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Africa Oil Corp.: Africa Oil Signs Farmout Agreement With Raytec Over Somalia and Kenya Blocks

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  Published in House and Home on Thursday, August 20th 2009 at 12:42 GMT, Last Modified on 2009-08-20 12:42:25 by Market Wire
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VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 20, 2009) - Africa Oil Corp. ("Africa Oil" or "the Company") (TSX VENTURE:AOI) is pleased to announce that it has entered into a farmout agreement (the "Agreement") with Raytec Metals Corp. ("Raytec"), previously announced on May 28, 2009. The Agreement relates to production sharing contracts in which Africa Oil has an interest in both the State of Puntland, Somalia and the Republic of Kenya.

In Puntland, Somalia, Africa Oil will transfer a 15% (fifteen percent) license interest to Raytec in the Nogal and Dharoor Petroleum Production Sharing Agreements.

In Kenya, Africa Oil will transfer a 10% (ten percent) interest in the Block 9 Production Sharing Agreement, a 25% (twenty-five percent) license interest in the Block 10A Production Sharing Contract and a 20% (twenty percent) interest in the Block 10BB Production Sharing Contract, which was recently acquired by the Company pursuant to its acquisition of Turkana Energy Inc.

Raytec will pay a disproportionate share of costs associated with the planned work programs to be carried out, in both areas, in 2009 and 2010. Raytec has also agreed that it will, within 30 days of the execution of the Agreement, deposit USD 4 million into escrow as security for its payment obligations under the Agreement.

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

Rick Schmitt, President

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.