Information posted is accurate at the time of posting, but may be superseded by subsequent press releases.
Jan 7, 2010

Africa Oil Announces Independent Resource Estimate

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 7, 2010) - Africa Oil Corp. ("Africa Oil" or "the Company") (TSX VENTURE:AOI) is pleased to announce that an independent assessment of the Company's contingent and prospective resources has been completed by Gaffney, Cline & Associates. The independent assessment was carried out in accordance with the standards established by the Canadian Securities Administrators in National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities. The effective date of the report is December 1, 2009.

The Company's assets in East Africa contain major oil resource potential. Africa Oil operates Production Sharing Contracts in Kenya, Ethiopia and Puntland (Somalia). The Company also has a non-operated block in Kenya (Block 9). These blocks contain under-explored plays in basins that have proven and productive analogues, or where the petroleum system is calibrated by existing well and seismic data. Please see attached tables summarizing the in-place, contingent and prospective oil resources as contained in the Gaffney, Cline & Associates assessment.

Keith Hill, Africa Oil's President and Chief Executive Officer, commented: "We are very pleased that this independent assessment confirms the Company's view that we have assembled a highly prospective pool of East African exploration properties. The impact of a discovery in any of these countries would be of major significance to the Company. The aggressive seismic and drilling programs planned across all geographic areas of interest over the next two years are designed to convert these large potential resources into reserves."

Kenya: Contingent Resources and Prospective Resource (Source: Gaffney, Cline & Associates)

KENYA BLOCK 10BB SUMMARY OF GROSS IN-PLACE ESTIMATE

Licence Discovery Gross Best Estimate In Place (MMBbl)
Low Best High
  Block 10BB Loperot-1 7.0 15.0 63.0

KENYA BLOCK 10BB SUMMARY OF GROSS CONTINGENT RESOURCES
AS AT 1
ST DECEMBER, 2009

Licence Discovery Gross Contingent Resource (MMBbl)
1C 2C 3C
  Block 10BB Loperot-1 2.0 5.0 25.0

KENYA BLOCK 10BB SUMMARY OF NET CONTINGENT RESOURCES
AS AT 1
ST DECEMBER, 2009

Licence Discovery Net Contingent Resource (MMBbl)
1C 2C 3C
  Block 10BB Loperot-1 1.6 4.0 20.0

KENYA BLOCKS 9, 10A AND 10BB SUMMARY OF (UNDISCOVERED) OIL PROSPECTIVE RESOURCES AS AT 1ST DECEMBER, 2009

Licence Prospect / Lead P/L Gross Best Estimate of Oil In Place (MMBbl) Gross Best Estimate (MMBbl) AOC Working Interest (%) Net Best Estimate (MMBbl) GCoS
  Block 09 Bogal (Deep)(1) P 1,334 206 20 41.2 0.18
  Block 09 Bogal-2 (Shallow) P 378 95 20 19.0 0.16
  Block 09 Ndovu West-1 L 257 64 20 12.8 0.10
  Block 09 Ndovu West-2 L 191 48 20 9.6 0.12
  Block 09 Ndovu West-3 L 106 27 20 5.4 0.11
  Block 09 Duma East L 215 54 20 10.8 0.125
  Block 09 Duma North-1 L 533 133 20 26.6 0.11
  Block 09 Duma North-2 L 604 151 20 30.2 0.12
  Block 09 Duma North-3 L 191 48 20 9.6 0.11
  Block 09 Duma South-1 L 278 70 20 14.0 0.12
  Block 09 Duma South-2 L 106 26 20 5.2 0.11
  Block 09 Kaisut L 423 106 20 21.2 0.10
  Block 10A Lead A L 442 103 55 56.7 0.08
  Block 10A Lead B L 335 82 55 45.1 0.09
  Block 10A Lead C L 48 12 55 6.6 0.10
  Block 10A Lead D L 217 53 55 29.2 0.08
  Block 10BB Kamba P 276 83 80 66.4 0.14
  Block 10BB Kamuthai P 199 60 80 48.0 0.14
  Block 10BB Kapungu P 248 74 80 59.2 0.14
  Block 10BB Kegilai P 54 16 80 12.8 0.09
  Block 10BB Kalabata P 13 4 80 3.2 0.14
  Block 10BB Ngiri L 974 292 80 233.6 0.06
  Block 10BB Paa L 58 17 80 13.6 0.04
  Block 10BB Pofu L 107 32 80 25.6 0.05
  Block 10BB Mamba L 1,056 317 80 253.6 0.06
  Block 10BB Nyati L 111 33 80 26.4 0.05
  Block 10BB Tumbili L 218 55 80 44.0 0.04
  Block 10BB Kiboko L 50 15 80 12.0 0.06
  Block 10BB Kuru L 186 56 80 44.8 0.07
  Block 10BB Duma L 198 59 80 47.8 0.05
  Block 10BB Heroe L 266 80 80 64.0 0.06
  Block 10BB Fisi L 134 40 80 32.0 0.06
  Block 10BB Twiga L 186 56 80 44.8 0.05
  Block 10BB Chorea L 366 110 80 88.0 0.07
  Block 10BB Tai L 273 82 80 65.6 0.05
  Block 10BB Chura L 481 144 80 115.2 0.04
  Block 10BB Chui L 271 81 80 64.8 0.05
  Block 10BB Popo L 102 31 80 24.8 0.04

