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2016-02-29

AFRICA OIL 2015 FOURTH QUARTER FINANCIAL AND FULL YEAR FINANCIAL AND OPERATING RESULTS

Africa Oil Corp.
Financial Statement Release

AFRICA OIL 2015 FOURTH QUARTER FINANCIAL AND FULL YEAR FINANCIAL AND OPERATING
RESULTS

February 26, 2016 (AOI–TSX, AOI–Nasdaq-Stockholm) … Africa Oil Corp. (“Africa
Oil” or the “Company”) is pleased to announce its financial and operating
results for the three months and year ended December 31, 2015.

Subsequent to December 31, 2015, the Company completed its previously announced
(November 9, 2015) farmout transaction with Maersk Olie og Gas A/S, a Danish
oil and gas company owned by the Maersk Group (“Maersk”) whereby Maersk
acquired 50% of Africa Oil’s interests in Blocks 10BB, 13T and 10BA in Kenya
and the Rift Basin and South Omo Blocks in Ethiopia in consideration for
reimbursement of a portion of Africa Oil’s past costs and a future carry on
certain exploration and development costs.

To date, $439.5 million of farmout related proceeds have been received from
Maersk: $350 as reimbursement of past costs incurred by the Company prior to
the agreed March 31, 2015 effective date and $89.5 million representing
Maersk's share of costs incurred between the effective date and December 31,
2015, including a carry reimbursement of $15MM related to exploration
expenditures.

An additional $75 million development carry may be available to Africa Oil upon
confirmation of existing resources. An updated assessment of contingent
resources is currently ongoing. Upon Final Investment Decision ("FID"), Maersk
will be obligated to carry Africa Oil for an additional amount of up to $405
million depending on meeting certain thresholds of resource growth and timing
of first oil.

At December 31, 2015, the Company had cash of $104.2 million and working
capital of $49.5 million. During 2015, the Company completed several private
placements for gross proceeds of $275 million. During the fourth quarter of
2015, as a result of exploration results to date and current oil industry
environment, the Company wrote off $70.7 million of capitalized intangible
exploration assets relating to Ethiopia. The remaining carrying value of the
intangible exploration assets in Ethiopia is $18.4 million.

The Company has completed the following significant operational activities
during the fourth quarter and to date in 2015:

-- A draft Field Development Plan was submitted to the Government of Kenya in
December and will inform discussions as we progress towards potential FID
of the South Lokichar development project. Preparation for Front End
Engineering and Design (“FEED”) is under way. Scoping studies and terms of
reference for the detailed upstream environmental and social impact
assessments were submitted to the regulatory authorities.

-- ?
In August 2015, a bilateral agreement was reached between the Presidents of
Uganda and Kenya adopting the Northern Kenya route for the regional crude
oil pipeline, subject to certain conditions. Africa Oil continues to
support both countries in moving this project forward as quickly and
efficiently as possible taking into account the needs of all stakeholders.

-- ?
During the first half of 2015, in preparation for Extended Well Tests
(“EWTs”), the Amosing-1 and Amosing-2A wells were successfully completed in
five separate zones. Initial rig-less flow testing during clean-up flowed
at a cumulative maximum rate of 5,600 and 6,000 bopd, respectively. These
results exceeded expectations, and demonstrated high quality reservoir
sands which flowed 31 to 38 degree API dry oil under natural conditions.
During the test, the wells produced at a cumulative average constrained
rate of 4,300 bopd under natural flow conditions. Pressure data from the
two wells supports significant connected oil volumes and confirms lateral
reservoir continuity, which is positive for the future development. A
cumulative volume of 30,000 barrels of oil has been produced into storage.

-- ?
During the second half of 2015, the Ngamia EWT production phase was
completed with approximately 38,000 barrels of oil produced. Five completed
zones of the Ngamia-8 production well were tested individually at a
cumulative rate of 2,400 bbl/d and all except the lowest zone produced
without artificial lift. Communication between the producer well and an
observation well, at a distance of approximately 500 meters, was also
demonstrated.

-- ?
Multiple appraisal wells were drilled during 2015 in the South Lokichar
Basin, concentrated in the Amosing and Ngamia oil fields.

-- ?
During the fourth quarter of 2015, the Etom-2 well was drilled in an
undrilled fault block adjacent to the Etom oil discovery in Block 13T. The
well encountered 102 meters of net oil pay in two columns. The objective of
the well was to explore the north flank of the Etom structure in an
untested fault block identified by recent 3D seismic. Oil samples, sidewall
cores and wire line logging all indicate the presence of high API oil in
the best quality reservoir encountered in the South Lokichar Basin to date.
Discovering this thick interval of high quality oil reservoirs further
underpins the development options and resource base. The result follows
careful evaluation of 3D seismic data which was shot after the Etom-1 well
and demonstrates how the partnership has improved its understanding of the
South Lokichar Basin. This result also suggests significant potential in
this underexplored part of the block as it is the most northerly well
drilled in South Lokichar and is located close to the axis of the basin
away from the basin-bounding fault. Accordingly, Tullow and Africa Oil will
review the potential of the greater Etom area and neighbouring prospects to
decide on the forward program.

-- ?
Outside of the South Lokichar Basin frontier exploration activity continued
in 2015. Three potential basin opening exploration wells were drilled
across the Company’s extensive Kenyan acreage in the North Kerio (Epir-1 –
Block 10BB), North Turkana (Engomo-1 – Block 10BA) and North Lokichar
(Emesek-1 – Block 13T) Basins. While none of the wells were discoveries,
they have provided valuable data to assess the wider prospectivity of the
basins. There is significant remaining exploration potential in the basins
outside of South Lokichar and future basin opening exploration drilling
plans are currently being evaluated.

-- ?
Following Etom-2, the PR Marriott Rig-46 moved to Block 12A in Kenya where
it is currently drilling the Cheptuket-1 exploration well, the first well
to be drilled in the Kerio Valley Basin.

-- ?
The full fast track processed data set for the 951 square kilometer 3D
seismic survey over the series of significant discoveries along the western
basin bounding fault in the South Lokichar Basin, is being interpreted. The
3D seismic indicates significantly improved structural and stratigraphic
definition and additional prospectivity not evident from the 2D seismic.

-- ?
Over 1,100 meters of whole core has been obtained from the wells drilled in
the South Lokichar Basin and an extensive program of detailed core analysis
is ongoing. A key focus of the core program is to better assess oil
saturation and to refine the recovery factors of the main reservoir sands.
Core analysis results support the reservoir assumptions used in the
contingent resource estimate and support the view of oil saturations in the
reservoir.

-- ?
In the Rift Basin Area, the Government of Ethiopia has granted a twelve
month extension to the initial exploration period, which will now expire in
February 2017. A 2D seismic crew program was completed of approximately
600 kilometers of land and lake seismic during 2015. Source rock outcrops
and oil slicks on the lakes have been identified in the block where there
was previously no existing seismic or wells.

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For the complete release and report see attached file.

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Författare SSE

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