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An Oil Pioneer of Onshore East Africa
Corporate PresentationMay, 2014
A Lundin Group Company
A FRONTIER EXPLORATION SUCCESS STORY
• Size Does Matter– Secured exploration area the size of the entire North Sea – First Mover Advantage
– Brought in strong partners to fund and collaborate on exploration program (Tullow, Marathon)
– Identified 11 new rift basins, most of which have multi-billion barrel potential– Identified 11 new rift basins, most of which have multi-billion barrel potential
• High intensity, high impact exploration program adds value– Extensive seismic programs unlock potential of all basins
– Drilled 7 consecutive discoveries in South Lokichar Basin
– Over 600 MMBO contingent resources discovered to date as estimated by Operator*
• The best is yet to come– Over 100 leads and prospects identified– Over 100 leads and prospects identified
– Six new basin opening wells to be drilled in next 12 months
– Seven rigs currently operating, with at least six rigs full time for foreseeable future
2
*Tullow is LSE listed and therefore does not report resources in accordance with NI51-101. Please refer to Africa Oil’s press release dated September 3, 2013 for
details of the prospective and contingent resources by prospect and lead, including the geologic chance of success.
THE NEXT NORTH SEA?
Lokichar Basin Confirmed as major oil province– 11 more basins and 100+ prospects to go
North Sea Reserves:60+ BBO
Exploration Wells: 2,408
Tertiary/Cretaceous Rifts Unrisked Gross Best Estimate of Prospective Resources 23 BBO1
Exploration Wells: Tertiary: 11, Cretaceous: 12
3100 km
1Please refer to Prospective and Contingent Resources slide detailing specific contingencies relating to the classification of resources and cautionary statements.
100 km100 km
2014 PROGRAM GOALS
• Continue to add resources and de-risk South Lokichar Basin– Drill out remaining prospect inventory
– Appraise existing and future discoveries with aid of new 3D seismic
– Update third party resource report in early 2nd quarter to include new discoveries at Agete, Ekales, Amosing and Ewoi – include appraisal drilling and test results from 1st quarter
– Initiate Extended Well Test (EWT) at Twiga field to confirm reservoir properties
• Open up at least one new basin– Drilling to commence on three of the six new basin targets in the first half of 2014
– Seismic programs planned to be completed in at least four future target basins
• Move forward aggressively on development project
4
• Move forward aggressively on development project– Working closely with Kenyan government on infrastructure projects with focus on pipeline
– Joined consortium to develop plans for joint Kenya – Uganda export pipeline project
– Initiated Environmental and Social Impact Assessment (ESIA) studies and Front End Engineering Design (FEED) studies on pipeline and facilities projects
– Goal is to have project sanction by end of 2015 / early 2016
Local Employment and Contracts
• Ensure a transparent process for awarding local contracts and hiring local staff – community involvement critical
Capacity Building
• Opening new local vocational training center
STEP UP COMMUNITY ENGAGEMENT
• Opening new local vocational training center
• Build on needs assessment study to match current local training capabilities, suggested enhancement and employment requirements
• Establish an entrepreneurial advisory panel to assist locals to create new businesses required to support oil development projects
• Explore community based companies based on conservancy
5
model
Better Communication
• Opened 3 new offices in Turkana to more effectively communicate ongoing operations, address grievances and manage expectations
• Better engage groups on issues such as land and water use, environmental issues, archeology sensitivity and drought relief
50
60
70
80
IMPROVE DRILLING PERFORMANCE
• Smectite clays cause hole problems with water based drilling muds, controlled with improved mud chemistry
Tullow Kenya Drilling Performance (Days/1000m – excludes testing)
Basin opening well - sidetracked
0
10
20
30
40
50• Use of synthetic-based muds will deliver
further performance improvement (Twiga-2 & Ngamia-2 underway)
• Improved contracts deliver 25% cost reduction
• Reduced rig move durations
• Testing off-line with more cost efficient test rig
6
test rig
• South Lokichar basin wells now running at $12mm to $18mm untested
• New basin opening wells will be $25mm to $30mm untested due to additional rig move, civil engineering & logistics costs
Smectite in oil Smectite in fresh water in 5 minutes!
