As per the agreement, Marathon Oil will acquire a 50% interest in Block 9 in Kenya, while Africa Oil will maintain operatorship of the block, with operatorship right to be exercised by Marathon Oil if a commercial discovery is made at the block.
In Block 12A in Kenya, Africa Oil will hold 20% stake, while Marathon Oil and Tullow will have 15% and 65% interest, respectively.
Under the agreement, Marathon Oil will pay Africa Oil an entry payment of $35m which includes prior expenditures, and will fund up to a maximum of $43.5m for Africa Oil’s working interest share of future joint venture expenditures anticipated to be spent over the next three years.
Africa Oil president and CEO Keith Hill said, "The consideration to be received from Marathon Oil will allow us to both accelerate the exploration in the blocks that Marathon Oil is farming into as well as provide additional funding to the company for the accelerated exploration program on the Tertiary rift trend being executed in partnership with Tullow Oil."
Africa Oil and Marathon Oil have also agreed to jointly pursue exploration activities on an additional exploration area in Ethiopia.
Africa Oil has also completed an additional farmout transaction with Tullow, under Tullow paid Africa Oil $759,000 in consideration of past costs to acquire an additional 15% interest in Block 12A in Kenya.
Tullow will also fund Africa Oil’s costs related to the acquisition of 520km of 2D seismic until an expenditure cap of $3.1m.
