A Lundin Group Company. Africa Oil Corp. May, 2011

Transcription

1 A Lundin Group Company 1 Africa Oil Corp. Portfolio oto o&go Growth May, 2011

2 2 Multiple proven rift plays Africa Oil Assets Tertiary rifts (Kenya & Ethiopia) Cretaceous rifts (Kenya, Mali) Jurassic rifts (Puntland Somalia) Permo Tr rifts (Ethiopia) All of AOC plays are extensions of proven multibillion barrel rifts

3 3 Play Summary Seismic programs completed on majority of blocks Aggressive two rig drilling campaign to kick off Q wells in Puntland-Somalia Jurassic rift basin 1 well in Ethiopia Ogaden Basin 3-5 wells in Kenya & Ethiopia 1-2 wells in Cretaceous rift basin Strong balance sheet $118MM in cash with a $43MM capital budget in 2011 Resource update completed resulting in 24% increase

4 4 Tullow Partnership Tullow s Ugandan discoveries now likely exceed 2 BBO in the Lake Albert region. Tullow brings a 97% success rate to our new partnership. Tullow will pay $10 MM past costs and carry AOC for next $23.75 MM. Tullow brings to the partnership: Drilling expertise and staff Seismic processing expertise Talented exploration personnel Access to the Uganda export pipeline

5 5 Kenya Assets AOC holds 6 blocks in Kenya AOC operates Block 9 Tullow operates all others

6 6 Kenya Block 10BB 13T N-Kerio Area = 12,638 km 2 AOC holds a 40% Carried Interest and will secure an additional 10% paying interest, post-lion deal S-Kerio Lake Turkana Loperot oil discovery & oil recovered in uphole de-risks oil charge Lokichar Rift Analogous to Albert Graben of Uganda with estimated 2.5 BBO Loperot-1 Oil in Uphole Kerio Trend 1 st well planned for Sept-2011 Loperot Trend 12A 10BB 2010 program Legacy seismic Seismic program (615 km) completed Oct Prospects and Leads Leads with oil seeps on lake

7 7 Block 10BB Fise Prospect SW Metres FISE NE Line LOK WESTERN RIFT BOUNDING FAULT LOKHONE SH LOKHONE SH MRKR LOKHONE SS FISE 5km Closure: P50: 5.0 km2 (1,300 acres); P10: 18 km2 (4,500 acres) Internal Estimated Resources (100%): P50: 45 MMBO; P10: 180 MMBO Analogous to Tullow Lake Albert Discoveries; e.g. Kingfisher, Mputa, Waraga

8 8 Block 10BB- Kamba Prospect SW NE P50 P10 5 KM KAMBA PROSPECT Depth Structure, CI: 20m Vertical relief: 730 m Internal Estimated Resources (100%): Stacked Tertiary SS Reservoirs Avg. Porosities 10-18% P50: 150 MMBO (15 sq km) P10: 400 MMBO (55 sq km)

9 Block 10BA- North Lake Turkana AOC acquired 50% WI through Centric acquisition. Tullow operates with 50% WI, paying 80% Multiple oil slicks interpreted from satellite data. South North Prospective block resources (unrisked)* P BBO P BBO 15+ leads from existing seismic data. * Independent technical report NI reserves study by Gustavson Associates published January, 2010 Seismic i Leads Eliye Springs 25 km

10 Block 10BA- North Lake Turkana South North Prospective block resources (unrisked)* P BBO P BBO 15+ leads from existing seismic data. * Independent technical report NI reserves study by Gustavson Associates published January, 2010 Seismic i Leads Eliye Springs 25 km

11 Blocks 12A / 13T AOC holds 50% WI, Tullow: 50% WI (Operator) 13 T 10 BB 10A Protection acreage along Tertiary rift trend south of 10BB Highly underexplored with no seismic or wells drilled Full Tensor Gravity (FTG) 12 A FTG Surveys for Blocks 12A, 13T Miocene Source Rock in Outcrop Good to excellent, Type I; 3% TOC National parks/game reserves 50km Digital Elevation Model

12 Block 10A Area = 14,597 km 2 Lake Turkana AOC 30% CWI, Tullow (OP): 50% Block 10 BA Block 10A Anza Rift: Cretaceous rift extending into Kenya from Sudan Block 9 3 wells with up to 2,000 of residual oil 25km Block 10BB National Park Late structuring likely breached drilled traps Program 2010: Completed 750km 2D seismic