2014 Exploration
Shimela
Tullow-Operated:
Exploration:•Amosing √ (Discovery)•Ewoi √ (Discovery)
Etom
El Kuran(off map)
•Ewoi √ (Discovery)•Emong √(sub-commercial oil disc.)•Ekunyuk √(sub-commercial oil disc.)•Shimela (drilling) •Gardim•Etom•Ekosowan•Dyepa •Aze•Engomo (formerly Kiboko)
Aze
Dyepa
Engomo(formerly Kiboko)
Gardim
50 km
Sala
Bahasi
Etom
Ewoi (discovery)
AOC-Operated Exploration:•Sala (drilling)
New Age-Operated Exploration:•El Kuran-3 (appraising)
Ekunyuksubcommercial
7
Bogal
EkosowanAmosing(discovery)
Emongsubcommercial
INSET MAP
Lokichar Basin Exploration & Appraisal through 2014
2014 Wells:
•Amosing - √ Discovery
•Ewoi - √ Discovery
•Emong- √ Sub-commercialEtuko-1 (2013), TD: 3051m~40m net pay in Auwerwer & U. Lokhone
Gross Best Estimate Contingent (2C) Resources to date:368 MMBO (gross)1
1 2013 Competent Persons Report (CPR)CPR pre-dated Agete,Ekales, Amosing & Ewoi
Discoveries
Etom NorthBest-Estimate Gross Resources:Prospective : 234 MMBO
Etom North
Etom Complex – Spud 1H, 2014Best-Estimate Gross Resources:Prospective : 467 MMBO
•Emong- √ Sub-commercial
•Ekunyuk-√ Sub-commercial
•Etuko Test- √ Complete
•Twiga Appraisal (drilling)
•Ngamia Appraisal (drilling)
•Etom
•Ekosowan
~40m net pay in Auwerwer & U. LokhonePossible 50m net in Lower Lokhone
Best-Estimate Gross Resources:Contingent (2C) : 100 MMBO
Ewoi
Ekunyuk
Etom
Etuko
Ekales-1 (2013) TD:2,554m DiscoveryPre-Drill Best-Estimate Gross Prospective Resources: 234 MMBO
Twiga South-1 (2012), TD: 3227m>70m net pay: 2,812 bopd constrainedBest-Estimate Gross Resources:Contingent (2C) : 87 MMBOProspective : 132 MMBO
Agete
Twiga South
Ekales
Ewoi– Spud Q3, 2013, -DiscoveryPre-Drill Best-Estimate Gross Prospective Resources: 317 MMBO
Loperot
Agete–1 (2013): Discovery100m net pay, Sampled oilPre-drill Best-Estimate Gross Prospective Resources: 276 MMBO
Loperot-1 (Shell, 1992), TD: 2950mProspective net pay included with Ewoi estimated
Emong
8
•Ekosowan
•Agete Appraisal
•Amosing Appraisal
Seismic:
•Ngamia-Twiga 3D
(550 sqkm)
Ekosowan
Block 12A
13T
3D Outline:550 sqkm
Ngamia
Amosing
Ngamia-1 (2012), TD: 2340m>200m net pay: 3,200 BOPD constrained Best-Estimate Gross Resources:Contingent (2C) : 180 MMBOProspective :39 MMBO (Ngamia East)
10km
Amosing- Spud Q4, 2013 - DiscoveryPre-Drill Best-Estimate Gross Prospective Resources: 172 MMBO
Resource estimates are gross best estimates of “Prospective” resources from a Third Party Independent Resource Assessment, except when noted as “Contingent”. Please refer to Prospective and Contingent Resources slide detailing specific contingencies relating to the classification of resources and cautionary statements.
Ekunyuk– Spud Q2, 2014 Est. 5 m net pay, updip potential
Ekosowan, Spud Q4, 2014Best-Estimate Gross Prospective Resources: 153 MMBO
10BB
12A
Emong
Schematic Section, South Lokichar BasinMain Reservoir Types
1
21
2
9
Primary Reservoirs
Secondary/Prospective Reservoirs
Enhanced Recovery Potential:
Fracture and/or Acid Stimulation
Horizontal Drilling
1
2
1
Ekales-Twiga-Agete-Etom Prospect Area
Etom Complex
Etom NorthwestBest-Estimate Gross
Resources81 MMBOCOS: 29%
Etom NorthBest-Estimate Gross
Resources234 MMBO
COS: 21-25%Etom East
Best-Estimate Gross Resources
42 MMBOCOS: 21-25%
Enlarged Map
Etom ComplexBest-Estimate Gross
Resources467 MMBO
COS: 25-38%
Agete-1 DiscoveryPre-drill Best-Estimate Gross Resources:276 MMBO, COS: 54%
Twiga South -1 Discovery
10
Ekales-1 DiscoveryPre-drill Best-Estimate Gross
Resources: 234 MMBO, 56% COS
Depth Structure Top Auwerwer Reservoirs
5 km
Twiga South -1 DiscoveryBest-Estimate Gross Resources:Contingent (2C): 87 MMBOProspective: 132 MMBO, COS: 64%
COS: Geologic Chance of Success (%)
Resource estimates are gross best estimates of prospective resources from Third Party Independent Resource Assessment except where noted as “Contingent”. Please refer to Prospective and Contingent Resources slide detailing specific contingencies relating to the classification of resources and cautionary statements.
