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Africa Oil Corp's Kenya Test Wells Flow 4,300 BOPD

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Africa Oil Corp. has provided the following update on its operations in Kenya.

Kenya

• During the second quarter of 2015, activities were focused on the appraisal of the South Lokichar basin to test the extent of previous discoveries and gain important reservoir data for the field development plans.
• A number of Extended Well Tests (EWTs) have been completed at the Amosing field, and preparations are advanced for the Ngamia field EWTs which are due to commence in August. The Amosing-1 and Amosing-2 wells were completed in five separate zones and 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. Water injection tests are under way to further validate the viability of water flood reservoir management and the oil recovery assumptions.
• Preparations are now well advanced for the Ngamia field EWTs which are due to commence in August. In preparation for the Ngamia EWTs, multi zone completions have been installed in the Ngamia-8, Ngamia-3 and Ngamia-6 wells and clean-up flow testing has been completed. The Ngamia EWT flow test will be followed by water injection testing. Elsewhere in the South Lokichar basin, Ngamia-9, an appraisal well for this field, was completed in July 2015 and encountered between 90 metres and 110 metres of net oil pay in the Lokone and Auwerwer horizons.
• All of the appraisal work to date is strongly underpinning the Company's Gross Contingent Resources estimated range (2C and 3C) of between 616 and 1290 mmbo. This estimate was completed by independent third party resource evaluators in 2014 (see news release dated September 16, 2014) and is expected to be updated in the fourth quarter of this year. The results have also identified additional prospective upside in the basin.
• A one rig operation will continue with the drilling of the Twiga-3 well, which is currently underway, followed by the large Amosing North prospect (Amosing-5) located on the northern flank of Amosing and updip of the Ngamia field (that was identified from the 3D seismic). The Cheptuket exploration well in Block 12A is scheduled to commence in October 2015 and will test a basin bounding structural closure in the Kerio Valley Basin in a similar structural setting to the successful Ngamia and Amosing discoveries. Other wells under consideration include Etom North (an appraisal well to follow up on our success at Etom-1) and Tausi (a basin opening well).
• In parallel with the exploration and appraisal program, pre-FEED (Front End Engineering and Design) studies are being progressed for entry in to FEED.

Development

• In Kenya discussions are under way with the Government regarding the submission of a draft Field Development Plan for the discoveries in the South Lokichar basin. Initial discussions are progressing positively and continued engagement is expected on this issue in the coming months.
• Progress on the East African pipeline route to export oil from Lake Albert in Uganda and the South Lokichar Basin in Kenya has gained pace in recent months. The Governments of Uganda and Kenya are working closely together and the pipeline studies undertaken by a joint Government-appointed independent technical consultant have progressed well. The Government's decision on the pipeline route is expected in the third quarter 2015. The overall ambition is to achieve a combined project sanction of the export pipeline and Kenya upstream projects by the end of 2016.