13 Anza Basin Play Concepts, Block 10A SW Paipai Prospect NE 5km AOC Exploration Strategy: Paipai Prospect Find & drill structural traps that have maintained structural integrity it through h Tertiary readjustments 5km

14 14 Block 9 Lake Turkana Block 10BA Block 10BB Block 10A Block 09 Africa Oil Kenya 100% Anza Cretaceous Rift Basin Continuation of Sudan Rift Trend 2010 Bogal Gas Discovery Marsabit National Park NDovu 2011 Program: Acquire km 2D seismic in Kaisut area (oilprone leads) Block 12A 70 km Ki Kaisut Bogal Re-enter, redrill (?), test Bogal

15 Block 9- Bogal Discovery Bogal Tertiary Sand/Shale Cretaceous clastics ( m) 100 sq km closure 91 m net gas pay with 5-11% porosity ~3 TCFG recoverable Mega Fractures documented in LK SS Significant losses while drilling Image Logs m Upper Cretaceous Sand/Shale Lower Cretaceous Sand/Shale Volcanic Marker L. Cretaceous Volcanics Lower Cretaceous Sand/Sh Bogal-1 Top Lower Cretaceous 5km

16 Kenyan Energy Market Kenya Total Primary Energy Supply ktoe Geothermal/Wind 6%, Biomass 77% Hydro 1% Oil 16% Source: IEA, 2010 Demand growth is robust over a sustained period (Annual growth rate ~5%) The majority of energy demand is satisfied by: Traditional sources (Kenyan forests 40 yrs ago covered 11% of country, now at 1.5%) Hydro/geothermal (with limited scope for growth) Imported oil (with environmental and foreign exchange impacts) Restricted power supply & distribution has substantial impact on overall Kenyan economy Natural monetisation route for Kenyan gas will involve the power sector

17 Ndovu Lead, Block 9 Ndovu (TD 4,267 m, 1988) Oil & gas shows: m Oil in cores, 2 DST s with gas Sprung trap in fault closure Undrilled simple closure Block 10A Block 09 Overpressured Marsabit National Park Ndovu 50 km

18 Ethiopia AOC holds blocks in 3 trends: Tertiary Rift (South Omo) Karoo Rift (Ogaden) Jurassic rift (Adigala) Exploration activity in area increasing but remains under explored Proven petroleum systems Significant nearby discoveries, shows, seeps Drilling slated for 2012 (2 wells)

19 South Omo Area = 29,465 km 2 AOC holds 30% WI, Tullow Operates with 50%. Omo National Park South Omo Block Mago National Park Rift Valley Study Area Extension of Tertiary rift trend north of Lake Turkana Unexplored with no previous seismic i or wells Sudan Kenya Acquire Full Tensor Gravity, geochem and seismic FTG Survey D Provisional Seismic Lake Turkana

20 20 Rift Valley Block (JSA) Location Map Tar reported along shoreline Multiple oil slicks identified on landsat Acquired block-wide high resolution airborne gravity & magnetics in 2011

21 El Kuran Appraisal, Ogaden Block 8 Structure Map Top Jurassic W El Kuran-1 E El Kuran-2 W El Kuran-1 E AOC Operates with 55% WI Light oil recovered from Jurassic limestones in El Kuran 1 & 2 5 km 2011 Proposal: Test El Kuran structure with horizontal well

22 22 Ethiopia - Adigala Area = 27,193 km Jurassic Source Rocks AOC holds 50% interest Field work confirms source, seal and reservoir. 2D Program: 523 km m Jurassic Source Rock TOCs: 2 4% Good Jurassic source rocks confirmed in outcrop, extracts tied to oil in wells. Seismic i acquired din 2009 is poor quality. Additional test seismic line and other G&G work. No outstandingwork No outstanding work commitments.

23 23 New Puntland Focused Vehicle DEAL MOU signed btwn AOC & NewCo AOC will sell their 60% interest in both Dharoor and Nugaal NewCo to take Operatorship, subject to Gov approval FINANCING AOC to put in $10 MM cash and NewCo to put in $25 MM cash Proceeds to fund the drilling of two wells in Puntland OWNERSHIP AOC to hold 57% of NewCo subsequent to financing PROFILE 70.6 million shares outstanding/111.7 million fully diluted NewCo Listed: TSX-V 60% working interest in Nugaal and Dharoor oil exploration projects in Puntland, Somalia Service contract with AOC to provide technical, operational and financial support President: David Grellman; Directors: Keith Hill, Ian Gibbs

