South Africa Awaits Shale Gas Assessment Outcome

- South Africa Awaits Shale Gas Assessment Outcome

Thursday, September 08, 2011
OilPrice.com
by Charles Kennedy

As South Africa has very limited natural gas reserves, the country's Department of Energy is awaiting the outcome of an assessment of the nation's shale gas potential.

South Africa's Department of Energy Deputy Director General for Hydrocarbon Tseliso Maqubela said at the 4th annual Natural Gas Conference, "The truth that we have to face and effectively deal with is that South Africa has very limited gas reserves. We are awaiting the outcome of the assessment of the shale gas potential, which is currently estimated to be around 485 trillion cubic feet. There are also projects afoot to explore the potential of importing natural gas both as liquefied natural gas (LNG) and compressed natural gas (CNG) to meet our country's energy demands," BuaNews news agency reported.

The Department of Energy has noted environmentalists' concerns about the controversial hydraulic fracturing technique, also known as "fracking," used to liberate the natural gas from surrounding rock formations. Maqubela said that an interdepartmental task team was investigating the procedure's possible impact on the environment, led by the Department of Mineral Resources.

The Department of Energy is in the process of reviewing the 2001 Gas Act, with the regulation of LNG and CNG being reviewed as well as concepts for improving the nation's natural gas regulatory framework.

(Charles Kennedy is Deputy Editor of OilPrice.com. The original article appears here.)

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Africa Oil, Denovo to Close Transaction in Few Weeks

- Africa Oil, Denovo to Close Transaction in Few Weeks

Tuesday, September 06, 2011
Africa Oil Corp.

Africa Oil provided an update to its previously announced proposed transaction with Denovo Capital whereby Denovo will acquire all the issued and outstanding shares of Canmex Holdings (Bermuda) I Ltd., Africa Oil's wholly-owned subsidiary.

The TSX Venture Exchange approved the filing of Denovo's filing statement dated August 29, 2011 relating to the Transaction and the Filing Statement was filed on SEDAR on September 1, 2011. Denovo has made its initial submission to the Exchange but has not received conditional approval of the Transaction. Africa Oil and Denovo expect to be in a position to close the Transaction in the next few weeks.

Following the completion of the Transaction, Denovo will, among other things, have consolidated its issued and outstanding common shares on the basis of one post-consolidation common share for every 0.65 pre-consolidation common shares, continued into the Province of British Columbia under the Business Corporations Act (British Columbia) and changed its name to "Horn Petroleum Corporation". For further information regarding the Transaction, please see Denovo's press release dated August 11, 2011.

In connection with the Transaction, Africa Oil announced the results of an independent evaluation of the prospective resources held by Canmex in the Dharoor Valley and Nugaal Valley Blocks in Puntland (Somalia) ("Resource Report"). The Resource Report, effective June 30, 2011, was prepared for Denovo by Petrotech Engineering Ltd. ("Petrotech") and in accordance with the current guidelines outlined in the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities. A copy of the Resource Report may also be found under Denovo's profile on SEDAR.

The Resource Report indicates that gross best estimate prospective resource in the Dharoor Valley and Nugaal Valley Blocks, including both prospects and leads, are in excess of 5.2 billion barrels of oil. A summary of Canmex's gross and net share of the unrisked prospective resources (prospects) and the net present values from the profit oil revenue less the un-recoverable amount of funds from the production operation; discounted at 0, 5, 10, 15 and 20% before and after income tax are presented in the table below. The net cash flow is calculated at forecast prices and escalated costs on the prospective resources, to all future time and after deduction of the capital costs, royalties and before and after deduction of income tax. All cash flow data is in U.S. dollars.

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Africa Oil Clinches Rig for Puntland Program

- Africa Oil Clinches Rig for Puntland Program

Thursday, August 18, 2011
Africa Oil Corp.

Africa Oil provided an update on drilling operations related to the two-well exploration program in the Dharoor Valley Block, located in Puntland (Somalia).

Drilling locations have been selected over two robust prospects targeting gross best estimated prospective resources of over 300 million barrels each, based on internal estimates. A contract has been awarded to Sakson Drilling and Oil Services who will provide a 1,500 horse-power, top drive equipped rig. The majority of the drilling-related third party service contracts have been entered into and all outstanding service contracts are expected to be completed before the end of August.

The Company is actively engaged in sourcing drilling related materials and early stage logistics including drill site and ingress route construction. A contract has been signed with a water well drilling company and water well drilling will commence in early September. Mobilization of required personnel and equipment is planned to allow for spud of the Shabeel-1 well during the fourth quarter of this year.

The Puntland Government and Dharoor Valley communities are fully supportive of the drilling project and have ensured they will do all that they can to allow the project to move forward safely and expeditiously.

