Africa Oil Closes First Tranche of Private Placement

Africa Oil has closed the first tranche of the previously announced private placement. A total of 35,734,228 subscription receipts have been issued to subscribers in consideration for Cdn $33,947,516. The second tranche for aggregate gross proceeds totaling up to Cdn $35.5 million is expected to close shortly. The underlying common shares of the subscription receipts issued in the first tranche are subject to a four month hold period expiring on August 21, 2009.

The net proceeds of the private placement will be used to finance the operations of the portfolio of East African oil exploration projects to be acquired from Lundin Petroleum as well as for general working capital purposes. If the acquisition is not completed on or before June 15, 2009, the subscription receipts shall be automatically redeemed by the Company at a price equal to the price paid by the holder plus accrued interest.

A 5% finder's fee may be payable on all or a portion of the private placement. The foregoing transactions are subject to all requisite regulatory, government and shareholder approval as required.


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