2019 Second Quarter Update

Tertiary Rift -- Kenya

Exploration and Appraisal (Blocks 10BB and 13T)

Following the receipt of the Regulatory Authority approval the Early Oil Production System (“EOPS”) became fully operational at the Amosing temporary production facility in June. EOPS production levels have reached 2000 barrels of oil per day (“bopd”) with all the crude oil being trucked from Turkana to Mombasa by road. To date, approximately 230,000 barrels of oil has been transported to Mombasa. The first lifting of sweet Kenyan crude oil stored in Mombasa is expected in the second half of 2019.

Africa Oil Corp. has a 25% working interest in Blocks 10BB and 13T with Tullow Oil plc (50% and Operator) and Total S.A. (25%) holding the remaining interests.

Field Development (Blocks 10BB and 13T)

The Joint Venture Partners and the Government of Kenya have concluded negotiations around key fiscal and commercial principles for Project Oil Kenya with agreements between the parties documented in various Heads of Terms which were signed by the Joint Venture Partners and the Government of Kenya in Nairobi on June 25th. This is a material and encouraging step forward which gives all parties confidence that the development project will be robust at low oil prices. In addition, the completion of the Front End Engineering and Design (“FEED”) studies for both the upstream and midstream, together with recent market soundings provide increased confidence in the project's capital expenditure estimate and construction timetable that is expected to see first oil three years after the Final Investment Decision (“FID”).

Since January 2018, work to deliver on the agreed development plan has continued with strong alignment between the Government of Kenya and the Joint Venture Partners. The initial development is planned to include a 60,000 to 80,000 bopd Central Processing Facility (“CPF”) and an export pipeline, from the South Lokichar basin to Lamu (on the Kenyan coast), some 800 kilometers in length. This approach is expected to bring significant benefits as it enables an earlier FID of the Amosing, Ngamia and Twiga fields, providing the best opportunity to deliver first oil in a timeline that meets the Government of Kenya expectations. The installed infrastructure can then be utilized for the optimization of the remaining and yet to be discovered South Lokichar oil fields, allowing the incremental development of these fields to be completed in an efficient and lower cost manner post first oil. Additional stages of development are expected to increase plateau production to 100,000 bopd or greater. Upstream FEED has been completed by WorleyParsons and Environmental and Social Impact Assessment (“ESIA”) work on the upstream is expected to be complete in the third quarter.

A Joint Development Agreement (“JDA”), setting out a structure for the Government of Kenya and the Kenya Joint Venture Partners to progress the development of the export pipeline, was signed on 25 October, 2017. The associated Midstream FEED, awarded to Wood Group, is now complete and the associated ESIA is expected to be complete in the third quarter, studies on pipeline financing and ownership, are expected to continue throughout 2019.

The Government of Kenya continues to make good progress, both in acquiring the land for the upstream and pipeline and securing water rights for the upstream.

Exploration Block 10BA

During 2017, the Joint Venture Partners entered the Second Additional Exploration Period on Block 10BA. In the second quarter of 2019 the Government of Kenya granted an extension to the 10BA Second Additional Exploration Period. This period will now expire on 26th April 2021.

Tertiary Rift -- Ethiopia

The Company has not been successful in attracting joint venture partners to farmin to its 100% interest in the Rift Basin Area (Ethiopia). The current exploration period expired in August 2019. A $4.9 million impairment of previously capitalized intangible exploration assets was recorded in 2018 related to the Company’s operations in Ethiopia.