Africa Oil Corp. holds a 45% equity interest in Horn Petroleum Corp. Horn Petroleum holds interests in 36,168 km² (gross) of acreage in respect of the production sharing agreements ("PSAs") in the Dharoor Valley Exploration Area and the Nugaal Valley Exploration Area located in Puntland (Somalia).

Africa Oil Corp. Block Interests as of January 2014

AOC WI% Operator Other Partners Gross
Area (km²)
Kenya:
10BB 50% Tullow Tullow 50% 8,834
10BA 50% Tullow Tullow 50% 21,084
12A 20% Tullow Tullow 65%, Marathon 15% 20,365
13T 50% Tullow Tullow 50% 6,296
9 50% AOC Marathon 50% 31,564
Ethiopia:
Adigala 50% AOC New Age 50% 27,200
7&8 30% New Age New Age 40%, Afren 30% 23,162
S. Omo 30% Tullow Tullow 50%, Marathon 20% 22,034
Rift Basin 100% AOC   42,519
Puntland:
Dharoor 27% Horn Horn 60% (AOC 44.7% of Horn) Red Emperor 20%, Range 20% 14,384
Nugaal 27% Horn Horn 60% (AOC 44.7% of Horn) Red Emperor 20%, Range 20% 21,784

Objective Formations in the Dharoor Valley and Nugaal Valley Blocks

The basin fill is thick, with more than 10,000 feet of sediments in some areas. Several potential reservoirs are targets within the two basins. With Yemen as the main play-analogue, Jurassic aged sandstones belonging to the Gabredarre Formation are considered a target. These reservoir sandstones overlie the organic rich Jurassic Kimmeridgian shales and marls of the Uarandab Formation, which is thought to be the source. The Lower Cretaceous sandstones equivalent to Qishn sandstones in Yemen are another primary target. The marine sandstones of the Jesomma Formation, Upper Cretaceous in age, are also potential targets. Jurassic age carbonates of the Hammanlei formation and Triassic sandstones of the Adigrat formation are also deeper targets. Reservoirs associated with basement are also prospective based on Yemeni models.

Geology

Introduction

The Dharoor Valley Block is located in the Darin Basin which, prior to rifting, was along the same trend as the Masila Basin in Yemen when the Gondwana super-contingent began to split-up during the Jurassic time. The Nugaal Valley Block is located in the Nogal Basin which was also along trend of the Marib-Shabwa Basin in the Yemen side during the same time period. Many oil discoveries have been made in the Masila and Marib-Shabwa Basins in Yemen and these two basins are the main contributors to the current daily production rates of over 400,000 barrels of oil. These two blocks cover an area of over 9.7 million acres. With only 3 wells drilled in the two block areas, this is one of the least explored areas in Africa. Wells that were drilled on the identified structures encountered numerous oil shows; however, the wells Nogal-1 and Kalis-1 did not reach the main exploration target. In the early 1990's civil unrest in the country precipitated the pullout of the oil companies operating in the country at the time including Amoco, Chevron, Agip and Conoco.

Exploration History

As mentioned above, there were three wells drilled within these two blocks. The two key wells drilled within the Nugaal Basin are the Nogal 1 and Kalis-1. The drilling reports for these two wells indicated that Lower Cretaceous and Jurassic sandstone targets were not reached but that oil shows were found in some of the shallower sandstones. The Darin 1 well drilled on the rim of the Dharoor Valley, outside the rift valley sequence and also off-structure, though it encountered dead or heavy oil shows in several horizons.

Surface oil seeps, as well as oil shows reported in several exploration wells drilled by previous operators in the area, indicate that the source rocks have generated hydrocarbons and that they have migrated through the system.

Geologic Setting

The breakup of the Gondwana super-continent in the Middle Jurassic (~165 million years) initiated the development of a series of sub-parallel rift grabens which were subsequently filled with restricted marine sequences ideal for the generation and entrapment of hydrocarbons. Late Jurassic source rocks were deposited within the deep graben centres and subsequently overlain by regressive marine clastics in Late Jurassic to Early Cretaceous time. A series of subsequent cyclic marine transgressive sequences capped the source/reservoir pair with regional top seals capable of retention of potential commercial hydrocarbon columns.

Continued syn-rift sedimentation buried these reservoir/source/seal triplets to depths sufficient for maturation of organic-rich intervals and pressuring of deep-graben kitchens associated with the generation/migration of hydrocarbons.

A later phase of tectonic instability associated with the East African Rifts system (onset ~30 million years) reactivated the earlier Gondwana rifts and overprinted the Mesozoic systems with variable amounts of uplift and erosion along their extent.

Impact of this late tectonic event, based on observations from Yemeni analogues, suggests late reactivation of pre-existing traps likely compromised some earlier accumulations and promoted hydrocarbon leakage locally. Trap integrity will therefore be critical to the success of exploration within the Mesozoic (Gondwana) rift trends, especially along fault-bounded prospects.

Paleo-geographic reconstructions of the southern Arabian peninsula and adjacent to the Horn of Africa support the continuity of Gondwana grabens from the prolific Marib-Shabwa and Masila trends of Yemen across the restored Gulf of Aden into the Nugaal and Dharoor rifts, respectively.

Petroleum System

The petroleum systems operative within these proven productive Yemeni analogues, as described above, are projected to extend south-eastward across the Nugaal and Dharoor rifts.

The lack of drilling within the Jurassic rifts on the Somali side of the Horn precludes the accurate correlation of litho-stratigraphic units across the modern day Gulf of Aden. Current stratigraphic compilations from Puntland do not accurately reflect late Jurassic to early Cretaceous syn-rift stratigraphic fill, as was once the case in southern Arabia pre-drilling of the Euphrates (Syria), Azraq (Jordan), Marib and Masila (Yemen) graben trends.

The presence of important restricted marine sequences within these rifts must be extrapolated from Yemen and/or inferred from incomplete stratigraphic penetrations from only two wells located above the rifts.

Familiarity with the stratigraphic successions of Yemeni rift analogues is imperative for reasonable projection of syn-rift fill into the Nugaal and Dharoor trends. Local outcrops and/or old, shallow rift margin wells obscure the nature of syn-rift stratigraphy and limit recognition of the individual elements of a working petroleum system. Regional understanding is paramount for recognition of viable play concepts and remaining prospectivity within the undrilled rifts of the Horn of Africa.

The operator has mapped numerous prospects and leads across both the Nugaal Valley and Dharoor Valley rifts that appear to display some of the key elements recognized within the Yemeni rift analogues. Although the prospectivity is based solely on the loose grids of 2D seismic and potential field data, potential play fairways and large trapping geometries can be mapped.

While the fore-mentioned stratigraphic control on syn-rift successions is absent, other elements of a working petroleum system can be inferred from available data. Numerous hydrocarbon seeps and subsurface shows are reported across the Horn of Africa, supporting the likely presence of mature Jurassic source rocks within these un-drilled grabens.

Extrapolation of syn-rift reservoir parameters from Yemeni analogues allows the estimation of volumetric potential of mapped prospects and leads for the petroleum originally in place resources.