Africa Oil Kenya Operations Update
BY Market Wire
— 2:00 AM ET 07/26/2017
VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 07/26/17 -- Africa Oil Corp. ( AOIFF ) ("Africa Oil", "AOC" or the "Company") (OMX:AOI) is pleased to provide the following update on its operations in Kenya.
Kenya
Exploration and Appraisal
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, 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 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 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, 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 has been successfully demonstrated and underpins the feasibility of water injection for the development of these fields.
(Africa Oil) 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.
Field development
In addition to the drilling and operational activities to support the Final Investment Decision ("FID") for the Kenya Full Field Development, engineering studies and contracting activities are under way in preparation for the start of the Front End Engineering Design ("FEED"), which is expected to commence in late 2017. In parallel to the upstream development work, the JV Partners and the Government of Kenya continue to progress commercial and finance studies for the proposed export pipeline, and preparations are under way for the Environmental and Social Impact Assessment (ESIA).
The Early Oil Pilot Scheme ("EOPS") Agreement between the JV Partners and the Government of Kenya was signed on 14 March 2017 allowing all EOPS upstream contracts to be awarded. The first phase of the EOPS will be the evacuation of the stored crude oil, which was produced during extended well testing in 2015, to Mombasa by road. This initial phase of the project has been deferred by the Government of Kenya until after elections have taken place in early August. The EOPS production of 2,000 bopd is expected to commence around the end of the year and will now include an extended water-flood pilot test in Ngamia. Results from the Ngamia water-flood pilot will assess sustainable production levels to inform the overall resource and Full Field Development Plan.