Notes:

  1. Net Prospective Resources are stated herein in terms of AOC's net Working Interest (WI) in the properties and, due to the very immature nature of these Prospective Resources, have not been computed as net entitlement volumes under the relevant PSC. In this regard these volumes stated herein will exceed the volumes which would arise to AOC under the terms of that PSC should a discovery of the size indicated be made and subsequently developed.
  2. It is inappropriate to report summed-up Prospective Resource volumes or to otherwise focus upon those of other than the 'Best Estimate'.
  3. The Geologic Chance of Success (GCoS) reported here represents an indicative estimate of the probability that the drilling of this prospect would result in a discovery which would warrant the re-categorisation of that volume as a Contingent Resource, although the volume of resource so categorized would reflect the results of the discovery well and may be significantly different (higher ir lower) from those reported here. These GCoS percentage values have not been arithmetically applied within this assessment.
  4. P/L = Prospect or Lead. A Lead is a geological feature that is currently poorly defined and requires more data acquisition and/or evaluation in order to be classified as a prospect for drilling.

(1) Bogal (Deep) is currently being tested by the Bogal-1 well that spudded on 28th October 2009. This well has a pTD of 5,500 m and is expected to take up to 6 months to complete.
Ethiopia: Prospective Resource (Source: Gaffney, Cline & Associates)

ETHIOPIA BLOCKS 6 AND 7 SUMMARY OF UNDISCOVERED OIL PROSPECTIVE RESOURCES
AS AT 1
ST DECEMBER, 2009

Licence Lead Reservoir Gross Best Estimate of Oil In Place (MMBbl) Gross Best Estimate (MMBbl) AOC
Working Interest (%)
Net Best Estimate (MMBbl) GCoS
Block 07 Lead A U. Hamanlei 335 88 55 48.4 0.14
Adigrat 400 83 55 45.7 0.09
Calub 422 106 55 58.3 0.12
Block 07 Lead B U. Hamanlei 199 50 55 27.3 0.12
Adigrat 206 52 55 28.6 0.08
Calub 389 98 55 53.9 0.10
Block 07 Lead C U. Hamanlei 415 103 55 56.7 0.12
Adigrat 447 112 55 61.6 0.08
Calub 346 86 55 47.3 0.10

Block 06
Lead D U. Hamanlei 161 40 55 22.0 0.13
Adigrat 447 112 55 61.6 0.09
Calub 134 34 55 18.7 0.11

Notes:

  1. Net Prospective Resources are stated herein in terms of AOC's net Working Interest (WI) in the properties and, due to the very immature nature of these Prospective Resources, have not been computed as net entitlement volumes under the PSA. In this regard these volumes stated herein will exceed the volumes which will arise to AOC under the terms of the PSA.
  2. It is inappropriate to report summed-up Prospective Resource volumes or to otherwise focus upon those of other than the 'Best Estimate'.
  3. The Geologic Chance of Success (GCoS) reported here represents an indicative estimate of the probability that the drilling of this prospect would result in a discovery which would warrant the re-categorisation of that volume as a Contingent Resource. These GCoS percentage values have not been arithmetically applied within this assessment.