24 24 Puntland Cash infusion through NewCo near completion LOI executed for rig and services Contract negotiations underway Spud anticipated August, 2011 New geophysical mapping identifies robust prospects Control Risks Group validates AOC security assessment and mitigation plan

25 25 Dharoor Block, Puntland Darin 1 well drilled in 1958 on the flank of the rift; found oil across several zones. AGIP brought in pumping units and tanks for testing/development. DARIN 1 DOWACO AOC, with new seismic data, has mapped several large prospect including: SHABEEL NORTH Shabeel: Most Likely 300 MMBO recoverable Shabeel N:Most N.: likely 375 MMBO recoverable (internal estimate) SHABEEL DHAROOR BLOCK DHAROOR BLOCK TURONIAN MFS DEPTH M CI= 50 METRES 0 10 KM

26 Dharoor Block SW Meters SHABEEL SHABEEL NORTH NE Turonian Cret CetMrkr L Cret Carb MJ Uncf Line AOC

27 Community Development 27 CD projects include: CD projects must have: School rehabilitation Religious neutrality Bursary Fund Sustainability Farm tools Local content Birkahs (water storage) Potential for capacity building Human health posts High Impact relative to cost Medicines for livestock Political neutrality Support for hospitals Solar lights/cookers

28 28 World Class Potential in Multiple Petroleum Systems Current Working Interests Pro forma Working Interests t (Lion Energy Corp. Acquisition) 4 Geographic Region PSC/PSA Operator Gross Best Estimate (MMBbl) AOC Working Interest Net Best Estimate (MMBbl) AOC Working Interest Net Best Estimate (MMBbl) Puntland (Somalia) 2 Nugaal AOI 3, % 1, % 1,861 Puntland (Somalia) 2 Dharoor AOI 1, % % 871 Kenya 2 10BB Tullow 2, % % 1,033 Kenya 2 9 AOI 1, % % 1,399 Kenya 2 10A Tullow % % 127 Ethiopia 2 2&6 7&8 AOI % % 85 8,596 4,020 5,376 Kenya 3 10BA Tullow 2, % 1, % 1,094 10,784 5,114 6,470 1 This summary table was prepared by Company management for the convenience of readers. 2 Please refer to the Company's press release dated March 29, 2011 for details of the prospective resources by prospect and lead, including the geologic chance of success 3 Please refer to independent resource evaluation report, dated January 1, 2010 posted on February 11, 2010 at under Centric Energy Corp. 4 The Company has announced a letter of intent, whereby it intends to acquire Lion Energy Corp. who hold working interests in Blocks 9, 10BB, Dharoor and Nugaal 5 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 6 Net Prospective Resources are stated herein in terms of the Company's net working interest in the properties. Due to the very immature nature of these Prospective Resources, have not been computed as net entitlement volumes under the PSAs/PSCs. In this regard the

29 29 Size of the Prize Prospective Resources Net Best Estimate (MMbbl) Indicative Risk Factor Risked Potential Prospective Resources Potential Value ($MM) 20% 1,294 5,474 6,470 10% 647 2,737 1% Recently completed East African sale transaction: Heritage sale of interest in Uganda Lake Albert (Blocks 1 & 3A) to Tullow 355 Mmboe mean working interest contingent resource sold $1.5 billion transaction value $4.23/boe The above summary table was prepared by the Company for the convenience of readers. 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. Net Prospective Resources are stated herein in terms of the Company s Working Interest (WI) in the properties and, due to the very immature nature of these resources, have not been computed as net entitlement volumes under the PSAs. In this regard, the volumes stated herein will exceed the volumes which will arise to AOC under the PSA terms. The net best estimate includes proforma volumes assuming completion of the recently announced Lion Energy Corp. acquisition. This acquisition has not closed.