Ekosowan Prospect
Enlarged Map
Ekosowan
Ekosowan, Spud Q4, 2014Best-Estimate Gross Prospective
Resources: 153 MMBO
11
5km
Resource estimates are gross best estimates of prospective resources from Third Party Independent Resource Assessment except where noted as “Contingent”. Please refer to Prospective and Contingent Resources slide detailing specific contingencies relating to the classification of resources and cautionary statements.
Auwerwer
Lokhone Shale
L. Lokhone
Depth Structure: Top Lokhone Source Rock1 km
High Quality Auwerwer Reservoir
Ekales Core PlugPorosity 23.6% & Perm 13.2 Darcies
10000
100000
Auwerwer Core Data
Twiga
Ekales
Ngamia
100
1000
10000
Per
mea
bilit
y m
d
Etuko
12
12
• Porosity 15% to 30%
• Permeability 50 mD to multi Darcy
• Waxy sweet crude 25 – 38 deg API1
10
10 15 20 25 30Porosity %
Appraisal Candidates by end 2014
South Lokichar Basin Significant Discovered Resourc e Upside(Based on most recent CPR report effective July 31, 2013)
Gross Contingent Resources*
483600
800
1000
mmbo
3C
2C 851
Ngamia & Twiga South to be fully appraised by end 2014
Excludes Prospective Resource upside & recent Ekales/Agete/Amosing/Ewoi discoveries
18087 100
368
216
147 120
483
0
200
400
600
Ngamia Twiga South Etuko Total
396
220234
3D Seismic
131 This summary chart was prepared by Company management for the convenience of readers.
2 Please refer to the Company’s press release dated September 3, 2013 for details of the contingent resources by discovery.
Appraisal Plans:• Multiple appraisal wells planned through to end of
2014
• Establishment of Area of Interest (AOI) – allows coordinated exploration & appraisal activities
• 550sq km 3D seismic programme commencing in 2013
• Extended well testing to assist in proving of volum es and characterisation of reservoir quality and connectivity
EWT
EWT
3,500
4,000
mmbo
South Lokichar Basin Building World Class Resource Base
South Lokichar BasinBest Estimate Gross Contingent Resources,Gross Risked and Unrisked Prospective Resources
Exploration Candidates by end 2014
1,213
3,301
1,000
1,500
2,000
2,500
3,000
3,500 Drilling program to end 2014
accesses 60% to 70% of South Lokichar Basin prospective
resources
2C resource increase of
557% since 2012
368 0
500
2C Prospective
Risked
Prospective
Unrisked
14
557% since 2012
1 This summary table was prepared by Company management for the convenience of readers.
2 Please refer to the Company’s press release dated September 3, 2013 for details of the prospective and contingent resources by
prospect and lead, including the geologic chance of success.
3 Risked resources have been calculated and summed by the company after risking prospects and leads individually. Geological Chance of
Success (GCOS) varies with each prospect or lead.
4 Net Prospective and Contingent Resources are stated herein in terms of the Company’s net working interest in the properties. Due to
the very immature nature of these Resources, net estimates have not been computed as net entitlement volumes under the
PSAs/PSCs. In this regard the volumes stated herein will exceed the volumes which will arise to AOC under the terms of the PSAs/PSCs.
5 There is no certainty that any portion of the Prospective Resources will be discovered. If discovered, there is not certainty that the
discovery will be commercially viable to produce any portion of the resources.
2014 Exploration Outside of Lokichar-Focus on Opening New Basins
• Chew Bahir Basin (South Omo Block)
� New seismic identified large inventory of prospects
� Prospects supported direct hydrocarbon indicators
� 2 wells planned, Shimela-1 spud March 2014
• Western Shore, Lake Turkana (10BA)
� Latest seismic confirms large prospect inventory
� Several interesting prospects drillable onshore
� 2 wells planned
• South Kerio Basin (Block 10BB)
Western ShoreChew Bahir
Engomo
15
� New seismic identifies Ngamia-style play
� Several prospects & leads
� 2 wells planned
• Anza Basin (Block 9)
� Sala-1 spud Feb. 2014
� Potential to extend the Sudan play into Kenya
Anza Basin South Kerio
Aze
Chew Bahir Basin (South Omo Block)
Chew Bahir BasinZorit
Wemay
Jigra
NESIR
• Possible basin-opener
Jigra S.
ShimelaBest-Estimate Gross
Resources48 MMBO
Shimela S.
SilaBest-Estimate Gross
Resources241 MMBO
East BM
GardimBest-Estimate
Gross Resources89 MMBO
Sorene
100 km
16
• Spud first well March 2014• Large prospect inventory• DHI’s, AVO anomalies
visible over some prospects
CherebaBest-Estimate Gross
Resources166 MMBO
KesamiKesamiBest-Estimate
Gross Resources 20 MMBO
Tertiary Marker 3
Chereba S.