ETHIOPIA BLOCKS 6 AND 7 SUMMARY OF UNDISCOVERED GAS PROSPECTIVE RESOURCES
AS AT 1
ST DECEMBER, 2009

Licence Lead Reservoir Gross Best Estimate of Gas In Place (BCF) Gross Best Estimate (BCF) AOC Working Interest (%) Net Best Estimate (BCF) GCoS
Block 07 Lead A Adigrat   750   525 55 288.8 0.09
Calub   1,605   1,129 55 620.9 0.12
Block 07 Lead B Adigrat   465   326 55 179.3 0.08
Calub   1,600   1,120 55 616.0 0.10
Block 07 Lead C Adigrat   1,035   724 55 398.2 0.08
Calub   1,445   1,010 55 555.5 0.10
Block 06 Lead D Adigrat   315   221 55 121.6 0.09
Calub   562   394 55 216.7 0.11

Notes:

  1. Net Prospective Resources are stated herein in terms of AOC's net Working Interest (WI) in the properties and, due to the very immature nature of these Prospective Resources, have not been computed as net entitlement volumes under the PSA. In this regard these volumes stated herein will exceed the volumes which will arise to AOC under the terms of the PSA.
  2. It is inappropriate to report summed-up Prospective Resource volumes or to otherwise focus upon those of other than the 'Best Estimate'.
  3. The Geologic Chance of Success (GCoS) reported here represents an indicative estimate of the probability that the drilling of this prospect would result in a discovery which would warrant the re-categorisation of that volume as a Contingent Resource. These GCoS percentage values have not been arithmetically applied within this assessment.

Puntland (Somalia): Prospective Resource (Source: Gaffney, Cline & Associates)

PUNTLAND SUMMARY OF UNDISCOVERED OIL PROSPECTIVE RESOURCES
AS AT 1
ST DECEMBER, 2009

Licence Lead Reservoir Gross Best Estimate In Place Oil (MMBbl) Gross Best Estimate
(MMBbl)
AOC Working Interest (%) Net Best Estimate
(MMBbl)
GCoS
Nogal Block Kalis East Jesomma 1,830 457 65 297.1 0.11
Gumbero 681 171 65 111.5 0.09
Gabredarre 1,663 416 65 270.4 0.13
Kalis South Jesomma 207 52 65 33.8 0.08
Gumbero 114 28 65 18.2 0.07
Gabredarre 278 70 65 45.5 0.09
Kalis SE Jesomma 1,079 268 65 174.2 0.11
Gumbero 611 154 65 100.1 0.09
Gabredarre 1,457 364 65 236.6 0.13
Kalis SW Jesomma 330 83 65 54.0 0.10
Gumbero 184 46 65 29.9 0.08
Gabredarre 453 113 65 73.4 0.12
Kalis West Jesomma 319 80 65 52.0 0.10
Gumbero 176 44 65 26.0 0.08
Gabredarre 421 105 65 68.3 0.12
Nogal SE-A Jesomma 378 95 65 61.8 0.11
Gumbero 210 53 65 34.5 0.09
Gabredarre 507 126 65 81.9 0.13
Nogal SE-B Jesomma 227 57 65 37.1 0.11
Gumbero 126 32 65 20.8 0.09
Gabredarre 308 77 65 50.1 0.13
Nogal South Jesomma 293 73 65 47.5 0.12
Gumbero 162 40 65 26.0 0.10
Gabredarre 391 98 65 63.7 0.14
Darin Block Dharoor Jesomma 1,196 299 65 194.4 0.08
Gumbero 664 166 65 108.0 0.06
Gabredarre 1,760 440 65 286.0 0.09
Lead 1 Jesomma 360 90 65 58.5 0.06
Gumbero 200 50 65 32.5 0.05
Gabredarre 520 130 65 84.5 0.07
Lead 2 Jesomma 220 55 65 37.8 0.06
Gumbero 120 30 65 19.5 0.05
Gabredarre 320 80 65 52.0 0.07
Lead 3 Jesomma 144 36 65 23.4 0.06
Gumbero 80 20 65 13.0 0.05
Gabredarre 220 55 65 35.8 0.07

Notes:

  1. Net Prospective Resources are stated herein in terms of AOC's net Working Interest (WI) in the properties and, due to the very immature nature of these Prospective Resources, have not been computed as net entitlement volumes under the PSA. In this regard these volumes stated herein will exceed the volumes which will arise to AOC under the terms of the PSA.
  2. It is inappropriate to report summed-up Prospective Resource volumes or to otherwise focus upon those of other than the 'Best Estimate'.
  3. The Geologic Chance of Success (GCoS) reported here represents an indicative estimate of the probability that the drilling of this prospect would result in a discovery which would warrant the re-categorisation of that volume as a Contingent Resource. These GCoS percentage values have not been arithmetically applied within this assessment.

