Africa Oil and Tullow were the bell of the East African Oil Conference ball in March after announcing a discovery at the Ngamia-1 well. This has drawn a lot of attention to the hugely enviable acreage they have under license. There are some big price drivers are the moment as the stock rerates, here's my summary. DYOR of course as these are my views and I'm not particularly clever.


+++++Ngamia-1 discovery++++

That discovery was the first pay zone of the first well on the Tertiary rift and de-risks EIGHTLY odd leads and prospects along the rift. The well must be at TD by now and would be undergoing testing. Is Ngamia-1 commercial? Well AOI is surging and Tullow was up over 2% today when they should have fell a couple of percent because they're ex-dividend today. The 20m net payzone discovery was announced 23 days ago -

http://www.thepressreleasewire.com/client/africa_oil/release.jsp?year=2012&actionFor=1589121&releaseSeq=2


+++++Block 9 Farm Out (?)++++

Information relating to Block 9 was updated in the April AOI Corporate Presentation, providing further insight into the size of the Bogal discovery and also reveiling a multi-billion barrel oil prospect .

- The Bogal-1 gas discovery resource estimate was updated to 4.5Tcf from 2.5Tcf of RECOVERABLE gas with a well plan to target the middle of the huge structure.

- The Kiyonga oil prospect was also reveled and it's a MONSTER with up to 1200 MMBO RECOVERABLE. In other words, it's a multi billion in place prospect.

Announcing a discovery in front of the East African Oil conference which would have been attended by the majority of the regional industry was a PR stunt like no other! AOI have by far the largest and most diverse land position (prospects across all four major rift basins). Many people want a piece of the pie and Block 9 has just been put in the shop front.

As pure speculation on my part, 25%-50% stake of Block 9 for a free carry on two Block 9 wells Bogal-2 and Kiyonga would be fair business. $100m investment for a $3b+ potential prize.


++++Shabeel-1 discovery (?)++++

Oil also discovered on the the first payzone "electrical logs indicates a potential pay zone of between 12 and 20 meters in the section" but testing was inconclusive. This well will target deeper prospects that are analogous to Yemen on the northern extension of the the Jurassic rift. RMP and RRL announced yesterday that "the well has not yet reached depths targeting primary reservoir" so there's still everything to play for.



++++Institutional Block Buying++++

Many rampers talk up Institutional buying. Few can point to the trades and the institutions!

- Instinet have been accumulating ($800k yesterday) "Instinet is an institutional, agency-only broker. As such, it executes trades for roughly 1,500 “buyside” clients such as asset management firms, hedge funds, insurance companies, mutual funds and pension funds."

- Dundee wealth management have been building a large position this week (several million)

- JP Morgan brought $1m in stock on 17/04

- Merrill Lynch brought $1m in stock over the last few days

- Canaccord wealth management brought $1m in stock yesterday

Institutions and the wealthy are buying large stakes. Lot's of spikes just before the close as you'll notice. PI's buy at the open, professionals buy at the close.


I'm sharing my research and insights here. Please DYOR. Question everything you read and validate the facts and assumptions for yourself. Be smart in other words!