Shala10km
120 MMBO
Kesami SEBest-Estimate
Gross Resources120 MMBO
Resource estimates are gross best estimates of prospective resources from Third Party Independent Resource Assessment except where noted as “Contingent”. Please refer to Prospective and Contingent Resources slide detailing specific contingencies relating to the classification of resources and cautionary statements.
Chew Bahir Basin Prospects (South Omo Block)
CB Marker 3
CB Marker 5
CB Marker 7
SW NE
Shimela: 48 MMBOBest-Estimate Gross Resources
Sila: 241 MMBOBest-Estimate Gross Resources
NW SE
Jigra: 5 MMBO Best-Estimate Gross Resources
CB Marker 3
CB Marker 7
Line CB-09 Line CB-40
CB Marker 5
CB Marker 7
Jigra
Sila
Sila: 241 MMBOBest-Estimate Gross Resources
Gardim: 89 MMBOBest-Estimate Gross Resources
Chereba: 166 MMBOBest-Estimate Gross Resources
N S
17
ShimelaSila
Gardim
Kesami
10km
CB-11
Kesami SE
Resource estimates are gross best estimates of prospective resources from Third Party Independent Resource Assessment except where noted as “Contingent”. Please refer to Prospective and Contingent Resources slide detailing specific contingencies relating to the classification of resources and cautionary statements.
Line CB-11
Rift Basin AreaRift Basin Area
42,519 sq km
Newly-Awarded Rift Basin Area PPSA
• PPSA award follows 3-year Joint Study
• Extends AOC position in Tertiary Rift Basins
• Frontier area, no existing seismic data or wells
• Completed 37,000 sq km Full Tensor Gradiometry survey
• Fieldwork confirming nearby source rocks
50km
•• Preparing to acquire 2D Seismic Survey
• AOI operates (50% WI), Marathon (50%)
Newly acquired FTG
JimaJima
TerchaTerchaEocene-Miocene shales & lignites
Source rocks at surface Tar reported along shoreline
Basins of Interest
Volcanic Volcanic CenterCenter
18
Oil slicks identified on landsat
50km
Miocene black shalesTOC’s: 5-7%
Early Mature for Oil (Ro = .6-.8)
TerchaTerchaEocene-Miocene shales & lignitesTOC’s up to 16%
Overmature (Ro>1.5)
Eocene-Miocene oil shalesTOC’s up to 59%
Immature (Ro = .33)
GochoGocho
Basins of Interest
Volcanic Centers
S Kerio A
S Kerio G
Dyepa Prospect, South Kerio Basin (Block 10BB)
New prospects from ongoing seismic program
Estimated prospective resources in the 50-100 MMBO class, pending CPR audit Dyepa
South Kerio
S Kerio C
S Kerio D
S Kerio E
S Kerio G
Lukwa Lukwa
(formerly
• Two possible basin-openers
• Ngamia-type traps, large number of follow-on prospects• Try to confirm extension of Lokhone source rocks
• Spud first well mid 2014
CPR audit Dyepa
100 km
Mrkr 5
DyepaNW SE
Tertiary Marker 3 Time Structure
0 10km
S Kerio F
(formerly
Mamba)
19
Mrkr 5
Mrkr 3
Mrkr 1
Aze Prospect- North Kerio Basin (Block 10BB)Time Structure Lower
Pliocene Marker
5km
Block 10BA
Block 10BB
Aze: 343 MMBOBest-Estimate Gross Resources (1)
Aze
(1) Resource estimates are gross best estimates of prospective resources from Third Party Independent Resource Assessment except where noted as “Contingent”. Please refer to Prospective and Contingent Resources slide detailing specific contingencies relating to the classification of resources and cautionary statements.
25km
W E
20
• Aze prospect to spud Q3, 2014• Possible basin-opener (North Kerio)• Large 4-way anticlinal closure• Infill seismic program underway• Several follow-on prospects mapped
Pio Mkr
Lake Turkana Western Shore Prospects (Block 10BA)
• 1,558 km of new onshore and marine seismic significantly increased prospect inventory
• Seismic acquisition concentrated along western shore
• Large prospects, different play types, drillable from land
• Uncertain stratigraphy between
Engomo(Kiboko )
Shaba
Kifaru
Samaki Lake
21
• Uncertain stratigraphy between sub-basins
• ‘Bright spots’ seen in new offshore seismic
• Spud first well Q3, 2014
Samaki
10 km
Turkana
Lake Turkana Western Shore Prospects (10BA)
Mrkr 5
Engomo (formerly Kiboko)Line 2012-36
Engomo (Formerly Kiboko)
Best-Estimate Gross Resources
106 MMBO
ShabaBest-Estimate
Gross Resources19 MMBO
KifaruBest-Estimate
Gross Resources
Lake Turkana
Western Shore
Line 2012-32-TZ
Samaki (projected)
Marine Onshore
Line 2012-36
Kifaru
Mrkr 1
Gross Resources333 MMBO
Samaki(new, from
recent seismic)
5 km
Plio. Mrkr
Plio. Volc
Flat Spots Line 2012-32TZ
22
Resource estimates are gross best estimates of prospective resources from Third Party Independent Resource Assessment except where noted as “Contingent”. Please refer to Prospective and Contingent Resources slide detailing specific contingencies relating to the classification of resources and cautionary statements.
