Africa Oil Corp. is pleased to announce that it has signed a definitive agreement to acquire all of the issued and outstanding common shares of Centric Energy Corp., a publicly traded oil and gas company listed on the TSX Venture Exchange. Pursuant to the agreement, Africa Oil will acquire, by way of a plan of arrangement, all of the issued and outstanding shares of Centric in consideration for 0.3077 Africa Oil shares (and $0.0001) for each common share of Centric.
Centric's primary asset is Block 10BA in Kenya which is strategically located within the oil rich East African Tertiary Rift System between Africa Oil's Block 10BB and its South Omo Block, where Africa Oil is operating. This trend hosts the recent discoveries in the Albert Graben in Uganda where up to 2 billion barrels of oil have been discovered by Tullow.
About Block 10BA
Block 10BA is highly under-explored, with only sparse seismic data acquired in 1991. It covers 16,205 square kilometers and is directly north of the Loperot oil discovery drilled by Shell Exploration (Kenya) in 1992, within Africa Oil's Block 10BB. The planned acquisition of new seismic data onshore and offshore is expected to considerably improve the understanding of the hydrocarbon potential of this Block.
Centric and Tullow have executed a definitive farm-in and joint operating agreement whereby Tullow will earn a 50% participating interest and operatorship in Block 10BA by funding 80% of the first $30 million of expenditures under the Block 10BA Production Sharing Agreement and reimbursing approximately $750,000 in past costs. The closing of the farm-in is conditional upon satisfactory resolution of a Kenyan court proceeding concerning a judicial review application filed against the Kenyan Ministry of Energy expected on December 16, 2010.
An independent assessment of the prospective resources of Block 10BA has been completed by Gustavson & Associates under a Resources Evaluation Report prepared in accordance with National Instrument 51-101 – Standards for Disclosure for Oil and Gas Activities. This report calculates prospective resources for 25 Centric leads and prospects in the Block. The total of the prospective resources ranges from a low case (P90) of 955 million barrels of oil up to a high case (P10) of 4,379 million barrels of oil, with a best estimate (P50) of 2,188 million barrels of oil.
