Kenya now has more recoverable oil than Uganda and we are still prospecting. Initially it was estimated that we had 650 million barrels. In March 2016 that was increased to 750 million barrels to 1 Billion Barrels. Yesterday after independent evaluation the south lokichar basin by DeGolyer and MacNaughton Canada Limited (“DMCL”) that estimate has been put at 1.6 Billion recoverable barrels. Uganda recoverable oil is 1.5 Billion barrels. I continue to predict the estimates will continue to improve as the latest improved estimate has convinced Africa Oil/Tullow/Maersk to put more funds together and reactivate further exploration activities.
May 10, 2016
[SIZE=4] Africa Oil Announces Significant Increase 2C Oil Resources[/SIZE]VANCOUVER, BRITISH COLUMBIA–(Marketwired - May 10, 2016) -Africa Oil Corp. (“Africa Oil”, “AOC” or the “Company”) (TSX:AOI)(OMX:AOI) is pleased to announce that an independent assessment of the Company’s Contingent Resources in the South Lokichar Basin located in Blocks 10BB and 13T in Kenya has been completed by DeGolyer and MacNaughton Canada Limited (“DMCL”).
The estimated gross 2C unrisked resources in the South Lokichar Basin, Kenya have increased by 150 million barrels (or 24%) to 766 million barrels of oil (Development Pending: 754 million barrels and Development Unclarified: 12 million barrels).
Keith Hill, President and CEO, commented, “DMCL’s independent assessment confirms a significant increase in Contingent Resources for the South Lokichar Basin in Northern Kenya. Based on the continuing drilling and testing program over the past year our best estimate is now that the Company’s discoveries in the South Lokichar Basin contain gross unrisked Contingent Resources of 766 million barrels of oil (2C estimate) (Development Pending: 754 million barrels and Development Unclarified: 12 million barrels), an increase of 24% on previous estimates, and may contain as much as 1.63 billion barrels of gross oil Contingent Resources (3C estimate), an increase of 26%. The level of these resources gives us confidence that we will exceed the threshold required for development and we continue to push forward for development sanction during 2017.”
“may contain as much as 1.63 billion barrels of gross oil Contingent Resources (3C estimate), an increase of 26%” Either way we are good. No wonder Tullow has been pushing for our own pipeline. Let the continue prospecting full-time again.
Uganda is expected to start pumping in 2018, after delays due to court tussles over oil firm contracts and negotiations on building a refinery. The area explored so far – about 40% of the basin – has an estimated 6.5bn barrels of oil reserves ; at least 2bn barrels are expected to be commercially viable.
[SIZE=5]Calculation of Reserves[/SIZE][SIZE=4][/SIZE][SIZE=4][/SIZE]
[I][SIZE=6]"[/SIZE]Reserves and resources are the volumes of oil, gas and other hydrocarbons that are estimated to be commercially recoverable from the bedrock at our licences. For a quantity of hydrocarbons to be classified as reserves the decision must be made that the accumulation will be developed and put into production within a reasonable timeframe. The reserves are divided into two groups, proven and unproven reserves. In turn, the unproven reserves are divided into probable and possible reserves.
Proved reserves (1P)
Proved reserves are those quantities of petroleum which can be estimated with reasonable certainty (more than 90 percent) to be commercially recoverable from known reservoirs and under current economic conditions and operating methods. If deterministic methods are used, the term reasonable certainty is intended to express a high degree of confidence that the quantities will be recovered. If probabilistic methods are used there should be at least 90 percent probaility that the quantities actually recovered will equal or exceed the estimates.
Probable reserves (2P)
Probable reserves are those unproved reserves which are more likely than not to be commercial recoverable under current or future economic conditions. When probabilistic mehtods are used, there should be at least a 50 percent probability that the quantities actually recovered will equal or exceed the sum of estimated proved plus probable reserves.
Possible reserves (3P)
Possible reserves are reserves that are less likely to be available for extraction. When probabilistic mehtods are used, there should be more than 10 percent probability that the quantities actually recovered will equal or exceed the sum of estimated proved plus probable plus probable reserves.
Other quantities are designated as resources. All estimates of resources and reserves involve a certain degree of uncertainty, which is primarily due to the geological data available at the time of appraisal and the interpretation of this data. Resources are therefore divided into various categories depending on the relative uncertainty that exists.
[/I]
[SIZE=4]About Contingent and Prospective Resources[/SIZE]
[I]Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingent resources are divided into three different classes, 1C, 2C and 3C, which in theory will become 1P, 2P and 3P respectively when contingencies are removed.
Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. Prospective Resources are further subdivided in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and may be sub-classified based on project maturity.[SIZE=6]"[/SIZE][/I]
Uganda did 70+ exploration drills while we have done 35 so far in Lokichar. We haven’t even reached a point of giving final reserve estimates. What we have a periodic estimates every quarter. So far at 1.63 billion barrels is good considering their will be more progress going forward. Let await further exploration at Elgeyo Marakwet and Turkana to see whats in store. If we reach 3 billion barrels then our pipeline will sell itself to investors easily as thats what was Uganda/Kenya joint estimate in Feb when we were pushing for the lamu pipeline.
Actually the Chepkutet - 1 well encountered more than 700 meters of net pay oil, the best so far in all the wells drilled in the country. I expect massive find of oil when they are finally done with the exploration and appraisal.
We also expect massive finds around Nyanza area.
BG also encountered some oil when they drilled their sunbird 1 well off the coast of Kenya and encountered some Oil and Natural gas.
I expect that Kenya has more recoverable oil and gas resources than Uganda.