Please refer to the Company's press release dated August 11, 2011, detailing a proposed transaction whereby the Company will transfer its interests in the Puntland production sharing contracts to Denovo. Assuming completion of the transaction and related financing, it is anticipated the Company will own approximately 50% of Denovo. A private placement of CAD$40.9 million has been closed by Denovo subject to final TSX Venture Exchange approval of the transaction which will allow the new combined company to fully fund the upcoming two well program.

Keith Hill, Africa Oil's President and Chief Executive Officer, commented, "We are very pleased to have signed a drilling rig contract and to have procured the required services to allow us to commence drilling operations in Puntland. With support from the local communities and Puntland Government, we are eager to drill the first exploration wells in Puntland in over 20 years, aimed at unlocking the resource potential of the area."

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TWMA Wins 1st Offshore Contract in W. Africa

- TWMA Wins 1st Offshore Contract in W. Africa

Tuesday, August 16, 2011
TWMA

TWMA has won its first offshore service contract in West Africa, signifying its intention to expand its business in this important region.

The contract was awarded by AGR Petroleum Services and is worth around £1million over six months. It covers supply, installation and operation of an integrated drilling waste management solution.

TWMA will provide a range of solids control technologies to AGR for its drilling campaign in the Hyperdynamics' concession offshore the Republic of Guinea.

The drillship Jasper Explorer has been contracted by AGR, on behalf of Hyperdynamics, for this exploration project. It will leave Singapore where it is currently based for Conakry in Guinea later this month with drilling due to commence in August.

The service package, which includes cuttings dryers, centrifuges and pumps along with TWMA's field proven CCDS cuttings handling, storage and transfer system has been deployed from TWMA's facilities in Aberdeen, UK, and Egypt.

A crew of up to 15 technicians will be mobilized from Aberdeen to install the equipment on the drillship and a team will remain onboard for the duration of AGR's drill program.

Ronnie Garrick, managing director of TWMA, said, "West Africa is a priority region for our ongoing internationalization plans and this landmark contract offshore Guinea provides a basis for us to continue expanding our waste management services in the region.

"Our ability to provide a complete solids control package to AGR and deliver short mobilization times for projects worldwide sets us apart from other companies. We are delighted that AGR has chosen to work with TWMA again and look forward to this latest campaign.

"As we continue to strengthen and build relations in West Africa through a focused and dedicated resource for the region, we are confident of winning further new business for all our service lines."

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Merkel Tours Africa in Search of Energy Supplies

- Merkel Tours Africa in Search of Energy Supplies

Monday, July 11, 2011
Deutsche Presse-Agentur (dpa)
by Jean-Baptiste Piggin and Kristina Dunz, dpa

Chancellor Angela Merkel meets Kenyan leaders on Tuesday at the start of a three-day swing through Africa where business opportunities, especially purchases of gas and oil, are high on the agenda.

In her weekly video message to the public, Merkel explained, "In Kenya, I'll be finding out how renewable energy is coming into wider use... In Angola, we want to establish an energy and raw materials partnership."

Germany has already had such an energy partnership since a 2007 G8 summit with Nigeria, the third and last nation on her schedule, but the accord has not performed well, Merkel admitted.

"My visit is intended to give it a jolt so the partnership can develop better," she said.

A party of business leaders are travelling with her and are expected to sign deals that have been negotiated in recent months.

Merkel was due to fly out of Berlin Monday afternoon, arriving in Kenya late at night. Her return is scheduled for the small hours of Friday. It is Merkel's third visit to Africa as chancellor: the first was in 2007.

Germany unveiled a new policy on Africa last month, shifting the stress away from selfless development aid and putting more emphasis on the German interest in obtaining minerals and oil.

Berlin has been dismayed by the rush of China, Brazil and other rising powers to sew up resources deals in Africa.

Aides said the corruption that is endemic in the three nations Merkel will be visiting makes it difficult to grow investment at a time when German companies face strict scrutiny to ensure they never pay bribes.

Germany was a colonial power in Africa until the First World War ended in 1918, when it lost control of the territories that are today known as Namibia, Tanzania, Rwanda, Burundi, Cameroon and Togo.

Its interest in Africa revived in the post-colonial period, with many Germans eager to use their wealth to end world poverty, but disillusionment soon set in amid reports of waste and corruption.

Under the new policy Berlin will be adopting a tougher approach to Africa, requiring future development aid spending to achieve "value for money." It will demand better access to African markets for German companies.

The paper said Germany will stress its own values in Africa, including good governance and democracy.

Merkel criticized the three nations she is visiting this week, saying, "All three countries still have considerable problems establishing a truly stable structure of government."

