Africa Oil Corp. has completed the previously announced farm-out with Maersk Olie og Gas A/S for Kenyan blocks 10BB, 13T and 10BA, Africa Oil said in a news release.
At completion, Africa Oil received US$427 million from Maersk. This amount represents $344 million of reimbursed past costs incurred by Africa Oil prior to the agreed March 31, 2015, effective date of the farmout and $83 million representing Maersk’s share of costs incurred between the effective date and Dec. 31, 2015, including a carry reimbursement of $15 million of exploration expenditures, the release said.
An additional $75 million development carry may be available to Africa Oil upon confirmation of existing resources, which is expected to take place in first-quarter 2016, the company said in the release. Upon reaching a final investment decision, Maersk will be obligated to carry Africa Oil for an additional amount of up to $405 million depending on meeting certain thresholds of resource growth and timing of first oil.
Africa Oil now holds 25% interests in Kenyan blocks 10BB, 13T and 10BA. Maersk holds a 25% interest in each of the blocks, and Tullow holds 50% interest in the blocks and serves as operator. For Kenya Block 12A, Africa Oil has a 20% interest; Tullow (operator), 65%; and Marathon, 15%. For Kenya Block 9, Africa Oil is the operator with 50% interest and Marathon holds the remaining 50%, according to the release.
The farm-out of 50% of Africa Oil’s interest in the Rift Basin and South Omo blocks remains subject to Ethiopian government approval, the release said. When the deal is complete, Africa Oil will hold a 25% interest and serve as operator of the Ethiopia Rift Basin Block, while Maersk will have 25% interest and Marathon, 50%. For the Ethiopia South Omo Block, Tullow will hold a 50% interest and serve as operator, while Marathon will hold 20% interest; Maersk, 15%; and Africa Oil, 15%, according to the release.
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