Definitions and Cautionary Statements

Significant Positive and Negative Factors Relevant to the Resources Estimates

This news release contains forward looking information including, but not limited to, estimated resources. The forward looking information is based on current expectations and is subject to a number of risks and uncertainties which could cause actual results to differ materially from those anticipated.

These risks include, but are not limited to the following:

Risks associated with ever making a discovery

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; however, new data or information is likely to have a material effect on the resource assessment values. There is no certainty that any portion of the resources will be discovered. If 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

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 GCA), 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.

Risk Associated with the Classifications

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 in the future 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. The Company's exploration and development programs in Puntland, Ethiopia and Kenya 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

There is no certainty the Company will prepare and approve 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.

Access to Infrastructure

Africa Oil's ability to produce and market hydrocarbons from any potential discoveries will depend on its ability to access suitable infrastructure. The Company may also be affected by deliverability uncertainties related to the proximity of its potential production to pipelines and processing facilities and operational problems affecting such pipelines and facilities as well as potential government regulation relating to price and the export of oil and gas. Currently there is limited local infrastructure and markets for oil, natural gas and condensate and export infrastructure to enable other markets to be accessed has not yet been developed. Africa Oil will work with its partners and government authorities to evaluate the commercial potential and technical feasibility of any discovery made.

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 activity.

Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets. It is also appropriate to classify as contingent resources the estimated discovered recoverable quantities associated with a project in the early evaluation stage. Contingent Resources are further classified in accordance with the level of certainty associated with the estimates and may be subclassified based on project maturity and/or characterized by their economic status.

  • Low Estimate: This is considered to be a conservative estimate of the quantity that will actually be recovered. It is likely that the actual remaining quantities recovered will exceed the low estimate. If probabilistic methods are used, there should be at least a 90 percent probability (P90) that the quantities actually recovered will equal or exceed the low estimate.
  • Best Estimate: This is considered to be the best estimate of the quantity that will actually be recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate. If probabilistic methods are used, there should be at least a 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best estimate.
  • High Estimate: This is considered to be an optimistic estimate of the quantity that will actually be recovered. It is unlikely that the actual remaining quantities recovered will exceed the high estimate. If probabilistic methods are used, there should be at least a 10 percent probability (P10) that the quantities actually recovered will equal or exceed the high estimate.

There are several contingencies that prevent the classification of the contingent resources as reserves. Africa Oil has no definitive plans to develop the oil resources in Block 10BB at this time and accordingly these are considered contingent resources. An evaluation has yet to be conducted in order to determine the economic viability of these contingent resources.

Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective Resources have both an associated chance of discovery and a chance of development. Prospective Resources are further subdivided in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and may be subclassified based on project maturity.

Prospective resources are undiscovered resources that indicate development potential in the event the discovery is made and is commercial, and they should not be construed as reserves or contingent resources.

Africa Oil Corp. is a Canadian oil and gas company with assets in Kenya, Somalia and Ethiopia. Africa Oil's East African holdings are in what is considered a truly world-class exploration play fairway. The Company's total gross land package in this prolific region is in excess of 200,000 square kilometers - an area roughly the size of Great Britain. The East African Rift Basin system is one of the last of the great rift basins to be explored. New discoveries have been announced on all sides of Africa Oil's virtually unexplored land position including the major Heritage/Tullow Albert Graben oil discovery in neighbouring Uganda. Similar to the Albert Graben play model, Africa Oil's concessions have older wells, a legacy database, and host numerous oil seeps indicating a proven petroleum system. Good quality existing seismic show robust leads and prospects throughout Africa Oil's project areas. The Company is listed on the TSX Venture Exchange under the symbol "AOI".

ON BEHALF OF THE BOARD

Keith Hill, President and CEO






FOR FURTHER INFORMATION PLEASE CONTACT:

Africa Oil Corp.
Sophia Shane
Corporate Development
(604) 689-7842
(604) 689-4250 (FAX)
africaoilcorp@namdo.com
www.africaoilcorp.com