Africa Oil Corp: Kenya Resource Base Increases

Africa Oil Corp. announced Tuesday that estimated gross 2C unrisked resources in Kenya’s South Lokichar Basin have increased by 150 million barrels, or 24 percent, to 766 million barrels of oil, according to an independent assessment completed by DeGolyer and MacNaughton Canada Limited (DMCL).

The largest share of resources falls within the Ngamia field, with unrisked gross 2C estimates of 296.7 million barrels. The Amosing and Ekales fields are believed to hold 151.1 and 104.5 million barrels, respectively. Africa Oil Corp holds a 50 percent working interest in all three prospects, which have an 86 percent chance of commerciality, according to DMCL’s report.

The latest resource update in South Lokichar follows Tullow’s announcement Apr. 28, which stated that the group’s recently concluded appraisal campaign and initial assessment in Kenya indicated recoverable resources of up to 750 million barrels of oil in the basin.

“DMCL's independent assessment confirms a significant increase in contingent resources for the South Lokichar Basin in Northern Kenya,” said Africa Oil Corp President and CEO Keith Hill in a company statement.

“Based on the continuing drilling and testing program over the past year our best estimate is now that the company's discoveries in the South Lokichar Basin contain gross unrisked contingent resources of 766 million barrels of oil, an increase of 24 percent on previous estimates, and may contain as much as 1.63 billion barrels of gross oil contingent resources (3C estimate), an increase of 26 percent. The level of these resources gives us confidence that we will exceed the threshold required for development and we continue to push forward for development sanction during 2017," he added.

In a brief research note sent to Rigzone, FirstEnergy revealed that the market reaction to the resource increase was “good news” but warned that Africa Oil needed to take its overall discovered resources to 800 million barrels “by July 2018” to unlock $200 million of its carry from partner Maersk. FirstEnergy stated that this development is now “likely” given that they are only 34 million barrels away from target and emphasized that the 86 percent chance of commerciality on many of the fields was also “good”.

A graduate in journalism from Cardiff University, Andreas has eight years of experience as a business journalist. Email Andreas at andreas.exarheas@rigzone.com

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