Time StructureTertiary Marker-1
• Cretaceous Basin on trend with South Sudan with over 6 billion barrels of oil discovered along trend
• Play concept confirmed at Paipai well
• Bahasi-1 drilled to 2,900m in Basement (P&A), late trap formation, minor shows.
Anza Graben, Block 9: Extension of the Sudan Play
Sala:Best-Estimate
Gross Resourceslate trap formation, minor shows.
• Sala-1 will drill to +/- 3,400m to test ‘old structure’ and rift-bounding fault play, Spud Feb. 20, 2014
• AOC Operates (50% WI), Marathon (50%)
Surface volcanics
Ndovu
Bogal 1 Discovery:
Bahasi-1 P&A
Gross Resources402 MMBO
23
Resource estimates are gross best estimates of prospective resources from Third Party Independent Resource Assessment except where noted as “Contingent”. Please refer to Prospective and Contingent Resources slide detailing specific contingencies relating to the classification of resources and cautionary statements.
Bogal 1 Discovery:Best-Estimate Gross
Resources1.88 TCFG
L. Cretaceous
L. Tertiary
Tert. Marker
Basement
Basin Opening Strategy 2013/2014
New Basin De-Risking ScheduleGross Best Estimate Unrisked Prospective Resources
8,0128,000
9,000
mmbo
Net Unrisked Best Estimate
Prospective Resources
New Basin De-RiskingBest Estimate Net Unrisked & Risked Prospective Res ources
1H2014
2H2014 2015+
5,696
522 6901,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000Net Risked Best Estimate
Prospective Resources
24
1 This summary table was prepared by Company management for the convenience of readers.
2 Please refer to the Company’s press release dated September 3, 2013 for details of the prospective and contingent resources by
prospect and lead, including the geologic chance of success.
3 Risked resources have been calculated and summed by the company after risking prospects and leads individually. Geological Chance of
Success (GCOS) varies with each prospect or lead.
4 Net Prospective and Contingent Resources are stated herein in terms of the Company’s net working interest in the properties. Due to
the very immature nature of these Resources, net estimates have not been computed as net entitlement volumes under the
PSAs/PSCs. In this regard the volumes stated herein will exceed the volumes which will arise to AOC under the terms of the PSAs/PSCs.
5 There is no certainty that any portion of the Prospective Resources will be discovered. If discovered, there is not certainty that the
discovery will be commercially viable to produce any portion of the resources.
0
2013/14 Program Total Prospective Resources
What you will see by end 2014
Basin Openers
1H 2014 2H 2014
Sala(Anza)
Shimela(Chew Bahir #1)
Dyepa(S. Kerio #1)
Gardim(Chew Bahir #2)
Engomo (ex. Kiboko - W. Turkana #1)
(Timing of well results)
Aze(N.Kerio #1)
Lokichar Drill Out
Lokichar Appraisal
Lokichar
EkunyukEwoi EtomAmosing Emong
Etuko-2
Twiga-2 Ngamia-4
Amosing-2Ngamia-2
Ngamia-3 Amosing-3
EWT
Gov’t Kenya Pipeline tender & Pre -FEED
Agete-2
Ekosowan
Ngamia-5 Ekales-2
25
LokicharDevelopment
Gov’t Kenya Pipeline tender & Pre -FEED
Long-term Development Plan Definition
• 6 Basin Openers• Drill key Lokichar Prospects• Appraise Ngamia, Twiga, Agete, Amosing & Ekales• Define development way forward
World Class Development Project
• Proven prolific light oil South Lokichar basin with significant running room
• South Lokichar Basin exceeds threshold volumes for developmentvolumes for development
• Kenyan & Ugandan Presidents agree joint export pipeline
• Concept work on pipeline and offshore loading complete
• Concluded pipeline cooperation agreement between Kenyan & Ugandan Joint Ventures
• Pipeline Pre-FEED and ESIA underway
*
26
• Government of Kenya announced intention to invite Expressions of Interest (EoI) for development of a Kenya crude export pipeline
• Project sanction anticipated by end of 2015 / early 2016
*Tullow public disclosure
101.4
79.7 Drilling
AOI Corporate Summary
• Funding
• $450MM equity issuance completed Oct-2013
• Funding in place through mid -2015
2014 Forecast O&G Expenditures (gross): $814MM
Graduated to TSX May 2014. Application for graduation to NASDAQ OMX main board.
