The East African Rift Basin system is one of the last great rift Basins to be explored. Africa Oil Corp. has made numerous oil discoveries in the South Lokichar Basin (Blocks 10BB and 13T) located in the Tertiary Rift trend in Kenya.

During the last three years, Africa Oil has focused primarily on exploration and appraisal activities in South Lokichar. The Company and its joint venture partners Tullow Oil plc and Maersk Olie og Gas A/S [Total S.A.] in these blocks are focusing on an initial stage of development in the Ngamia and Amosing oil fields. Front end engineering and design (FEED) is expected to commence in 2018, with final investment decision (FID) targeted for 2019 and first oil in 2021 or 2022. The initial stage of development includes plans for the construction of an oil export pipeline to Lamu, located on the east coast of Kenya, some 750 km from the Lokichar Basin.

In 2016, the Company completed a farmout transaction with Maersk [Total S.A.], who acquired 50% of Africa Oil's interests in Blocks 10BB, 13T and 10BA in Kenya and the Rift Basin Area in Ethiopia in consideration for reimbursement of a portion of the Company's past costs and a future carry on certain exploration and development costs.

At closing, $439.4 million of farmout related proceeds were received from Maersk [Total S.A.]: $350.0 million as reimbursement of past costs incurred by the Company prior to the agreed March 31, 2015 effective date and $89.4 million representing Maersk's [Total S.A.] share of costs incurred between the effective date and closing, including a carry reimbursement of $15.0 million related to exploration expenditures.

Maersk [Total S.A.] will also carry up to $75 million of Africa Oil's share of development expenditures upon confirmation of resources. In May 2017 the Company and Maersk [Total S.A.] agreed to payment terms related to the $75 million advance development carry. Africa Oil will receive equal quarterly payments of $18.75 million at the end of each calendar quarter during 2018. Upon FID of the South Lokichar development project, Maersk [Total S.A.] may be obligated to carry Africa Oil for an additional amount of up to $405 million dependent upon meeting certain thresholds of resource growth and the timing of first oil.

Africa Oil also has an exploration portfolio, which allows the Company to access a larger number of highly prospective blocks, with near term wells, many of which are carried by majors, for a low entry cost and limited capital commitments. Africa Oil holds ownership interests in Impact Oil & Gas Limited (a private UK company with an impressive portfolio of deep water exploration blocks around Africa, most of which have farm in agreements and carries by major oil companies), Eco-Atlantic Oil & Gas Ltd. (a TSXV/AIM listed company with multiple high potential prospective exploration blocks located offshore Namibia and Guyana), and Africa Energy Corp. (a TSXV listed company with a strong inventory of exploration prospects, including high potential Total operated South Africa Block and Tullow operated Namibia Block -- both with wells planned in 2018).

Africa Oil also continues to evaluate potential acquisition and mergers, focusing on Africa.

Detailed project descriptions are available in the Company's Financial Reports, Presentations and Annual Information Form.