Africa Oil Puntland Drilling Update

Posted by on Aug 18, 2011 | 12 Comments

(“Africa Oil” or the “Company”) is pleased to provide an update on drilling operations related to the two-well exploration program in the Dharoor Valley Block, located in Puntland (Somalia).

Drilling locations have been selected over two robust prospects targeting gross best estimated prospective resources of over 300 million barrels each, based on internal estimates. A contract has been awarded to Sakson Drilling and Oil Services who will provide a 1,500 horse-power, top drive equipped rig. The majority of the drilling-related third party service contracts have been entered into and all outstanding service contracts are expected to be completed before the end of August.

The Company is actively engaged in sourcing drilling related materials and early stage logistics including drill site and ingress route construction. A contract has been signed with a water well drilling company and water well drilling will commence in early September. Mobilization of required personnel and equipment is planned to allow for spud of the Shabeel-1 well during the fourth quarter of this year.

The Puntland Government and Dharoor Valley communities are fully supportive of the drilling project and have ensured they will do all that they can to allow the project to move forward safely and expeditiously.

Please refer to the Company’s press release dated August 11, 2011, detailing a proposed transaction whereby the Company will transfer its interests in the Puntland production sharing contracts to Denovo Capital Corp. (“Denovo”). Assuming completion of the transaction and related financing, it is anticipated the Company will own approximately 50% of Denovo. A private placement of CAD$40.9 million has been closed by Denovo subject to final TSX Venture Exchange approval of the transaction which will allow the new combined company to fully fund the upcoming two well program.

Keith Hill, Africa Oil’s President and Chief Executive Officer, commented, “We are very pleased to have signed a drilling rig contract and to have procured the required services to allow us to commence drilling operations in Puntland. With support from the local communities and Puntland Government, we are eager to drill the first exploration wells in Puntland in over 20 years, aimed at unlocking the resource potential of the area.”

Africa Oil Corp. is a Canadian oil and gas company with assets in Kenya, Ethiopia and Puntland (Somalia). Africa Oil’s East African holdings are in within a world-class exploration play fairway with a total gross land package in this prolific region in excess of 300,000 square kilometers. The East African Rift Basin system is one of the last of the great rift basins to be explored. New discoveries have been announced on all sides of Africa Oil’s virtually unexplored land position including the major Albert Graben oil discovery in neighbouring Uganda. Similar to the Albert Graben play model, Africa Oil’s concessions have older wells, a legacy database, and host numerous oil seeps indicating a proven petroleum system. Good quality existing seismic show robust leads and prospects throughout Africa Oil’s project areas. The Company is listed on the TSX Venture Exchange and on First North at NASDAQ OMX-Stockholm under the symbol “AOI”.

FORWARD-LOOKING STATEMENTS

Certain statements made and information contained herein constitute “forward-looking information” (within the meaning of applicable Canadian securities legislation). Such statements and information (together, “forward looking statements”) relate to future events or the Company’s future performance, business prospects or opportunities. Forward-looking statements include, but are not limited to, statements with respect to estimates of reserves and or resources, future production levels, future capital expenditures and their allocation to exploration and development activities, future drilling and other exploration and development activities, ultimate recovery of reserves or resources and dates by which certain areas will be explored, developed or reach expected operating capacity, that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.

All statements other than statements of historical fact may be forward-looking statements. Statements concerning proven and probable reserves and resource estimates may also be deemed to constitute forward-looking statements and reflect conclusions that are based on certain assumptions that the reserves and resources can be economically exploited. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions) are not statements of historical fact and may be “forward-looking statements”. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Company believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. The Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by applicable laws. These forward-looking statements involve risks and uncertainties relating to, among other things, changes in oil prices, results of exploration and development activities, uninsured risks, regulatory changes, defects in title, availability of materials and equipment, timeliness of government or other regulatory approvals, actual performance of facilities, availability of financing on reasonable terms, availability of third party service providers, equipment and processes relative to specifications and expectations and unanticipated environmental impacts on operations. Actual results may differ materially from those expressed or implied by such forward-looking statements.

ON BEHALF OF THE BOARD

Keith C. Hill, President and CEO

Africa Oil’s Certified Advisor on First North is E. Ohman J:or Fondkommission AB.

Source: www.marketwatch.com

12 comments

  1. Yusuf Arab says:

    I was very happy when i was hear oil exploration puntland and also expecting to successed.

  2. Engineer, Mohamed Ismail Samatar says:

    Dear Sir/Madam;

    I am very pleased your job, but the environemtal situations be awared due to the side effect of oil and gas in developing countries, Thak you again

    Mohame Samatar.

  3. mohamed says:

    I am very happy that I heard soon somali people will become rich,. complement thanks inshallah

  4. farah isse mohamud says:

    DEAR SIR

    I AM VERY PLEASED YOUR JOB,BUT THE ENVIRONEMENT SITUATIONS BE AWERED DUE TO THE SIDE AFFECT OF OIL AND GAS DEVELOPING COUNTRIES, THANK YOU AFRICAN OIL AND WALCAME PUNTLAND STATE

  5. Somali says:

    Wow waa guul mardhow waanala tuugsanayaa itoobiyaanka iyo keenyaatiga waan ka aarsanaynaa

  6. aden says:

    well, it looks like, that we punts would benefit our resources most,but what about the rest of the Somalis?.
    how do we deal with them?, would they remain bystanders?,would they get their fair share of the resources?,or do we have to force all those non punts out of the country (punt-land)?.

    at the end of the day, benefits would only be exclusive for the top elite.

    Note:
    don’t be upset this is my pint of view and have your say.

  7. guuriye says:

    peace all of you brothers & sisters i would like to thank stt well done guys,and i hope punt oil would be beneficial to all Somalis and change the game we have been struggling more than 20 years Somalia Somalia Somalia bingo……….

  8. Lindsay Armstrong says:

    As a investor in one of the partners in this oil exploration of Puntland I would like to send my best wishes to all the residents of Puntland and wish them a prosperous future based on their countries natural resource.
    The whole world is watching how the drilling is proceeding and I am sure that the profits that will come to your country will benefit all the citizens not just the elite.

  9. Bashir Salah says:

    inshaallah this would be good for all somalis including somali land becausr they are somalis too thank god and the drilling compony

  10. Thanks , I have recently been searching for info approximately this topic for a long time and yours is the greatest I have came upon till now. However, what concerning the conclusion? Are you sure concerning the source?|What i don’t realize is in truth how you’re no longer really much more smartly-preferred than you may be now. You’re so intelligent.

  11. jim peters says:

    Africa Oil – Somalia,DiscloseTruthTV
    17th Feb
    http://www.directorstalk.com/?s=africa+oil

  12. Mohamoud Mohamed Abdirahman says:

    Dear sir / madams…

    I am very glad to visit yours web and to receive this information
    about this updating, and it seems good news and this company makes so much care and contribution for all the community as well as for building hospitals as Ufayn regional hospital with modern standard,
    and several schools and institutes.
    And also they were made so much job creating to youth including me.
    I am saying nice returning and warm welcoming.

    MOHAMOUD MOHAMED.
    Representative for logistics
    of SPRINT OIL & GAS SERVICES in Somalia.

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