http://www.marketwatch.com/stor...-call-2015-11-09-1173114VANCOUVER, BRITISH COLUMBIA, Nov 09, 2015 (Marketwired via COMTEX) -- Africa Oil Corp. ("Africa Oil" or the "Company") (AOI)(omx:AOI) is pleased to announce that it has entered into a definitive farmout agreement with Maersk Oil & Gas A/S, a Danish oil and gas company owned by the Maersk Group ("Maersk") whereby Maersk will acquire 50% of Africa Oil's interests in Blocks 10BB, 13T and 10BA in Kenya and the Rift Basin and South Omo Blocks in Ethiopia in consideration for reimbursement of a portion of Africa Oil's past costs and a future carry on certain exploration and development costs.
Under the terms of the farm-out agreement, upon closing of the transaction Maersk will pay Africa Oil US$350 million as reimbursement for approximately 50% of past costs incurred by Africa Oil prior to the agreed March 31, 2015 effective date. Maersk will also reimburse Africa Oil for its acquired working interest share of costs incurred between the effective date and the closing date. Commencing on the effective date, Maersk will also carry up to US$75 million of the Company's share of development expenditures upon confirmation of resources and US$15 million of the Company's share of exploration expenditures. In addition, upon Final Investment Decision ("FID"), Maersk will also carry up to US$405 million of Africa Oil's working interest share of development expenditures for the Lokichar Development Project. The total carry amount will depend on the Lokichar Development Project meeting certain thresholds of resource growth, and the timing of first oil. The transaction is subject to host government and applicable regulatory approvals.
Upon closing, the respective working interests in each of Africa Oil's blocks will be:
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Kenya Block 10BB Africa Oil - 25% Maersk - 25% Tullow -
50%(i)
Kenya Block 13T Africa Oil - 25% Maersk - 25% Tullow -
50%(i)
Kenya Block 10BA Africa Oil - 25% Maersk - 25% Tullow -
50%(i)
Ethiopia Rift Basin Africa Oil - Maersk - 25% Marathon - 50%
25%(i)
Ethiopia South Omo Africa Oil - 15% Maersk - 15% Tullow - Marathon
50%(i) - 20%
Kenya Block 12A Africa Oil - 20% Tullow - 65%(i) Marathon - 15%
Kenya Block 9 Africa Oil - Marathon - 50%
50%(i)
(i) Denotes Operator
(ii) Net Working Interests are subject to back-in rights or carried working
interests, if any, of the respective governments or national oil
companies of the host governments.
Keith Hill, Africa Oil's CEO, commented, "We are delighted to have attracted a partner of the stature of Maersk Oil into our East Africa venture. We believe they bring significant technical, financial and infrastructure development capabilities at a critical time when the Lokichar Development and related pipeline projects are moving towards sanction. Their parent company's standing as the world's leading logistical and transportation company will provide benefits not only to the project but to the host countries as well. This transaction allows Africa Oil to keep a significant stake in the project with no additional equity financing expected prior to first oil. The resulting strength of Africa Oil's balance sheet will allow it to consider additional growth opportunities in this highly attractive acquisition and divestiture market."
J.P. Morgan Securities LLC is acting as exclusive financial advisor to Africa Oil Corp on this transaction.