539.4
93.8
101.4 Drilling
Seismic
Development
Studies
Other
• Funding in place through mid -2015
• $43.5MM Marathon farmout carry – dedicated to Block 9, Block 12 and Rift Basin Area fully utilized in 2014
• Drilling focused 2014 exploration budget:
• Drilling: 70%
• Seismic: 6%
• Development Studies: 15%
• Capital Structure
2014 Forecast O&G Expenditures (net): $348MM
35.1 Drilling
27
• Capital Structure
• 310.5MM Shares
• 18.3MM Options
• Nil warrants
• Nil debt
27
243.3
19.4
50.7
35.1 Drilling
Seismic
Development
Studies
Other
Step Up Community Engagement
Africa Oil is committed to addressing the challenge of sustainability - delivering value to our shareholders, while providing economic and social benefits to impacted communities and minimizing our environmental footprint.
Risk Management and Value Creation
communities and minimizing our environmental footprint.
• To create a working environment such that we cause no harm to people, and where we minimize our impact on the environment.
• To create a secure and safe working environment for our people and assets
• To conduct our business in an honest and ethical manner.
• To enter into dialogue and engagement with key stakeholders,
28
• To enter into dialogue and engagement with key stakeholders, conducted in the spirit of transparency and good faith.
• To deliver tangible and sustainable benefits that contribute to the social and economic well being of citizens in our host countries.
• To support the development of financial transparency and good governance mechanisms.
• To support and protect internationally recognized human rights.
A History of Value Creation
Company 2002 Recent Notes
Tanganyika $0.55/share
$13.5 million MC
$31.50/share
$1.9 billion MC
Sold to Sinopec 2008
$13.5 million MC $1.9 billion MC
Valkyries $0.45/share
$4 million MC
$16.00/share
$750 million MC
Sold to Lundin Petroleum 2006
Africa Oil $0.27/share
$1 million MC
$9.24/share
$2.9 billion MC
Active
Lundin Petroleum U $0.41/share
U $101 million MC
$23/share
$6.9 billion MC
+ Enquest spin off
US $1.5 billion MC
Active
BlackPearl $0.25/share
$2.1 million MC
$2.18/share
$645 million MC
Active
29
$2.1 million MC $645 million MC
ShaMaran $0.175 (2003)
$6.7 million MC
$0.46/share
$377 million MC
Active
12 Year value increase: $128MM => $15 BillionAverage share price increase: 39x
Opportunity Summary
• Africa Oil has the best onshore acreage position in East Africa, and perhaps the largest upside exploration portfolio in the world
• The Ngamia, Twiga, Etuko, Ekales, Agete, Amosing and Ewoi discoveries have significantly de-risked the South Lokichar Basin –expect very high future success rate
• The Company has 7 active rigs with 5 in Kenya (4 currently in the Lokichar basin) and 2 in Ethiopia with at least 20 wells planned in 2014
• New basin opening wells have chance for high impact growth and
30
• New basin opening wells have chance for high impact growth and step change in share valuation
• Research coverage from over 25 analysts
AOI has a Strong Management Team
Keith Hill, President and CEOMr. Hill has over 27 years experience in the oil industry including international new venture management and senior exploration positions at Occidental Petroleum and Shell Oil
Company. His education includes a Master of Science degree in Geology and Bachelor of Science degree in Geophysics from Michigan State University as well as an MBA from the
University of St. Thomas in Houston. Prior to his involvement with Africa Oil, Mr. Hill was President and CEO of Valkyries where he led the company through rapid growth and
ultimately a highly successful $700 million takeover by Lundin Petroleum. In addition, Mr. Hill was one of the founding directors of Tanganyika Oil which was recently the subject
of a $2 billion takeover by Sinopec International Petroleum.
Ian Gibbs, CFOIan Gibbs is a Canadian Chartered Accountant and a graduate of the University of Calgary where he obtained a bachelor of commerce degree. He has been a member of Africa
Oil’s Board of Directors or Executive Management Team since 2006. Since 2004, Mr. Gibbs has been the Chief Financial Officer of several TSX-Venture and TSX Listed Oil’s Board of Directors or Executive Management Team since 2006. Since 2004, Mr. Gibbs has been the Chief Financial Officer of several TSX-Venture and TSX Listed
international oil exploration and production companies including Valkyries Petroleum Corp. and Tanganyika Oil Company Ltd. and has been actively involved in the day to day
operation of these companies with operations in Russia, Syria, Egypt, Kenya, Ethiopia and Puntland (Somalia). Prior to 2004, Mr. Gibbs spent several years working in Russia and
Kazakhstan in the upstream oil and gas industry. As CFO of Tanganyika Oil, in 2008, he played a pivotal role in the $2 billion acquisition by Sinopec International Petroleum. Prior
to Tanganyika Oil, Mr. Gibbs was CFO of Valkyries Petroleum which was the subject of an $750 million takeover.
