Tullow Oil and Africa Oil to Jointly Explore New East African Rift Trend

Africa Oil Corp. (TSXV:AOI) reported that it has signed a definitive farmout agreement with Tullow Oil plc whereby Tullow will acquire a 50% interest in, and operatorship of, three of Africa Oil’s east African exploration blocks, comprised of two exploration blocks in Kenya and one exploration block in Ethiopia.

The press release is quoted as saying:

Under the terms of the Tullow farmout agreement, Tullow will acquire a 50% interest in, and operatorship of, Blocks 10BB and 10A in Kenya and of the South Omo Block in Ethiopia. In consideration for the assignment of these interests, Tullow will pay to Africa Oil approximately US$10MM, representing 50% of Africa Oil’s past costs in the blocks, subject to a post-closing audit. Tullow will also fund Africa Oil’s working interest share of future joint venture expenditures in these blocks until the cap of US$23.75MM is reached. This cap is expected to cover the upcoming seismic program in each of the three blocks as well as the majority of costs for at least 2 wells on these areas. Once the expenditure cap has been met, Africa Oil will be responsible for its working interest share of future costs.

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