Berlin officials say 600 German companies operate in Africa and employ 146,000 people there.

The centre-right government's new stance towards Africa has been criticized by aid groups.

They charge that the emphasis on investment and mineral rights means Germany will try to cut deals with tycoons and governments, and possibly leave out of account the majority of ordinary Africans who live in rural areas.

They also argue that Germany should be less aggressive towards the import controls that often protect African industries.

The chancellor's visit to Kenya will also include a visit to the offices of the UN Environment Programme (UNEP) in Nairobi.

In the Angolan capital Luanda she will meet non-government figures, described as "representatives of civil society," to show her support for freedom of speech and of the press.

Copyright 2011 dpa Deutsche Presse-Agentur GmbH

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South Africa, South Korea Sign Deal on Hydrocarbon Exploration

- South Africa, South Korea Sign Deal on Hydrocarbon Exploration

Tuesday, July 05, 2011
Deutsche Presse-Agentur (dpa)

The national oil companies of South Africa and South Korea on Tuesday signed a deal on hydrocarbon exploration in Africa.

PetroSA and the Korea National Oil Corporation (KNOC) said they will also explore investment opportunities in the oil and gas sector on the continent.

The South African company said the deal would help it secure fuel supplies for the country, while its South Korean counterpart said this was a "golden opportunity to advance into African regions."

This is the latest deal between major Asian economies and African firms on natural resources, while countries like South Korea seek access to key exports to ensure their growth.

Copyright 2011 dpa Deutsche Presse-Agentur GmbH

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TGS, Dolphin Join Forces for Seismic Acquisition in NW Africa

- TGS, Dolphin Join Forces for Seismic Acquisition in NW Africa

Thursday, June 23, 2011
TGS-NOPEC Geophysical Co. ASA

TGS has signed an agreement with Dolphin Geophysical Ltd. to jointly acquire, process and market multi-client 2D seismic data along Northwest Africa. The survey will total 25,000 km of long offset seismic data in the offshore areas of multiple countries. This program was designed based on the partnership's extensive geologic knowledge of the area. Approximately 10,000 km of seismic data has been acquired to date using the M/V Artemis Atlantic and the remaining acquisition will continue into the second half of 2011.

The data will improve the understanding of highly prospective areas along the Northwest African Passive Margin and adds to TGS' existing and continuous multi-client 2D seismic library along the African margin.

Data processing will be performed by TGS and certain data will be available to clients beginning in late 2011, with the full program completed in 2012.

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Africa Oil Concludes Acquisition of Lion Energy

- Africa Oil Concludes Acquisition of Lion Energy

Tuesday, June 21, 2011
Africa Oil Corp.

Africa Oil has completed the acquisition of all of the issued and outstanding common shares of Lion Energy. Pursuant to an acquisition agreement previously announced April 3, 2011, Africa Oil acquired all of the issued and outstanding shares of Lion in consideration of 0.2 Africa Oil shares for each common share of Lion. Under these terms, Africa Oil issued 17,462,447 common shares to complete the acquisition. In addition, outstanding options to acquire common shares of Lion will be exchanged for options to acquire 287,250 Africa Oil shares, issued pursuant to the terms of the Africa Oil stock option plan, and outstanding warrants to acquire Lion shares have been amended to provide for the issuance of 2,289,000 shares of Africa Oil upon exercise. In each case the exercise price and number of shares to be acquired has been adjusted to account for the exchange ratio of 0.2 Africa Oil shares for 1 Lion shares.

The acquisition was approved by the Lion shareholders at a special shareholders meeting held on June 8, 2011, with 99.96% of the votes cast being voted in favor of the acquisition, and by the Supreme Court of British Columbia on June 9, 2011. Trading in the common shares of Lion will be halted by the TSX Venture Exchange before markets open on Tuesday, June 21, 2011.

Lion was a farm in partner with Africa Oil in Blocks 9 and 10BB in Kenya, and in the production sharing contracts for the Dharoor Valley Exploration Area and the Nugaal Valley Exploration Area in Puntland (Somalia). As a result of the completion of the acquisition of Lion, Africa Oil's direct and indirect interest in Blocks 9 and 10BB has increased to 100% and 50% respectively, and its interest in each of the Puntland (Somalia) production sharing contracts has increased to 60%.

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."

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Germany Unveils New Africa Policy, Drops Sudan Visit

- Germany Unveils New Africa Policy, Drops Sudan Visit

Wednesday, June 15, 2011
Deutsche Presse-Agentur (dpa)

Germany unveiled its new policy towards Africa, which shifts the stress away from selfless development aid and puts more emphasis on the German interest in obtaining minerals and oil.

Foreign Minister Guido Westerwelle set out the details just before he was due to leave Berlin on a visit to Sudan. His trip was however cancelled because drifting ash from a volcano erupting in Eritrea, made aviation in the area unsafe.

