Africa Oil Corp. Signs Farmout With Marathon Oil Corporation

Africa Oil Corp. announced that it has signed a definitive farmout agreement with Marathon Oil Corporation whereby Marathon Oil will acquire the rights to obtain an interest in two of Africa Oil's Kenyan exploration blocks. Under the terms of the farmout agreement, Marathon Oil will acquire a 50% interest in Block 9 and a 15% interest in Block 12A, both in Kenya. Africa Oil will maintain operatorship in Block 9, but Marathon Oil has the right to assume operatorship if a commercial discovery is made. In addition, Africa Oil and Marathon Oil have agreed to jointly pursue exploration activities on an additional exploration area in Ethiopia. In consideration for the assignment of these interests, Marathon Oil will pay Africa Oil an entry payment of $35 million which includes prior expenditures, and has agreed to fund Africa Oil's working interest share of future joint venture expenditures anticipated to be spent over the next three years up to a maximum of $43.5 million.