 50 per cent stake in the oil rich wells reserves of Turkana while the London based - Tullow owns the rest.

"Tullow will cut global exploration budget to $300 million in 2015. We have a flexible balance sheet and good hedging in place to protect our revenues although clearly revenues will be affected by a lower realized oil price.

We have no plans to farm out our acreage in Kenya," senior communication adviser Mercy Kabangi said on email.Brent crude is the global oil pricing benchmark and has been trading below the $100 mark since June.

Financial analyst Aly Khan Satchu said the sharp fall in the price Brent crude, to lows of $69 a barrel as of last week, has seen Africa Oil and Tullow stock depreciate by 67.822 per cent and 50.175 per cent, respectively, in 2014.

"Our main financial damage at this point is due to our declining share price given the overall negative sentiment for oil companies in the investment market," Hill said adding that capital will always go to the best projects.

Hill said the oil industry is concerned that governments are suggesting to impose new taxes or royalties.