Dr. Roger Tucker reports

AFRICA OIL ANNOUNCES STRATEGIC FARM DOWN AGREEMENT FOR ITS ORANGE BASIN BLOCK 3B/4B

Africa Oil Corp.'s wholly owned subsidiary, Africa Oil SA Corp. (AOSAC), has signed a strategic farm-down agreement with TotalEnergies EP South Africa BV and QatarEnergy International E&P LLC for the Orange basin's Block 3B/4B, offshore South Africa. Through AOSAC, the company currently has an operated 26.25-per-cent interest in Block 3B/4B and has entered the agreement jointly with its partners, Eco (Atlantic) Oil & Gas Ltd. and Ricocure (Proprietary) Ltd., through their respective subsidiaries.

On completion of the transaction, Africa Oil will retain a 17-per-cent interest, and the operatorship of Block 3B/4B will transfer to TotalEnergies.

Transaction highlights:

• Maximum transaction value of up to $46.8-million to Africa Oil.
• Africa Oil will receive, subject to achieving certain milestones defined in the agreement, staged payments for a total cash amount of $10-million, of which $3.3-million is payable at completion, as defined herein, and the remaining balance in two successive payments conditional upon achievement of key operational and regulatory milestones.
• Africa Oil will also receive a full carry of its 17-per-cent retained share of all joint venture costs, up to a cap, that is repayable to TotalEnergies and QatarEnergy from production, and which is expected to be adequate to finance the company's share of drilling for up to two wells on the licence.

The completion of the agreement is subject to the satisfaction of customary conditions precedent, including approvals from the government of South Africa.

Africa Oil chief executive officer Dr. Roger Tucker commented: "Attracting TotalEnergies and QatarEnergy as our new partners in Block 3B/4B is an endorsement of the exploration potential of the block. These opportunities are on trend with the discoveries in Namibia's Orange basin, including Venus in Block 2913B. Both companies have deep geological knowledge of the basin with successful nearby discoveries. TotalEnergies, as the new operator, also brings extensive deepwater drilling and development expertise.

"Africa Oil has an unrivalled position amongst its independent E&P [exploration and production] peer group in this world-class basin. This includes our indirect interest in the Venus discovery and the ongoing appraisal and exploration campaign on Block 2913B."

About Block 3B/4B

Block 3B/4B covers an area of 17,581 square kilometres within the Orange basin, offshore South Africa, in water depths ranging between 300 metres and 2,500 m. This block lies to the southeast and on trend with a number of oil discoveries, including Venus and Graff. Africa Oil has approximately 14,000 square kilometres of two-dimensional seismic and 10,800 square kilometres of three-dimensional seismic over Block 3B/4B, and has identified a large opportunity set of exploration prospects, with the majority of the prospects lying in approximately 1,500 m of water.

Africa Oil currently has a 26.25-per-cent interest in Block 3B/4B, with Eco holding a 20-per-cent interest and Ricocure with a 53.75-per-cent interest. On the completion of the farm-down transaction, which is subject to the satisfaction of customary conditions precedent, including approvals from the government of South Africa, the interests in Block 3B/4B will comprise: 17 per cent held by Africa Oil; 33 per cent held by TotalEnergies; 24 per cent held by QatarEnergy; 19.75 per cent held by Ricocure; and 6.25 per cent held by Eco. Africa Oil will transfer its operatorship of Block 3B/4B to TotalEnergies on completion.

About Africa Oil Corp.

Africa Oil is a Canadian oil and gas company with producing and development assets in deepwater Nigeria and an exploration/appraisal portfolio in western and southern Africa, as well as Guyana.

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