German business is to be encouraged to negotiate deals that combine investment in the 53-nation continent with extraction rights under the new policy.

The European country's approach to Africa would be "internally consistent, set realistic objectives and serve our values and interests," according to the policy paper.

The center-right government's policy is binding on all ministries and agencies dealing with Africa.

Germany was a colonial power in Africa until the end of the First World War in 1918, when it lost control of all the territories that are today known as Namibia, Tanzania, Rwanda, Burundi, Cameroon and Togo.

Its interest in Africa revived in the post-colonial period, with many Germans eager to use their wealth to end world poverty, but disillusionment soon set in amid reports of waste and corruption.

Under the new policy Berlin adopts a tougher approach to Africa, that requires future development aid spending to achieve "value for money" and better market access for German companies. The 29-page policy document talks of a "partnership between equals" and gives "peace and security in our neighborhood" as Germany's prime objective.

The document also mentions "irregular migration" from Africa as something Berlin wants to prevent.

The paper said Germany will stress its own values in Africa, including good governance and democracy, and hopes the 32 African nations that allow the death penalty will abolish it.

Berlin will also push for more rights for women and an end to laws against homosexuality. However the policy paper does not suggest that aid would be conditional on such countries changing their laws.

"We don't need to infect Africa with the germ of a love of freedom. It exists there already," said Westerwelle.

Referring to the revolts in North Africa, he said, "What we are experiencing in Africa is perhaps the most fascinating proof that the world is changing."

Africa was not being given a big enough place in world diplomacy, according to Westerwelle, noting that no African nation had a permanent UN Security Council seat.

"Africa is seriously under-represented in the global balance," he said.

Several aid groups in Berlin criticized the proposals to put aid under tough scrutiny and require it to yield economic benefits.

A joint response by several non-government organizations said the policy ignored the reality of the lives of the majority of Africans who live in rural areas, putting business interests ahead of beating poverty.

One aid group, Welthungerhilfe criticized the policy's hostility to import controls that protect African industries.

"Sometimes it serves economic development to protect newly created markets for a certain time," said the group's secretary, Wolfgang Jamann.

Chancellor Angela Merkel's cabinet meanwhile passed a resolution to recognize southern Sudan as Africa's 54th independent state when it gains independence from Khartoum on July 9. Westerwelle had been set to visit both parts during his scheduled three-day trip.

Germany will be chairing the UN Security Council when the new state is admitted to the UN next month.

Copyright 2011 dpa Deutsche Presse-Agentur GmbH

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Noble Extends Footprint in West Africa

- Noble Extends Footprint in West Africa

Wednesday, June 08, 2011
Noble Energy Inc.

Noble has joined a venture that is exploring the AGC Profond block located offshore Senegal and Guinea-Bissau in West Africa. The AGC Profond block, covering more than two million gross acres in water depths up to 11,500 feet, is in a designated cooperation area between the two countries. The venture has identified a number of prospects and leads on the acreage. Approximately 45 percent of the block is covered by existing 3D seismic.

The first target to be drilled is the Kora prospect in the northern part of the block, nearly 65 miles offshore in approximately 8,600 feet of water. The Kora prospect has a Cretaceous oil target with gross resources estimated at 450 million barrels of oil equivalent. The chance of success at the prospect is estimated by Noble Energy to be 20 percent. Total well depth is planned to be approximately 15,200 feet. Drilling is anticipated to begin in late June 2011 utilizing the Maersk Deliverer rig, with results expected by the end of August 2011.

David L. Stover, Noble Energy's President and COO, commented, "We are pleased to be adding this new exploration area to the portfolio. Offshore West Africa is a region where the industry has had numerous recent exploration successes, including our own offshore Equatorial Guinea and Cameroon. The AGC Profond block is an area that has not previously been explored and we believe it has significant oil potential. Our new ventures team did a great job of capturing this opportunity for Noble Energy, expanding our already large exploration inventory."

Ophir will operate the Kora-1 exploration well and, in the event of a discovery, Noble Energy will become the operator for appraisal and development activities. Noble Energy has a 30 percent working interest. Other interest owners are Ophir with 36.7 percent, Rocksource AGC Profond AS with 12.5 percent, and FAR Ltd. with 8.8 percent. The remaining interest is held by L'Entreprise, the AGC state-owned entity, with 12 percent.

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Africa Oil Reports Operational, Financial Ops for 1Q11

- Africa Oil Reports Operational, Financial Ops for 1Q11

Friday, May 27, 2011
Africa Oil Corp.

Africa Oil announced its financial and operating results for the three months ended March 31, 2011.