Nick Walker, COOMr. Walker has 28 years of industry experience including 17 years with Talisman Energy Inc. where he served as Executive Vice-President of International Operations West as
well as country manager positions in the UK and Malaysia/Vietnam. He has extensive international upstream oil and gas experience across Europe, Latin America, Asia and Africa
and has led operating businesses in all those areas. He started his career as a petroleum engineer with BP plc. and also worked in senior management positions at Bow Valley
Energy Inc. He previously served on the Board of Oil & Gas UK, the trade association representing the UK oil and gas business. His education includes a Bachelor of Science
Degree in Mining Engineering from Imperial College in London, a Master of Science Degree in Computing Science from University College in London and an MBA from City
University Business School, also in London.
James Phillips, VP Business DevelopmentBefore joining Africa Oil, Mr. Phillips was Vice President Exploration-Africa and Middle East for Lundin Petroleum AB where he played a pivotal role in securing the majority of
Africa Oil’s current portfolio. Mr. Phillips is a graduate of the University of California, Berkeley and San Diego State University where he obtained BS and MS degrees,
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Africa Oil’s current portfolio. Mr. Phillips is a graduate of the University of California, Berkeley and San Diego State University where he obtained BS and MS degrees,
both in Geology. He has over 30 years of experience in the oil industry including senior positions with Shell Oil company and Occidental including heading up Oxy’s African
exploration ventures.
Paul Martinez, VP ExplorationDr. Martinez, most recently Director of International Business Development with Occidental Petroleum Corporation, has over 23 years of domestic US and international
experience in oil and gas exploration and development, including projects in the Texas Gulf Coast, Permian Basin, Rockies, Latin America, Africa, Middle East, and Russia. He has
held overseas management positions for Oxy in Libya, Oman and Peru. Dr. Martinez holds Master of Science and Doctorate degrees in applied earth sciences from Stanford University and a Bachelor of Science degree in petroleum geology from the University of Texas at Austin. Dr. Martinez is based in Africa Oil’s Calgary office and is responsible for all geological and geophysical activities of the Company.
Alex Budden, VP External RelationsBefore joining Africa Oil Alex Budden served as a Diplomat for the British Foreign & Commonwealth Office for 21 years. His international experience has seen him serve in Africa,
Asia, the Middle East, Russia, the Balkans and North America. Throughout his career he has focused on international security, conflict, governance, human rights, energy and
environment issues and specializes in government and security relations, complex stakeholder management and strategic communications work.
Cautionary Statements
This document has been prepared and issued by and is the sole responsibility of Africa Oil Corp. (the “Company”) and its subsidiaries. It comprises the written materials for a presentation to investors and/or industry professionals concerning the Company’s business activities. By attending this presentation and/or accepting a copy of this document, you agree to be bound by the following conditions and will be taken to have represented, warranted and undertaken that you have agreed to the following conditions.
This presentation may not be copied, published, distributed or transmitted. The document is being supplied to you solely for your information and for use at the Company’s presentation to investors and/or industry professionals concerning the Company’s business activities. It is not an offer or invitation to subscribe for or purchase any securities presentation to investors and/or industry professionals concerning the Company’s business activities. It is not an offer or invitation to subscribe for or purchase any securities and nothing contained herein shall form the basis of any contract or commitment whatsoever This presentation does not constitute or form part of any offer or invitation to whatsoever. sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares in the Company in any jurisdiction nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract commitment or investment decision in relation thereto nor does it constitute a recommendation regarding the securities of the Company. The information contained in this presentation may not be used for any other purposes.
This update contains certain forward looking information that reflect the current views and/ or expectations of management of the Company with respect to its performance, business and future events including statements with respect to financings and the Company’s plans for growth and expansion. Such information is subject to a number of risks, uncertainties and assumptions, which may cause actual results to be materially different from those expressed or implied including the risk that the Company is unable to obtain required financing and risks and uncertainties inherent in oil exploration and development activities. Readers are cautioned that the assumptions used in the preparation of such information, such as market prices for oil and gas and chemical products, the Company’s ability to explore, develop, produce and transport crude oil and natural gas to markets and the results of exploration and development drilling and related activities, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking information. The Company assumes no future obligation to update these forward looking information except as required by applicable securities laws.
Certain data in this presentation was obtained from various external data sources, and the Company has not verified such data with independent sources. Accordingly, no representation or warranty, express or implied, is made and no reliance should be placed, on the fairness, accuracy, correctness, completeness or reliability of that data, and such data involves risks and uncertainties and is subject to change based on various factors.
