Africa Oil has entered an agreement to increase its operated working interest ("WI") in Block 3B/4B, located in the Orange Basin offshore South Africa and on trend with the Venus, Graff, La Rona and Jonker oil discoveries, for an additional 6.25% interest. 

An independent review of the prospective resources and probability of geological success of an inventory of exploration prospects within Block 3B/4B, has reported total unrisked gross P50 prospective resources of approximately 4 billion barrels of oil equivalent. Probability of success ranges from 11% to 39% over the 24 prospects identified.

The Company has signed a legally binding Letter of Intent ("LOI") with Azinam, a wholly owned subsidiary of Eco (Atlantic) Oil & Gas, to acquire the 6.25% interest for a total cash consideration of USD 10.5 million, to be paid in tranches on the following milestones:

• USD 2.5 million within 30 days after the signing of the LOI;
• USD 2.5 million upon the government's approval for the transfer of the 6.25% to Africa Oil;
• USD 4.0 million upon the completion of a farm-out deal to a third party; and
• USD 1.5 million upon spudding of the first exploration well on the block.

Africa Oil is a major shareholder in Eco with a 15.02% shareholding. The Company's Directors other than Mr. Keith Hill, who is also a Director of Eco have reviewed and approved the terms of the LOI.

The Company will hold an operated WI of 26.25% subject to and, on the receipt of the government's approval for the transfer, with Azinam holding a 20.00% WI and Ricocure (Proprietary) Limited holding the remaining 53.75% interest.

The Company and its Block 3B/4B partners are progressing plans to conduct a two-well campaign on the block and are in discussions with various potential partners to farm out up to a 55% gross working interest in the Block. The Company and its partners have also selected a leading South African environmental consulting firm to conduct a comprehensive Environmental and Social Impact Assessment process in preparation for permitting and drilling activity on the block.

Block 3B/4B

Block 3B/4B covers an area of 17,581 km² within the Orange Basin offshore of the Republic of South Africa. This block lies to the southeast and on trend with number of oil discoveries including Venus and Graff. An independent review of the block's prospective resources has been completed by RISC Advisory. The effective date of RISC's report is March 7, 2023, and can be found on the Company's website. 

RISC has reviewed the prospective resources and probability of geological success of 24 exploration prospects within Block 3B/4B in accordance with the PRMS. The report provides an evaluation of prospective resources from a prospect inventory identified using 3D seismic data and follows completion of the reprocessing of 2,200 km² of 3D seismic data and play-opening discoveries in Namibia including TotalEnergies' Venus discovery and Shell's Graff, La Rona, and Jonker light oil discoveries. These discoveries prove the existence of a working petroleum system for light oil, gas condensate and gas in the geological play fairway. The proven reservoirs in Graff and Venus discoveries are similar to Cretaceous reservoirs and geological plays that would be targeted in Block 3B/4B. Prospects in Block 3B/4B are identified using 3D seismic data to assess the presence of seismic attributes including amplitude-variation-with-offset ("AVO") or direct hydrocarbon indicators ("DHI's").

KeyFacts Energy: Africa Energy South Africa country profile