Africa Oil Completes Ethiopia Farm-Out Agreement

Africa Oil Corp. on Friday reported it has completed the previously announced farmout agreement with New Age (African Global Energy) Limited whereby New Age acquired an additional 25 percent interest in Africa Oil''s Blocks 7 & 8 in Ethiopia, together with operatorship of Blocks 7 & 8 and the Adigala Area. In consideration of the assignment of the interest New Age paid Africa Oil $1.5 million in consideration of past costs. Following the completion of the New Age farmout transaction, New Age will be operator with 40 percent interest. Africa Oil and Afren plc will each hold 30 percent.

Keith Hill, Africa Oil''s president and CEO, stated, "We are very pleased to have completed this farmout to New Age, an existing partner in our Ethiopian exploration program. We look forward to working together to expand on the success we have had in our East Africa exploration program to date. Africa Oil looks forward to commencing drilling operations in Ethiopia, with the Sabisa-1 well which is planned to be spud before the end of the year in the South Omo Block. Tullow Oil plc holds a 50 percent working interest and operates the South Omo Block with Africa Oil holding the remaining 50 percent interest. East Africa is rapidly becoming the most prospective oil and gas province in the world and the large, strategic land portfolio we hold ensures we will be at the center of industry activity."

In addition, the company reports that it expects to announce drilling results from the Twiga South-1 well, currently being drilled in Block 13T, in early to mid-November. Announcement of these results has been slightly delayed due primarily to minor mechanical issues on the drilling rig, which have now been addressed. The well is now drilling ahead. The Twiga South-1 well is operated by Tullow. Africa Oil and Tullow each hold 50 percent working interests in the block.


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