Africa Oil (AOI:TSXV) has continued its extraordinary success in Kenya with the discovery of two new large oil fields in their most recent two exploration wells. The discovery of these two new fields make it seven discoveries in seven exploration wells in Kenya. A perfect record. Although we have seen that the oil industry is doing well, some of the accidents that happen within this industry do not go unnoticed. If you are someone who has suffered from an oil field injury, with the law offices of Flores, Tawney, and Acosta, P.C., there shouldn’t be any excuses as to why seeking help is something you would put off.
The Amosing-1 and Ewoi-1 wells in block 10BB (50% Africa Oil, 50% operator is Tullow Oil PLC) were drilled in the South Lokicahr basin in northern Kenya. The Amosing-1 well was drilled 7km SW of the Ngamia discovery and the Ewoi-1 well was drilled 4km to the east of Etuko-1.
The Amosing-1 well intersected a potential net pay zone of 160-200m which is significantly larger than the company expected. The Ewoi-1 well encountered 20-80m of net oil pay and continues to develop the eastern flank of the basin. Both wells will be suspended for future flow testing and the two rigs will move to drill the Emong-1 prospect and the Twiga South-2 appraisal well, both on block 13T
Keith Hill, President and CEO of Africa Oil, commented: “The continued success of our exploration program in northern Kenya will allow us to drive development plans forward with greater certainty. Given that we have now had a 100-per-cent success rate on exploration prospects in the basin, we expect to see more growth in resources and more discoveries as our aggressive drilling program unfolds in 2014. In addition, the several new analogous basin-opening wells being drilled during this program also have the potential to bring a step change in company valuation upon success.”
Africa Oil also updated the market on its well testing activities at the Etuko-1 and Ekales-1. Etuko-1 has begun well testing and is expected to finish by the end of January and the Ekales-1 well testing should begin soon.
The company continues to drill on the El Kuran discovery in Ethiopia and is expected to reach its target depth of 3,500m by the end of Q1/2014. Also in Ethiopia, Africa Oil expects the Sala-1 well in the South Omo block to spud in February and the Shimela-1 well iblock 9 in Kenya to spud in April.
The previously planned Paipai well has been cancelled and Tullow and Afren (50% operator and 20%, respectively) have elected not to continue the next exploration phase in block 10A. The partnership is concerned over its economic viability.
The company was sitting on $130 million in cash as of the third quarter, but then the company completed a $450 million financing (one of the largest done on the TSX-Venture), so Africa Oil is in a strong financial position to continue its aggressive drill program in the East African Rift Basin. The company expects their cash position to last them until, at least, mid-2015.
The company still has 100 undrilled targets, including a number of basin opening discovery wells and is planning to drill +20 wells in 2014. They currently have seven rigs turning; five in Kenya and two in Ethiopia.