Africa Oil Inks Agreement for Lion Shares

Africa Oil has signed a definitive agreement with Lion to acquire all of the issued and outstanding shares of Lion.

Pursuant to the agreement with Lion, Africa Oil will acquire, by way of a plan of arrangement, all of the issued and outstanding shares of Lion in consideration for 0.20 Africa Oil shares for each common share of Lion. Any options or warrants to purchase common shares of Lion that are outstanding on completion of the acquisition will be replaced or amended to entitle the holder to acquire common shares of Africa Oil, with the number of shares to be acquired and the exercise price each adjusted to reflect the ratio of 0.20 shares of Africa Oil for each 1.0 share of Lion.

Lion is a joint venture partner of Africa Oil in Kenya and Puntland (Somalia).

Keith Hill, Africa Oil's President and Chief Executive Officer, commented, "The acquisition of Lion consolidates our interests in the East African rift basins in Kenya and Puntland (Somalia). The cash portion of the deal will further strengthen our balance sheet to allow us to fully fund the upcoming aggressive exploration drilling campaign."