The NEWS (Monrovia)

10 January 2013

Liberia: Big Oil Drilling Starts

Photo: Africa Undisguised
An oil rig.

African Petroleum says it has started drilling for oil offshore Liberia.

The company said two Well Drilling Programme commenced in Block LB-09 in the Bee Eater-1 well offshore Liberia on January 4, 2013.

The Bee Eater-1 well is located 9.5 km north west of the 2012 Narina discovery which discovered high quality oil in Turonian reservoirs.

The Bee Eater - 1 well will test to determine the commercial value of the oil before making further pronouncements.

Although a definite figure has not been revealed, however, there are indications that oil value could be around US$840 million barrels.

The recent update on the prospective resources for Liberia Blocks LB-08 & LB-09 is available on the company website www.africanpetroleum.com.au.

According to a press release under the signature of Karl Thompson, Chief Executive Officer, the second well in this drilling program will be drilled after completion of the Bee Eater-1 well.

A number of potential well locations in Blocks LB-08 & LB-09 are under consideration dependent on the outcome of the Bee Eater-1 well.

Karl Thompson CEO comments "2012 has been a very successful year for the company with the Narina-1 discovery in Liberia and the expansion of the exploration portfolio with the addition of 5 more exploration blocks in Senegal, Sierra Leone and Cote d'Ivoire.

The CEO indicated that extensive 3D seismic surveys have been acquired on the blocks in Senegal and Cote d'Ivoire with very encouraging results and are being evaluated to include in its forward drilling program.

Mr. Thompson: "We are looking forward to a very active exploration program in 2013 starting with the drilling of the high potential Bee Eater prospect in Liberia LB-09 and follow on drilling in Liberia plus Cote d'Ivoire and The Gambia/Senegal coast."

African Petroleum said it is finalizing negotiations with PetroChina for an investment up to 20% equity in Block LB-09 in Liberia and are confident that the parties will reach agreement shortly.

"We are also in farm out discussions with a number of other major international oil companies on selected exploration blocks in Cote d'Ivoire, Liberia, Gambia and Senegal. We anticipate concluding the farm out negotiations in the 1st quarter 2013 which will provide investment funding for additional drilling in 2013 and 2014," the release added.

The Quarterly Activities Report of 31 October 2012 reported the Company had US$169.7 million cash of which US$87.5 million was restricted cash related to drilling and security deposits for achieving certain drilling milestones.

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