30 30 A history of value creation Company 2002 Present Notes Tanganyika Valkyries $0.55 / share $31.50 / share $13.5 million MC $1.9 billion MC $0.45 / share $4 million MC $16.00 / share $750 million MC Sold to Sinopec 2008 Sold to Lundin Petroleum 2006 Red Back $1.35/share (2000) $30.50/share Soldto Kinrossin 2010 $45.4 million MC $8.98 billion MC Lundin Petroleum BlackPearl NGEx Resources U $0.41 / share U $101 million MC U $10.94 / share U $3.2 billion MC + Enquest spin off US $1.7 billion MC $0.25 / share $8.50/ share $2.1 million MC $2.4 billion MC $0.40/share $33.8 million MC $3.69/share $547 million MC Active Active Active Lundin Mining $0.60/share $9.30/share Active $4.6 million MC $5.4 billion MC

31 31 Summary AOC has assembled a robust highly prospective East African portfolio that spans 4 different proven petroleum provinces with multi-billion barrel potential AOC has experienced management and staff with offices in Vancouver, Calgary, Addis Ababa, Nairobi, and Bosasso AOC has secured excellent partners, such as Tullow, to help fund exploration programs and guide/accelerate operational activities iti An aggressive drilling campaign will begin in September-2011: two rigs operating continuously to drill 7 to 10 wells by end of 2012 AOC balance sheet is strong with plenty of dry powder for either new ventures, acquisitions, or appraisal/testing of successful wells 196 million shares outstanding 209 million shares fully diluted Market Cap: $353 million AOI TSXV AOI OMX Stockholm

32 32 AOI has a strong management team Keith Hill, President and CEO Mr. Hill has over 25 years experience in the oil industry including international new venture management and senior exploration positions at Occidental Petroleum and Shell Oil Company. His education includes a Master of Science degree in Geology and Bachelor of Science degree in Geophysics from Michigan State University as well as an MBA from the University of St. Thomas in Houston. Prior to his involvement with Africa Oil, Mr. Hill was President and CEO of Valkyries where he led the company through rapid growth and ultimately a highly successful $700 million takeover by Lundin Petroleum. In addition, Mr. Hill was one of the founding directors of Tanganyika Oil which was recently the subject of a $2 billion takeover by Sinopec International Petroleum. James Phillips, COO Before joining Africa Oil, Mr. Phillips was Vice President Exploration Africa and Middle East for Lundin Petroleum AB where he played a pivotal role in securing the majority of Africa Oil s current portfolio. Mr. Phillips is a graduate of the University of California, Berkeley and San Diego State University where he obtained BS and MS degrees, both in Geology. He has over 25 years of experience in the oil industry including senior positions with Shell Oil company and Occidental including heading up Oxy s African exploration ventures. Paul Martinez, VP Exploration Dr. Martinez, most recently Director of International Business Development with Occidental Petroleum Corporation, has over 20 years of domestic US and international senior management experience in oil and gas exploration and development, including projects in the Texas Gulf Coast, Permian Basin, Rockies, Latin America, Africa, Middle East, and Russia. He has held overseas management positions for Oxy in Libya, Oman and Peru. Dr. Martinez holds a doctorate in petroleum geology from Stanford University and a Bachelor of Science degree in geology from the University of Texas at Austin. Dr. Martinez will be based in the Africa Oil Calgary technical office and will be responsible for all geological and geophysical activities of the Company. Ian Gibbs, CFO Ian Gibbs is a Canadian Chartered Accountant and a graduate of the University of Calgary where he obtained a bachelor of commerce degree. Ian Gibbs has held a variety of prominent positions within the Lundin Group of Companies; most recently as CFO of Tanganyika Oil Company Ltd. where he played a pivotal role in the recent $2 billion acquisition by Sinopec International Petroleum. Prior to Tanganyika, Mr. Gibbs was CFO of Valkyries Petroleum Corp which was the subject of a $700 million takeover. David Grellman, VP Operations Mr. Grellman is General Management/Operations professional with a unique blend of technical and management skills combined with extensive operations experience in the upstream global oil and gas industry. Mr. Grellman spent the majority of his career at Occidental Oil and Gas Corporation as Exploration Manager or General Manager in numerous countries including the Philippines, Sri Lanka, China, Syria Albania and Pakistan. Gary Guidry, Director Mr. Guidry brings to the Board of Africa Oil Corp. an extensive background and proven track record in international petroleum development and project execution. A Petroleum Engineer by training, he is an Alberta registered Professional Engineer with expertise in diverse environments ranging from deep water West Africa and the Gulf of Mexico, South American rainforests to the deserts of the Middle East. Most recently, Mr. Guidry was President of Tanganyika Oil Company Ltd. where he led the company from an early stage oil development project in Syria to a $2 billion takeover by Sinopec International Petroleum in late 2008.

33 33 Cautionary Statements This document contains statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as legal and political risk, civil unrest, general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events and management s capacity to execute and implement its future plans. Actual results may differ materially from those projected by management. Resource and reserve references on other companies have been sourced from websites and other public information and may not be accurate.