Highlights and accomplishments during the first quarter of 2011 included:

• The Company completed the acquisition of Centric Energy Corp. ("Centric"), a publicly traded oil and gas company listed on the TSX Venture Exchange. Total consideration paid was valued at $60.2 million and included the issuance of 30,155,524 AOC common shares. Centric's primary asset is Block 10BA in Kenya which is strategically located within the highly prospective East African Tertiary Rift System between AOC's Block 10BB and its South Omo Block. Centric and Tullow Oil plc ("Tullow") are joint venture partners on the Block 10BA. In addition, Centric also has a carried 25% interest in Block 7 and Block 11, both located in the Republic of Mali and operated by Heritage Oil Corporation.
• Africa Oil entered into amending agreements with the Government of Puntland in the quarter, represented by the Puntland Petroleum and Mineral Agency, in respect of the production sharing agreements ("PSAs") for the Dharoor Valley Exploration Area and the Nugaal Valley Exploration Area. Under the PSAs, as amended, the First Exploration Agreement has been extended for a further 12 months, from January 17, 2011 to January 17, 2012. Under the amended PSAs, AOC is obligated to spud a minimum of one exploratory well in the Dharoor Valley Exploration Area by July 27, 2011. A second exploratory well is required to be spudded in the Nugaal Valley Exploration Area or, at the option of AOC, in the Dharoor Valley Exploration Area, by September 27, 2011. In conjunction with this amendment, the Company completed its farmout agreement with Red Emperor Resources NL ("Red Emperor"). Under the terms of the farmout agreement and an election made by Red Emperor to increase their interests, Red Emperor will earn a 20% interest in both the Dharoor and Nugaal Valley Blocks and is committed to paying a disproportionate share of costs related to the one well drilling commitment included in the first exploration period of both the Dharoor and Nugaal Valley Production Sharing Agreements.
• The Company signed a definitive agreement with Lion Energy Corp. ("Lion"), a publicly traded oil and gas company listed on the TSX Venture Exchange, to acquire all of the issued and outstanding common shares of Lion. Pursuant to the agreement with Lion, AOC will acquire, by way of a plan of arrangement, all of the issued and outstanding shares of Lion in consideration for 0.20 common shares of AOC for each common share of Lion. It is anticipated that 17,233,636 AOC shares will be issued as consideration to acquire Lion. Lion is a joint venture partner of AOC in Kenya and Puntland (Somalia), and currently holds the following working interests; 33.3% in Block 9 (Kenya), 10% in Block 10BB (Kenya), and 15% in each of Dharoor Valley and Nugaal Valley (Puntland). In addition to the above properties, Lion estimated that it had cash, accounts receivable and investments in marketable securities with an approximate aggregate value of CAD$30 million at the date of signing the definitive agreement. A meeting of Lion shareholders, to approve the transaction, is scheduled to be held on June 8, 2011 and, assuming shareholder approval, the transaction is expected to close shortly thereafter.
• Subsequent to the end of the first quarter, Africa Oil entered into a letter of intent for the creation of a new Puntland focused oil exploration company. The new company will be created as a result of the transfer of AOC's interest in its oil and gas properties in Puntland (Somalia) to Denovo Capital Corp. ("Denovo") (the "Transaction"). Denovo is a capital pool company and intends for the Transaction to constitute the "Qualifying Transaction" of Denovo, as that term is defined in the policies of the TSX Venture Exchange. Under the terms of the letter of intent:
  • Africa Oil and Denovo will negotiate and enter into a definitive agreement pursuant to which Africa Oil will transfer to Denovo all of the issued and outstanding shares of its subsidiary holding companies (the "Puntland Subsidiaries") which hold participating interests in the Dharoor Valley and Nugaal Valley Production Sharing Agreements in Puntland (Somalia) (the "Puntland PSAs"). Africa Oil will receive, in consideration of the transfer, 27,777,778 common shares of Denovo. As a result of the Transaction, the Puntland Subsidiaries will become wholly owned subsidiaries of Denovo.
  • Africa Oil currently holds a 45% participating interest in the Puntland PSAs. Upon completion of the transaction for the acquisition of Lion Energy Corp, AOC's participating interest in the Puntland PSAs will be increased, directly or indirectly, to 60%. It is anticipated that the entire 60% participating interest will be transferred to Denovo.
