President and CEO of Africa Oil - Keith Hill

President and CEO of Africa Oil - Keith Hill

Africa Oil (AOI:TSXV) announced its second quarter results and an update on exploration and operations. The company expects to have a fourth Tullow Oil and Africa Oil JV rig drilled and tested on the 10BB and 13T Blocks in Kenya in October 2013. AOI has also secured a fifth rig for Block 9 in Kenya which it anticipates to commence drilling in September 2013. Keith Hill et al expect to leave 2013 with 10 exploration wells and to have four wells tested. Twiga South 1 and Ngamia-1 wells were tested and showed to have 5,000bpd potential and to have doubled the company’s estimates of total net pay. Between these two wells, AOI spudded its Ekales-1 well in July and expects to reach target depth by the end of September.

Keith Hill, President and CEO of Africa Oil, commented: "Africa Oil is very encouraged with the results of our first three exploration wells in the Lokichar basin. Our fully funded 2013 work program is focused on drilling and testing multiple wells in the Lokichar subbasin in Kenya in an effort to reach commercial thresholds and on drilling multiple potential basin-opening wells across its vast East African exploration acreage."

News Release: Africa Oil Announces Second Quarter Results and Provides Update

On the exploration front, AOI has been very successful and in July they announced a new major oil discovery at their Etuko-1 well. The well encountered 40m of additional potential net oil pay and will be tested later this year. In Ethiopia, the company confirmed the presence of a good hydrocarbon system with heavy oil and gas shows at the Sabisa-1 well on the South Omo Block (the most northerly well drilled on the Tertiary rift trend to date). They expect this Ethiopian well to be spudded by the end of August.

AOI and its partners have experienced some challenges and finished drilling the Paipai-1 well which they were incapable of testing and has been temporarily suspended. As a result of the Paipai-1 well, AOI did find two other major oil prospects on trend with the South Sudan oil fields; Bahasi-1 and Sala-1 wells which have large volume potential and are expected to be spudded in September.

The company ended the quarter with $179.5 million in cash and $141.2 million in working capital.

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President and CEO of Africa Oil - Keith Hill