Africa Oil signs farmout for Kenyan, Ethiopian blocks

Africa Oil Corp. has announced a farmout agreement with East Africa Exploration Ltd. (EAE), a unit of Black Marlin Energy Ltd., for their entry into the production-sharing contracts in Ethiopia and Kenya.

Jun 4th, 2009

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, June 4 -- Africa Oil Corp. has announced a farmout agreement with East Africa Exploration Ltd. (EAE), a unit of Black Marlin Energy Ltd., for their entry into the production-sharing contracts in Ethiopia and Kenya.

In Ethiopia, Africa Oil said it will transfer a 30% license interest to EAE in Blocks 2/6 and 7/8, which both lie in what Africa Oil calls "the highly underexplored" Ogaden basin of southern Ethiopia.

In Kenya, Africa Oil will transfer a 20% license interest to EAE in prospective Block 10A, which is in northern Kenya's Anza basin.

In both cases, EAE will pay a disproportionate share of costs associated with the planned 2D seismic data programs to be carried out in 2009-10 as well as paying a portion of Africa Oil's past costs and future operational costs, Africa Oil said.

Africa Oil also said it has executed a seismic contract with Upstream Petroleum Services Ltd. to undertake the seismic acquisition in both Ethiopia and Kenya. Africa Oil remains operator of all blocks associated with the transaction.

The farmout transaction also is subject to approvals of the appropriate regulatory authorities from the governments of Ethiopia and Kenya, in addition to a waiver of preemptive rights by an existing partner in the Ethiopian licenses.

Contact Eric Watkins at hippalus@yahoo.com.

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