  • The definitive agreement will provide for conditions precedent that are standard for a transaction of this nature, including receipt, by both AOC and Denovo, as required, of all regulatory, partner and third party approvals including TSX Venture Exchange approval. Denovo will also seek Denovo shareholder approval for a proposed 0.65 (new) for 1.00 (old) consolidation of its common shares and a change of name of the company, both of which are conditions precedent to completion of the transaction. It will be a condition precedent of the transaction that Africa Oil will have completed its proposed acquisition of Lion Energy Corp. and that Denovo will have completed a private placement of CAD$35 million comprised of 38,888,889 subscription receipts of Denovo sold at a post-consolidation price of CAD$0.90 per subscription receipt. Each subscription receipt will be exercised, upon completion of the transaction, into a unit of Denovo, comprised of one common share and one share purchase warrant (a "Denovo Warrant"). Each Denovo Warrant will entitle the holder to acquire an additional Denovo share for $1.50 for two years, subject to accelerated exercise provisions if the Denovo shares trade at greater than $2.00 for 10 consecutive trading days. It is anticipated that the definitive agreement will be entered into during the second quarter of 2011.
  • Africa Oil will acquire 11,111,111 subscription receipts in the private placement financing, for proceeds of CAD$10 million. At the conclusion of the Transaction and the private placement financing described above, AOC is anticipated hold approximately 55% (non-diluted) of the issued and outstanding common shares of Denovo. Upon completion of the Transaction it is expected that Denovo will meet the listing requirements of the Exchange for a Tier II Oil and Gas Issuer.
• Africa Oil ended the quarter in a strong financial position with cash of $77.8 million and working capital of $57.2 million as compared to cash of $76.1 million and working capital of $70.6 million at December 31, 2010. The Company's liquidity and capital resource position improved since year end primarily as the result of payments received upon the completion of farmout transactions. Working capital improved $24.4 million subsequent to the end of the quarter as the current portion of the warrant and convertible debenture obligations were settled in shares.
• Africa Oil currently has more than sufficient funds to meet its portion of the $163 million expenditure obligations ($43 million net) as per the active work programs approved by the Company's Board of Directors for 2011. During the first quarter, the Company spent $5.0 million of the 2011 Board of Directors approved $43 million in capital expenditures.
• As of the end of the first quarter, the Company has completed all previously announced farmout transactions with Tullow. Tullow has acquired a 50% interest in, and operatorship of, five of AOC's east African exploration blocks, comprised of four exploration blocks in Kenya and one exploration block in Ethiopia.
• The Company completed the amendment to their farmout agreement with Lion. The amendment reduced Lion's interest in Block 10BB to 10% (originally 20%) and eliminated its interest in Block 10A (originally 25%).
• The Company, together with its joint venture partner Lion, entered into the First Additional Exploration Phase under the Block 9 PSC in Kenya. As a result of the withdrawal of its two other joint venture partners, AOC will now hold a 66.7% working interest in the PSC and has been approved by the government as Operator of Block 9. Lion will hold the remaining 33.3%. The First Additional Exploration Phase commenced on December 31, 2010 and will expire on December 31, 2013 with a one well work commitment (minimum depth 1,500 meters).
• The Company continued to actively explore in East Africa:
  • In Block 10BB, the Company, together with its partners, is currently in the process of undertaking Full Tensor Gravity ("FTG") surveys and finalizing the prospect and lead inventory on Block 10BB. Drilling is scheduled to commence in the third quarter of 2011.
  • In Block 10A, the Company, together with its partners, has completed recording approximately 800km (gross) of 2D seismic. Seismic data acquired is currently being processed. The Company expects to drill a well on this block in the fourth quarter of 2011.
  • In Puntland, the Company has recently signed a letter of intent with a drilling contractor and plans to spud the first well in the Dharoor Block during the third quarter of 2011. A second well in the Dharoor Block is planned to commence following completion of the first exploration well.
  • In Block 9, the Company, together with its partners, has recently commenced 750km (gross) 2D seismic survey focused on the oil prone Kaisut sub-basin. The seismic crew has recently commenced recording and is anticipated to be completed during the third quarter of 2011.
  • The Company completed its seismic acquisition program in the Company's Ogaden area of Ethiopia, acquiring 500 km 2D seismic. The new data has been integrated with existing seismic to generate a series of new prospect maps. The Company continues to focus efforts on the large El Kuran prospect.

