Africa Oil: kings of East Africa

6 October 2013

Working at the forefront of Africa’s emerging oil industry

Operating in Ethiopia, Kenya and Puntland, with multibillion barrels oil field potentials on trend, Africa Oil, with Tullow as its JV partner, has opened up the eyes of the energy world to Kenya.

Its first well, Ngamia-1, on Block 10BB, Kenya, drilled in 2012 by Tullow was a clear success, with now more than 200 metres of net oil pay, and generated headlines across the world.

Its second well, the Twiga South-1 exploration well, located in Block 13T, onshore Kenya, encountered more than 70 metres of net oil pay in tertiary sandstone reservoirs. The follow up to Twiga was a discovery on the Etuko prospect in the Lokichar Basin in Block 10BB in Kenya, with net pay of 40 metres and excellent reservoir qualities.

Not content with that, their most recent drill in September 2013 was also successful. The Ekales well JV with Tullow discovered oil in Block 13T in Kenya with a potential pay zone of 60 to 100 metres representing the fourth consecutive significant oil find in this basin. Four major drills have resulted in four significant finds that will change the economics of East Africa with risked net best estimates of more than 1.2billion barrels of oil in the Lockichar sub-basin alone.

With a market cap of $2.2 billion on the TSX, and a strong team behind the company, investors are hoping Africa Oil will replicate the success of Tanganyika Oil, which was taken over by Sinopec in a multi-billion transaction. Current Africa Oil management including CEO Keith Hill and CFO Ian Gibbs were instrumental in that success, and in Africa Oil being the number one firm on the TSX last year.

If acreage is royalty, with 250,000 km2 of gross exploration, several successes under its belt, and another 20 wells to drill in the next year, Africa Oil truly is a King.