Africa Oil Updates Project Oil Kenya with a Higher Plateau Production Rate and an Independent Resource Evaluation

Posted on : Thursday , 16th September 2021

Africa Oil and its JV partners (Tullow Oil and Total Energies) have completed the redesign of Project Oil Kenya over the last year to guarantee that it is technically, financially, and environmentally sound. With a projected gross oil recovery of 585 million barrels of oil ("MMbbl") during the life of the field1, a higher oil production plateau of 120,000 barrels per day is now planned. This resource position has been audited by external independent auditor, Gaffney, Cline & Associates ("GaffneyCline"). Africa Oil's best (2C) development pending contingent resource on a net working interest basis, derived from GaffneyCline's report is 93 MMbbl2. The estimated unrisked3 post-tax net present value, using a 10% discount rate ("NPV10"), of $577 million is attributable to Africa Oil's net 2C development pending contingent resource base.

Africa Oil and its JV Partners have presented a draught Field Development Plan ("FDP") to the Government of Kenya ("GoK"), with the intention of submitting a finalised FDP by the end of 2021, in accordance with the GoK's December 2020 licence extension criteria. Africa Oil and its JV Partners continue to work collaboratively with the GoK on land and water access and on the necessary commercial agreement and are waiting on the final approval of the Environmental and Social Impact Assessment ("ESIA") from the regulatory authorities.

Africa Oil and its JV Partners are actively seeking strategic partners for the project at the same time. Africa Oil believes that, based on the updated plan, this project offers a good commercial possibility for investors wishing to get into the East African oil and gas sector, both upstream and midstream. It is intended that a strategic partner will be secured ahead of a Final Investment Decision ("FID").

Keith Hill, President and CEO of Africa Oil, commented on the resource statement: "Together with our JV partners we have made significant progress in redesigning and optimizing Project Oil Kenya. Compared to the previous field development plan, we have a more economically robust project, which I am confident is more attractive to potential new partners. We will continue to work with our JV partners and the government of Kenya towards the final investment decision and I am pleased that our interests are fully aligned on what is a strategically significant project for Kenya.