Africa Oil Seeks More Funds For East Africa Operation

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VENTURES AFRICA – Canadian energy firm, Africa Oil Corp., is seeking Sh16.8 billion ($200 milliion) through a private placement to increase exploration activity in Kenya and the eastern Africa region.

“Africa Oil will sell, on a non-brokered, private placement basis, an aggregate of up to 25 million common shares at a price of Canadian $7.75 per share for gross proceeds of up to Canadian $193.75 million,” said the firm in a statement.

According to the statement, the fund will be invested in the firm’s East Africa operations and other capital investments, following placement approval by the relevant regulatory body.

The firm, which discovered oil in Kenya in March, alongside operating partner Tullow, said this week it found more oil in the country, at its Twiga South-1 well.

However, Barclays Capital and Citi analysts have termed the 30-metre net oil pay find disappointing compared with the Ngamia find.

According to Businessdaily Africa, Patrick Nyoike, Kenyan Ministry of Energy Permanent Secretary (PS) has said the find is substantial, adding that it will undergo further testing together with another over 700 metres trapped by an impermeable rock.

“The find is a significant development for our country,” Nyoike said.

Expressing his view on the find, Africa Oil president and CEO Keith Hill said: “We are very pleased with these exciting results to date and have significantly expanded our plans in Kenya and Ethiopia. There is much to look forward to in 2013.”

On Tuesday shares in both Africa Oil and its Irish partner, Tullow, plummeted, following an oil strike in the Twiga South -1 well.

Just a day before, Africa Oil shares fell 20 percent, the lowest in almost three months.

Tullow operates the Twiga South-1 well having a 50 percent holding of the exploration licence with Africa Oil holding 30 percent and London-listed Afren the remaining 20 percent.