Africa Oil Corp. is pleased to provide the following update on activities in the South Lokichar basin (Blocks 10BB and 13T in Kenya). AOC has a 25% working interest in Blocks 10BB and 13T with Tullow Oil plc (50% and Operator) and Maersk Olie og Gas A/S (25%) holding the remaining interests (collectively, the "Joint Venture Partners").
The Joint Venture Partners have proposed to the Government of Kenya that the Amosing and Ngamia fields be developed as the initial stage of the South Lokichar development. This phase of the development is planned to include a 60,000 to 80,000 barrels of oil per day (bopd) Central Processing Facility (CPF) and an export pipeline to Lamu, some 750 kilometers from the South Lokichar basin on the Kenyan coast. This approach is expected to bring significant benefits as it enables an early Final Investment Decision (FID) of the Amosing and Ngamia fields taking full advantage of the current low-cost environment for both the field and infrastructure development, as well as providing the best opportunity to deliver first oil in a timeline that meets the Government of Kenya expectations. The installed infrastructure can then be utilized for the optimization of the remaining and yet to be discovered South Lokichar oil fields, allowing the incremental development of these fields to be completed in an efficient and low cost manner post first oil.
The initial stage is planned to include 210 wells through 18 well pads at Ngamia and 70 wells through seven well pads at Amosing, with a planned plateau rate of 60,000 to 80,000 bopd. Additional stages of development are expected to increase plateau production to 100,000 bopd or greater. It is anticipated that Front End Engineering and Design (FEED) for the initial stage will commence in 2018, with FID targeted for 2019 and first oil in 2021/22.
A total of six appraisal wells have been drilled at the Amosing field, ten at Ngamia, three at Etom and two at Ekales. Additionally, extended well tests, water injection tests, well interference tests and water-flood trials have been undertaken, all of which have proved invaluable for planning the development of the oil fields. Tullow Oil plc has released (February 7, 2018) their updated assessment of resources in the South Lokichar basin. Details of Africa Oil's most recent independent assessment of contingent resources in the South Lokichar basin are contained in the Company's press release dated May 10, 2016. The Company intends to have an updated independent resource evaluation in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101") completed following the completion of the water injectivity and associated production testing planned for the first half of 2018.
Early Oil Pilot Scheme (EOPS)
An agreement between the Joint Venture Partners and the Government of Kenya was signed on March 14, 2017 allowing all EOPS upstream contracts to be awarded. Initial injectivity testing has started at Ngamia-11 and oil production and water injection facilities are being constructed in the field, which are expected to be ready to commence production/injection in the first quarter of 2018. Oil produced is being initially stored until all necessary consents and approvals are granted and work is completed for the transfer of crude oil to Mombasa by road.
Africa Oil CEO Keith Hill commented, "We are pleased that the Joint Venture has now agreed on an optimized plan to move forward with the South Lokichar Basin development, which will allow acceleration of a crude export pipeline through Northern Kenya. This development will set the stage for additional exploration, appraisal and development, unlocking the vast resources contained within the basin."
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