Africa Oil Corp. has announced that it has completed the previously announced farmout with Maersk Olie og Gas A/S (Maersk) related to Kenyan Blocks 10BB, 13T and 10BA
At completion, Africa Oil received US$427mn from Maersk. This amount represents US$344mn of reimbursed past costs incurred by Africa Oil prior to the agreed 31 March 2015 effective date of the farmout and US$83mn representing Maersk's share of costs incurred between the effective date and 31 December 2015, including a carry reimbursement of US$15mn of exploration expenditures. An additional US$75mn development carry may be available to Africa Oil upon confirmation of existing resources, which is expected to take place in the first quarter of 2016. Upon final investment decision, Maersk will be obligated to carry Africa Oil for an additional amount of up to US$405mn depending on meeting certain thresholds of resource growth and timing of first oil.
The resulting interests in each of Africa Oil's Kenyan blocks are as follows:
Kenya Block 10BB: Africa Oil - 25 per cent. Maersk - 25 per cent. Tullow - 50 per cent*
Kenya Block 13T: Africa Oil - 25per cent. Maersk - 25 per cent. Tullow - 50 per cent*
Kenya Block 10BA: Africa Oil - 25 per cent. Maersk - 25 per cent. Tullow - 50 per cent*
Kenya Block 12A: Africa Oil - 20 per cent. Tullow - 65 per cent*. Marathon - 15 per cent.
Kenya Block 9: Africa Oil - 50 per cent* Marathon - 50 per cent.
The farmout of 50 per cent of Africa Oil's interest in the Rift Basin and South Omo Blocks remains subject to Ethiopian government approval, which is expected in the near term. At completion of the Ethiopian portion of the Maersk farmout the respective working interests in each of Africa Oil's Ethiopian blocks will be as follows:
Ethiopia Rift Basin Africa Oil: - 25 per cent* Maersk - 25 per cent Marathon - 50 per cent
Ethiopia South Omo Africa Oil: - 15 per cent Maersk - 15 per cent Tullow - 50 per cent* Marathon - 20 per cent
Keith Hill, Africa Oil's CEO, commented, "We are very pleased to have completed the Kenyan portion of our farmout to Maersk. We feel Maersk will be an excellent partner in terms of technical and financial strength and experience critical to moving the development project forward. This transaction puts Africa Oil in the enviable position of not requiring any additional equity financing prior to first oil and will allow us to weather the current difficult oil price environment should it continue into 2016."