Keith Hill, President and CEO, commented, "Africa Oil continued to add highly prospective exploration acreage to its portfolio during the first quarter of 2011. Exploration activities continued throughout the quarter with FTG, 2D seismic and drilling preparations continuing on multiple blocks. The Company is very well financed, has a well diversified exploration portfolio and reputable joint venture partners. We are looking forward to the commencement of continuous drilling in 2011."

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BME UK Announces West Africa Contract Win

BME UK Announces West Africa Contract Win

BME UK

BME UK on Wednesday announced a contract worth GBP500,000 for the provision of its Specialised Machinery And Reduced flow Technology (SMART) in West Africa.

The company which designs and manufactures engineering equipment for the construction, marine and oil and gas industries will deploy seven of its personnel from Aberdeen, to carry out the work in the Bonga Field in Nigeria. This landmark deal follows the award of two further contracts with Hunting Energy Services International Ltd and BIS Salamis, both of which will be delivered by BME's operations in Aberdeen.

Scot Borland, director of BME UK comments, "The contract win in West Africa has been achieved in conjunction with local our partner, GCA. The work on the Bonga Field will utilise our revolutionary SMART system, to undertake deep tank and vessel cleaning. We have specially designed this technology to deliver outstanding results while reducing the waste, which deep tank and vessel cleaning produces; in some cases the level of waste is reduced by as much as 80%.

"Seven people from Aberdeen will travel to Nigeria to install and operate the SMART equipment. Training provision also forms part of the contract scope and six West African nationals will receive on-site training."

Aberdeen based Hunting Energy Services International Ltd will also be using BME UK's SMART system. Scot continues, "We have been awarded a contract by energy services provider Hunting Energy Services (Well Intervention) Ltd. This will be fulfilled from our offices in Aberdeen and is for the provision of a containerised ultra high pressure jetting unit and associated training."
Additionally the company has been contracted to undertake activity for leading international industrial services firm, BIS Salamis with the award of an order for the provision of six vertical air receiver frames.

Scot continues, "The technologies we supply are designed to provide results of the highest quality whilst having the added benefit of producing lower amounts of waste. This is therefore better for the environment and helps companies to comply with waste minimisation program requirements. Customers using our SMART system also benefit from lower costs because the amount of contaminated waste products which need to be treated or disposed of is reduced.

"We have recently invested GBP750,000 in the launch of our Specialist Cleaning Services; these initial contract wins validate our decision to make this level of investment and mean that we are well on the way to achieving our target of doubling our turnover to GBP3.4 million."

BME UK designs and manufactures a range of equipment for the construction, marine, oil and gas and decommissioning sectors. This includes decontamination modules for the treatment and disposal of NORM, high pressure fluid pumps for on and offshore use, munchers, handling systems, pipe cleaning systems phosphate systems, heat exchanger and bundle cleaning equipment, as well as traditional spoolers, powerpacks, workshops.

From its headquarters in Aberdeen, BME UK also offers a 24/7 maintenance back up services for clients who own or operate their own water/fluid pumps/pipe handling and cleaning systems. BME's skilled engineers have a wealth of knowledge on a range of pumps and work in global locations. Specialised Cleaning Services, a division of BME UK, provides full bundle cleaning services including surface preparation, internal and external pipe cleaning, drain cleaning, vessel cleaning and shutdown, waste removal and decommissioning services for global operators.

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PTTEP Turns Focus to S. America and Africa

PTTEP Turns Focus to S. America and Africa

Wednesday, April 27, 2011
Knight Ridder/Tribune Business News
by Nalin Viboonchart, The Nation, Bangkok, Thailand

Thai oil giant PTT Exploration and Production (PTTEP) is exploring business opportunities in South America and Africa, with a view to turning the areas into the company's third business pillar, following Thailand plus Burma and Australia plus Canada.

The company's success in collaborating with Norway's national oil company Statoil in the Kai Kos Dehseh (KKD) oil sands project in Canada late last year is the inspiration behind further expansion of oil and gas exploration and production overseas, said president and CEO Anon Sirisaengtaksin.

"Since we acquired a 40-percent stake in KKD for US $2.28 billion, many big energy players in the world have been looking at PTTEP. They were surprised at our having joined a big project like KKD, as they didn't think a small player like us would do such a big deal. Now, PTTEP is attracting the interest of those giant firms and some want to do business with us," he said.

Anon said PTTEP's existing operations were now very strong and stable. Its first business pillar is oil and gas exploration and production in the Gulf of Thailand and Burma.

This pillar comprises many fields, such as Thailand's Sirikit, Bongkot and Arthit and Burma's Yadana and Yetagun, for which PTTEP has to maintain production and revenue, as well as seeking new blocks for oil and gas production.

The company is also thinking about how to utilize new technology to increase capacity from the existing blocks, he said.

PTTEP is making its presence felt in the second pillar, which covers Australia and Canada. Production at the Montara field off Australia is expected to resume by the end of this year, while Canada commenced production early in the year.

The company is looking to invest in other Canadian exploration and production projects with Statoil, with the two businesses having just inked an agreement to cooperate in this area.

"PTTEP has set a target to have a production capacity of 900,000 barrels of oil equivalent per day [boe/d] by 2020. The production sites we have right now will produce half of our target by that year. Therefore, we have to look for new projects to help us accomplish the goal," said Anon.

