January 21, 2008 All values in C$ unless otherwise noted. Current Price $5.26
Shares o/s (FD, MM) 18.3 Market Cap (FD, $mm) $96.3 Working Capital ($mm) $18 Enterprise Value (FD, $mm) $78.3 Average Daily Volume (shares) 9,894 Relative Risk Level: Moderate
Company Profile Africa Oil Corp. is part of The Lundin Group of Companies & is exploring for oil in the state of Puntland in northern Somalia. An independent resource report suggests 3.5 Bbbls OOIP in one of AOI’s 2 blocks.
Catalyst Events and Timing Event Timeline Drilling in Nogal Block Mid-2008 target Seismic in Dharoor (north) Q1 2008 Drilling in Dharoor Q3 2008?
A Few Billion Reasons You Want to be Able to Find “Puntland” on a Map
• AOI is earning an 80% interest in 2 blocks in Puntland, Somalia Puntland is an independent state in northern Somalia located on the Horn of Africa. A production sharing agreement was signed in 2007 with the government of Puntland, but we believe political risk remains a factor.
• Independent resource estimate says 3.5 Bbbls OOIP in Nogal block The geology of Puntland is analogous to that of Yemen. Wells drilled prior to the destabilization of Somalia in the early 90’s proved a working hydrocarbon system. Northern (Dharoor) block is also highly prospective.
• Strong management team expects drilling to start mid-2008 Southern prospects are drill-ready. Plans call for 2 wells per block, with each well targeting >100 mmbbls of recoverable potential. Management has extensive transferable knowledge from E&P experience in Yemen.
• Swinging for the fences – Billion-dollar potential if it all works out We peg the blue-sky resource potential at 500 mmbbls which puts $1B market cap in play. Low float = huge leverage to any material discoveries.
RRS Price at posting:
0.0¢ Sentiment: None Disclosure: Held