No reliance may be placed for any purposes whatsoever on the information contained in this presentation or on its completeness. The Company and its members, directors,
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No reliance may be placed for any purposes whatsoever on the information contained in this presentation or on its completeness. The Company and its members, directors, officers and employees are under no obligation to update or keep current information contained in this presentation, to correct any inaccuracies which may become apparent, or to publicly announce the result of any revision to the statements made herein except where they would be required to do so under applicable law, and any opinions expressed in them are subject to change without notice, whether as a result of new information or future events. No representation or warranty, express or implied, is given by the Company or any of its subsidiaries undertakings or affiliates or directors, officers or any other person as to the fairness, accuracy, correctness, completeness or reliability of the information or opinions contained in this presentation, nor have they independently verified such information, and any reliance you place thereon will be at your sole risk. Without prejudice to the foregoing, no liability whatsoever (in negligence or otherwise) for any loss howsoever arising, directly or indirectly, from any use of this presentation or its contents or otherwise arising in connection therewith is accepted by any such person in relation to such information.
For additional details on the Company, please see the Company’s profile at www.sedar.com.
Prospective and Contingent ResourcesThere is no certainty that any discovered resources referred to in this presentation will be commercially viable to produce. There is no certainty that any portion of the undiscovered resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.
Risks associated with discovering oil:The estimation of prospective resource volumes for high-risk and poorly calibrated basins can be subject to large variation from the introduction of new information. The estimates presented herein are based on all of the information available at the effective date of the resource estimate. New data or information is likely to have a material effect on the resource assessment values. Since the effective date of the resource estimates provided, the Company has continued to actively explore, with multiple seismic crews operational and several exploration wells drilled. There is no certainty that any additional resources will be discovered. Once discovered, there is no certainty that the discovery will be commercially viable to produce any portion of the resources. Given that most of the resources in the portfolio are in leads that require additional data to fully define their potential it is likely that significant changes to the resource estimates will occur with the incorporation of additional data and information.
Risk Associated with the Estimates:Risk Associated with the Estimates:In the event of a discovery, basic reservoir parameters, such as porosity, net hydrocarbon pay thickness, fluid composition and water saturation, may vary from those assumed by the Company’s independent third party resource evaluator affecting the volume of hydrocarbon estimated to be present. Other factors such as the reservoir pressure, density and viscosity of the oil and solution gas/oil ratio will affect the volume of oil that can be recovered. Additional reservoir parameters such as permeability, the presence or absence of water drive and the specific mineralogy of the reservoir rock may affect the efficiency of the recovery process. Recovery of the resources may also be affected by well performance, reliability of production and process facilities, the availability and quality of source water for enhanced recovery processes and availability of fuel gas. There is no certainty that certain mineral interests are not affected by ownership considerations that have not yet come to light.
Substantial Capital Requirements:Africa Oil expects to make substantial capital expenditures for exploration, development and production of oil and gas reserves in the future. The Company's ability to access the equity or debt markets may be affected by any prolonged market instability. The inability to access the equity or debt markets for sufficient capital, at acceptable terms and within required time frames, could have a material adverse effect on the Company's financial condition, results of operations and prospects.
Ability to Execute Exploration and Development Program:It may not always be possible for Africa Oil to execute its exploration and development strategies in the manner in which the Company considers optimal. Execution of exploration and development strategies is dependent upon the political and security climate in the host countries where the Company operates and agreement amongst the Company joint venture partners. The Company's exploration and development programs in East Africa may involve the need to obtain approvals from relevant authorities who may require conditions to be satisfied or the exercise of discretion by the relevant authorities. It may not be possible for such conditions to be satisfied.
Absence of a Formal Development Plan including Required Funding:
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Absence of a Formal Development Plan including Required Funding:There is no certainty the Company will prepare and have approved a development plan for any portion of the contingent resources or that the Company will be successful in funding any development should such a plan be prepared. General market conditions, the sufficiency of such a development plan and the outlook regarding oil and gas prices are some factors that will influence the availability of funding or the Company’s ability to attract oil and gas industry partners to participate in the project.
Access to Infrastructure:Currently there is limited local infrastructure for the production and distribution of oil and gas in the countries in which Africa Oil operates. Export infrastructure to enable other markets to be accessed has not yet been developed and is contingent on numerous factors including, but not limited to, sufficient reserves being discovered to reach a commercial threshold to justify the construction of export pipelines and agreement amongst various government agencies regulating the transportation and sale of oil and gas. Africa Oil is working with its joint venture partners and government authorities to evaluate the commercial potential and technical feasibility of discoveries made to date and potential future discoveries.
Additional Risks:Additional risks associated with the estimate of the prospective and contingent resources include risks associated with the oil and gas industry generally (i.e. financing; operational risks in exploration, development and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of estimates and projections related to production; costs and expenses; health, safety, security and environmental risks; and the uncertainty of resource estimates), drilling equipment availability and efficiency, the ability to attract and retain key personnel, the risk of commodity price and foreign exchange rate fluctuations, the uncertainty associated with dealing with governments and obtaining regulatory approvals, and the risk associated with international activities.