He added that once PTTEP achieved its target, it should step up to become one of the top five oil and gas exploration and production companies in Asia, behind enterprises in China, Malaysia, Japan and South Korea. It is currently in the top 10.

The company presently aims to produce and sell nearly 300,000boe/d of oil and gas, while the KKD project is expected to have a capacity of 150,000boe/d by 2020. KKD is scheduled to produce 8,000boe/d by the end of this year, rising to 80,000-100,000 within the next five years.

The company president said PTTEP had divided its projects into three groups: those that are already generating revenue; those that are going to generate revenue; and projects in which it has to invest for the exploration stage.

KKD and Montara are projects that are going to make money and in which the company has to invest more in order to drive output.

The new projects PTTEP is seeking may be greenfield sites or existing projects. The latter type of deal is more likely to be concluded, as the company needs projects that can generate revenue immediately, Anon said.

"We're looking for many deals in South American countries such as Brazil, and some in Africa. These are unfamiliar areas for PTTEP, so we have to consider everything carefully. We need partners if we want to grow in these regions, compete with existing players and learn new things in which we are not experts," he said.

Anon said he would not commit to concluding any new deals this year, saying that it depended on the opportunities presented.

PTTEP is currently exploring about 20 projects in the Middle East and Canada. The company will consider all the risks and opportunities carefully before making a decision on any of these, he added.

Oil moves through $113 a barrel

Oil moves through $113 a barrel

April 11, 2011

By Virginia Harrison , MarketWatch 

SYDNEY (MarketWatch) — Crude-oil futures edged back up in electronic trading on Monday, but news of a possible peace agreement in Libya helped limit gains in Asian trading hours.

The benchmark contract for Nymex light sweet crude for May delivery /quotes/comstock/21n!f:cl\k11 (CLK11 112.42, -0.37, -0.33%) added 27 cents, or 0.2%, to $113.06 a barrel.

Gadhafi meets with African leaders
A delegation from the African Union meets with Libyan leader Moammar Gadhafi over the weekend in a diplomatic effort to stop the bloodshed in Libya. Video courtesy of Reuters. 

Crude prices have increased by more than 23% this year, according to data from FactSet.

Prolonged geopolitical uncertainty and violence in North Africa and the Middle East has been a driving factor behind the soaring oil price. 

But on Monday, there were reports that embattled Libyan leader Col. Moammar Gadhafi had agreed to a cease-fire put forward by the African Union. 

The reports cited South African President Jacob Zuma as saying Gadhafi had accepted a peace plan to end the conflict in Libya, which began after violent protests broke out in February. See report on Libyan peace plan. 

 

Elsewhere across the Middle East, however, political unrest raged over the weekend, killing dozens and leaving many wounded.

Africa Oil Inks Agreement for Lion Shares

Africa Oil Inks Agreement for Lion Shares

Monday, April 04, 2011
Africa Oil Corp.

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."

Anadarko to Mobilize Rig to W. Africa

Anadarko to Mobilize Rig to W. Africa

Monday, March 28, 2011

Anadarko Petroleum Corp.

 

Anadarko has finalized plans for its previously announced 2011 drilling campaign in the Liberian Basin. To carry out this program,
Anadarko intends to mobilize the Discoverer Spirit drillship from the Gulf of Mexico to West Africa after it finishes completion activities
on the third Caesar/Tonga well. Subject to the finalization of a contract amendment with the rig owner, the Discoverer Spirit is expected to begin drilling in West Africa during the third quarter.

As part of this program, Anadarko plans to drill its first Mercury appraisal well, located approximately seven miles west of the Mercury
discovery well offshore Sierra Leone in Block SL-07B-10. In addition, the company plans to drill the Jupiter exploration prospect on the
same block later in the year. Anadarko operates Block SL-07B-10 with a 65-percent working interest.

Offshore Liberia, the company plans to drill the Montserrado exploration well on Block 15, which is operated by Anadarko with a
57.5-percent working interest. Further to the east, on Block 10, Anadarko recently completed the acquisition of a 2,400-square-kilometer 3D seismic survey. Processing of the survey is expected to take approximately six to nine months, and with the
acquisition of this data, Anadarko will have 3D seismic information covering virtually all of its acreage in the Liberian Basin.

"Mobilizing the Discoverer Spirit to West Africa ensures our ability to deliver upon our exploration and appraisal programs in a timely
fashion in an area that offers tremendous potential with more than 30 identified Jubilee-like prospects on our acreage," said Al Walker,
Anadarko President and Chief Operating Officer. "We plan to keep the ENSCO 8500 rig in the Gulf of Mexico to conduct an extended well test at Lucius and, once we receive drilling permits, we are confident that we will be able to utilize the ENSCO 8500 and contract a
deepwater rig of opportunity to resume our development and exploration programs in the Gulf."