Africa Oil has signed a definitive agreement with the Government of Ethiopia to jointly study the Rift Valley Block. The Block is located north of the company's South Omo Block and encompasses the remainder of the Tertiary age East Africa Rift Trend in Ethiopia. Africa Oil has committed to carry out an airborne geophysical survey over the Block, which spans 42,519 square kilometres. Africa Oil will also work closely with seconded members of the Ethiopian Ministry of Mines to support local capacity building. The Joint Study Agreement has an 18 month term, following which Africa Oil will have the exclusive right to enter into negotiations for a production sharing agreement for all or part of the Rift Valley Block. The Company plans to carry out the airborne geophysical survey, together with reconnaissance field geology, in 2011.
Africa Oil has also closed the Ethiopian portion of the previously announced five block farmout transaction with Tullow Oil plc. As a result of the completion of the South Omo Block portion of the transaction, Tullow now has a 50% operated position in the block, with Africa Oil holding a 30% interest and Agriterra Limited holding the remaining 20%.
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