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Africa Oil Corporation sees new exploration success onshore Kenya

‘Good oil shows’ were encountered across more than 700 metres of Cheptuket-1.

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The well proves an active petroleum system in a previously untested area.

Africa Oil Corp (TSE:AOI) has seen further exploration success in Kenya where the Cheptuket-1 ‘wildcat’ exploration well has proved an active petroleum system.

The oil firm has a 20% stake in the Tullow Oil (LON:TLW) operated Block 12A, where Cheptuket-1 is the first well to test the Kerio Valley Basin.

‘Good oil shows’ were encountered across more than 700 metres of Cheptuket-1, which was drilled to a depth of 3,083 metres.

Based on initial analysis Tullow said the strong shows indicates significant oil generation.

"This is the most significant well result to date in Kenya outside the South Lokichar basin. Encountering strong oil shows across such a large interval is very encouraging indeed,” said Angus McCoss, Tullow exploration director.

“I am delighted by this wildcat well result and the team are already working on our follow-up exploration plans for the Kerio Valley Basin."

Tullow has a 40% stake in the exploration project alongside partners Delonex Energy (also with 40%) and Africa Oil Corp (with 20%).

Caren Crowley, analyst at Dublin based broker Davy, said: “We view the well result as a good first step in establishing a new petroleum basin in Kenya.”

Africa Oil, in February, completed a deal to unlock value from its Kenyan portfolio.

It received $427mln in cash from Maersk Oil as a result of a farm-out deal, which saw the conglomerate take a 25% stake in three other projects where Africa Oil is partnered with Tullow (Blocks 10BB, 13T, and 10BA).

Maersk also committed to carrying AOI for certain development costs, which could amount to more than $480mln.

Cheptuket-1 is due south of the blocks farmed into by Maersk.

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