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by Stockwatch Business Reporter

West Texas Intermediate crude for December delivery lost 42 cents to $43.87 on the New York Merc, while Brent for December lost 23 cents to $47.19 (all figures in this para U.S.). Western Canadian Select traded at a discount of $14.65 to WTI ($29.22), up from a discount of $14.85. Natural gas for December lost 7.1 cent to $2.30. The TSX energy index lost 2.31 points to close at 183.72.

Keith Hill's Africa Oil Corp. (AOI), a Lundin company, shot up 41 cents to $2.11 on 1.21 million shares, after arranging a multimillion-dollar farm-out of various exploration licences in Kenya and Ethiopia. The more interesting assets are the Kenyan ones, specifically the Lokichar basin ones, which until now have been a 50-50 joint venture between Africa Oil and Tullow Oil. Now a Danish company called Maesrk Oil will join in. Maersk will give Africa Oil an upfront payment of $365-million (U.S.) and will make future contingent payments of up to $480-million (U.S.) for Lokichar project development. Africa Oil's chief executive officer, Keith Hill, said the deal will allow the company to keep a significant interest in the project "with no additional equity financing expected prior to first oil." That is good news for investors who are getting tired of all the recent dilution. In the last nine months, Africa Oil has raised $275-million (U.S.) at prices ranging from $2.10 (Canadian) to $2.74 (Canadian), sending its share count to 456 million from 309 million. Most of the participants in those financings have yet to make their money back, but they are in better shape than the investors who bought in 2012, when Africa Oil was first making a splash in Kenya. That was the year that Africa Oil and Tullow made Kenya's first major oil discovery through one of their Lokichar wells. Africa Oil's stock, which had been hovering around $2, promptly shot up past $11 in mid-2012. The next few years were considerably harder. Although the work on Lokichar went well, with plenty of new discoveries and a promising resource report, Africa Oil's stock began struggling under the weight of exploration failures at other assets, a new tax regime in Kenya and generally bad industry conditions. Today's update seems to be giving investors hope that Africa Oil can proceed with its Lokichar plans. These are still largely unspecified, although Tullow's management suggested during a summer presentation that production could start in 2019 or 2020.

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